Russia will resume its work on the South Stream project in the next few weeks, Bulgarian Prime Minister Boyko Borisov was reported as saying by a source in Moscow.
“There are two main reasons due to which Moscow will restart the project frozen in the summer of 2014 by the government led by Oresharski. One of them is the sharp deterioration of Russian-Turkish relations. The second reason is the slowing of growth in the Chinese economy, as a result of which the capacity of the Power of Siberia gas pipeline, which is to deliver natural gas to China, is uncertain. The revival of the South Stream project will meet Brussels’ requirements and will conform to the idea of building a Balkan gas distribution centre with EU support, which cannot be realized without Russian gas," TASS cited the Austrian Standard newspaper as saying.
It is expected that the issue of the South Stream project could be included on the agenda of the meeting of the Intergovernmental Commission on Trade-Economic and Scientific-Technical Cooperation, which will be held in Sofia at the end of January for the first time in five years.
The director of the Center for Studies of World Energy Markets at the RAS Institute of Energy Research, Vyacheslav Kulagin, in an interview with Vestnik Kavkaza drew attention to the need for new negotiations on the resuscitation of the South Stream project with Bulgaria and other EU countries. "We remember that the project is passing through the territory of many countries, so it requires their approvals. If we resume the project, it will require all stages of the approvals, which have been frozen earlier," he said.
"The South Stream project is, of course, more attractive for Europe, because it directly comes from us to the EU without any intermediaries. However, everybody remembers the end of the story, when, despite all the advantages, Bulgaria blocked the project. It's still a very big question whether it will be ready to resume it now, though, after the suspension of the project by the Russian side, Sofia has repeatedly stated that it is ready to negotiate," Vyacheslav Kulagin noted.
"Nothing is preventing the technical resuscitation of the project. Of course, there is a need to rebuild the staff of experts and re-engage vessels for laying the pipeline. If there is a political decision at the level of the Russian leadership, the management of the EU countries and the European Commission, no problems with the construction of the South Stream project are expected," the expert concluded.
Sberbank CIB analyst Valery Nesterov explained that the new positive assessment of the South Stream project is due to an increase in the need for a reliable supply of gas to the EU. "Of course, it is premature to talk about the chances of recovery of the South Stream project, however, on the one hand, there are serious problems with the Turkish Stream, as well as with a presentation of the project in China, due to the low gas prices in Asia and a decrease in its potential demand in China. On the other hand, the Nord Stream-2 project does not cover the needs of southern Europe. The years go by, and the situation remains complex in the Middle East and North Africa. However, European demand for gas is growing," Valery Nesterov expects.
The expert predicts that the Turkish Stream project will be saved as well. "Russia will always be able to build a pipeline, for example, to meet the growing needs of Turkey, if the appropriate arrangements are made. It also involves a willingness of Gazprom to agree with the requirements of the Third Energy Packet and reduced concerns about the growth of European dependence on Russian gas," the analyst said.
"In fact, it will be more difficult to reanimate the project now than it would have been a year or two years ago, when everything was ready for the construction, but in this case, I think that under favorable circumstances it is not a very big problem," Valery Nesterov believes.
