/ world today news/ The Russian president made a demonstration with the Turkish card in Borisov’s first mandate as well.
The amount of €400 million in fees mentioned for the first time could be used in further negotiations
What will the statement of Russian President Vladimir Putin in Ankara about the suspension of the South Stream gas pipeline project lead to for Bulgaria? Is it final or just aims to catalyze political decisions on the future of the gas pipeline in Brussels, Sofia and other capitals? What would Bulgaria lose from stopping the project? Is it even possible for the statement of the president of a country to annul several already concluded international treaties? Do we have a way out of the situation and what is it? For an answer to these and other important questions for the Bulgarian economy, we turned to energy expert Prof. Atanas Tasev.
– Prof. Tasev, what will be the consequence for Bulgaria of Russian President Vladimir Putin’s statement in Ankara about the suspension of the South Stream gas pipeline project?
– Russian President Vladimir Putin’s statement on the suspension of the South Stream project should be brought to the attention of serious game theory and operations research think tanks. Moreover, his policy is a model of absolute consistency and intransigence. It was no coincidence, for example, that at the beginning of Prime Minister Boyko Borissov’s first term, President Putin also made a similar demonstration. Without meeting Borissov then, he went to Ankara, where he played the Turkish card – he announced the Samsun – Ceyhan oil pipeline with a greater capacity compared to the Burgas – Alexandroupolis project, supported the construction of the Akkuyu NPP with Russian reactors and formulated the thesis for “South Stream 2” with a capacity of 63 billion cubic meters of gas as opposed to the “South Stream 1” project, which was supposed to have a capacity of 31 billion cubic meters of gas per year. In practice, then, with his visit to Ankara, Vladimir Putin issued an indirect challenge to Bulgaria, because the 63 billion cubic meters of capacity of the South Stream gas pipeline is already something very serious. Then Prime Minister Boyko Borissov accepted this challenge and Bulgaria became an essential part of this extended South Stream 2 project.
– What does Bulgaria lose from stopping the project?
– The “South Stream” project is extremely important for us. First of all, he guaranteed us uninterrupted gas supplies. Secondly, it would make us a gas hub in the Balkans and one of the most important in all of Europe. Because the idea of the project was that of these 63 billion cubic meters per year, 22 billion would be diverted near Provadia for the transit to the three Balkan countries (19 billion – to Turkey, Greece and Macedonia and about 3 billion – for our consumption), and the remaining 41 billion cubic meters – – to go to Central Europe.
Now, Russian President Putin has once again played the Turkish card, with which he made a very serious suggestion to Prime Minister Borissov, while at the same time providing him with a serious opportunity to play the situation well.
– In what sense?
– In the sense that the situation is not rosy at all for Bulgaria, but we still have a way out of it. And the situation is as follows. With the suspension of the South Stream project, Bulgaria will really lose a lot. Nobody seems to have paid attention to the fact that by stopping the project and redirecting it to Turkey, in practice, Russia will cut off the transit that now flows through the territory of Bulgaria to Turkey, Greece and Macedonia. And this is 18 billion cubic meters of gas, from which we earn about 150 million dollars annually, and that is from our transit system, the operating costs of which are small and therefore the profit margin is serious.
In addition, Putin mentioned something that has not been said before – Bulgaria’s income of 400 million euros a year from South Stream when using the maximum capacity of the pipe of 63 billion cubic meters. If we solve the reverse task – this means 1.8 – 1.9 euros for 1000 cubic meters per 100 km of transit, as until now everyone said that there is no such transit fee. In reality, there could not be such a transit fee, since the price of the resource attracted for the construction of the gas pipeline is not yet clear. But Russian President Vladimir Putin indicated 400 million euros in transit fees for Bulgaria, which would be a good condition to play in a subsequent version of the negotiations on the project.
– Does this mean that Vladimir Putin’s statement does not put an absolute end to the project?
– In no case should we lose hope. In addition, with his statement, President Putin practically gives another trump card to Prime Minister Boyko Borisov – in the event of a possible international arbitration for “South Stream, the Russian volition in it would be compromised, since in this case it is not us who freezes, but Russia itself stops the project.
So we should rather perceive the statement of the Russian president in Ankara as a pure test of nerves. Because President Vladimir Putin himself would hardly be able to answer a number of important questions. For example, first – what will Gazprom do with these 63 billion cubic meters of gas from “South Stream” if it takes them to Turkey and decides to build a gas hub on its territory. Second, all transit gas pipelines need large gas storage facilities. It is no coincidence that “Banatski Dvor” in Serbia and a significant part of the capacity of “Baumgarten” in Austria have long been reserved specifically for “South Stream”. And Turkey has no built large gas storage facilities. Third – let’s do the actual calculations. If Russia cuts the 19 billion transit to Turkey, Turkey and Macedonia, which will go through the new “South Stream 3” (or “Blue Stream 2”), where will the remaining amounts of gas go? They should be used to supply the countries of the region – Israel, Egypt, etc. And there will be one capacity that can eventually be used in the trans-Adriatic gas pipeline. So the new Russian scheme is coming out, but in a distant perspective.
– But can a statement, even by the president of a great country, put an end to several concluded international agreements just like that?
– Yes, which is precisely why I repeat again that Vladimir Putin’s statement is a game of nerves. It is even proven by the fact that Moscow has confirmed its participation in the meeting in Brussels on the “South Stream” project. If he really stops the project – what will he go to Brussels to negotiate about?
It should be clear to everyone that Russia is not alone in the South Stream project – you know that a number of international agreements have been signed on it. This is a heavy inertial project, with multifaceted interests, in a very advanced phase.
Perhaps the most important thing in this case is that with his statement in the Turkish capital, President Putin practically catalyzed the processes in the European Commission, which are currently in the process of restarting EU-Russia relations.
And this means that it is time for us as a country to raise our voice in the general chorus in defense of the South Stream project, because if we don’t do it, we will remain the main victims of all the participants in it.
And besides – after experts from the European Commission came to check us on the project – did someone somewhere read some protocol or other document in which it was written that we somehow violate the requirements of the Third Liberalization Package? No, right! And not only that there are no violations, there cannot be any due to the fact that everyone can build whatever they want after having a building permit. The problem would eventually arise when the gas pipeline starts operating, and by then everything could change.
But it’s about time we raised our voices – enough of whining like a college girl.
Recorded by Belcho Tsanev
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