Can South Stream be revived?

Can South Stream be revived?

Photo: БГНЕС
Photo: БГНЕС
Photo: БГНЕС
Photo: БГНЕС

Recently, Gazprom’s top management stated that “Gazprom can unfreeze South Stream promptly” (tass.ru), following earlier Putin comments that “South Stream is not definitely canceled” (reuters.com) – contrasting earlier statements that the project is “closed forever”. Despite the latest thaw in relations between Russia and Turkey, South Stream apparently still is a preferable option for Gazprom as compared to Turkish Stream, which also appears to be buried, at least for a while. By building a pipeline directly reaching EU territory, Moscow will escape a problematic intermediary which Turkey has always been (a factor that had essentially brought down negotiations on Turkish Stream even before the conflict between Moscow and Ankara of the last fall).

New statements on South Stream were accompanied by repeated assurances by some of the West Balkan states that they are still committed to South Stream – Slovenia (sputniknews.com), Serbia (inserbia.info). Bulgarian former President Georgi Parvanov has spoken in favor of reviving South Stream, while attending the recent congress of “United Russia”, Putin’s ruling party (novinite.com).

 

Where does this new optimism about South Stream come from?

First, it appears very clear that Russians wanted South Stream back on the agenda at least a year ago, when negotiations on Turkish Stream got stuck. I wrote about the fundamental problems in relations between Russia and Turkey a year ago in my detailed publication for IFRI (ifri.org), indicating that Turkey is a problematic partner for Gazprom because it always wants to achieve maximum advantage from its transit intermediary position. Because of this, Turkish Stream negotiations eventually collapsed because Turkey demanded extra discounts for the gas supplied. Should these talks restart, it’s quite clear that Gazprom would confront similar problems again. You can safely bet that the recent revival of the South Stream project is a clear indication that a direct pipeline to the EU via Black Sea is a preferable option for Gazprom than dealing with such a difficult transit country like Turkey.

Is the revival possible? Well, the problem of Gazprom’s subsea gas pipelines aiming to bypass Ukraine is that they do not just end up at sea – they end up on surface territory of EU member states. And therefore are subject to comply with EU rules – which Gazprom is categorically opposed to following. This was the problem with the two major subsea gas pipelines to Europe that Gazprom had already attempted to build. South Stream was frozen because the previous Bulgarian Government had violated EU rules, while giving the project construction a go-ahead. But problems persist even with Nord Stream which is already build: about a third of the pipeline capacity is essentially frozen over the years, because Gazprom does not want to comply with EU third party access rules for Nord Stream’s surface extension, Opal gas pipeline, demanding 100% exemption from EU rules for this pipeline (reuters.com).

The Kremlin, as always, is trying to achieve its goals and overcome European regulations through political means. Rising euroscepticism and troubles within the EU – Brexit and its consequences, rising euroscepticism in Austria, as demonstrated in the recent Presidential elections (and Austria is a key player in both Nord Stream and South Stream cases), rising AfD fortunes in Germany undermining the political powers of Angela Merkel. All of these developments generally weaken the European Commission and its resolve to defend the implementation of EU rules across the continent. A politically weaker EU may eventually lead to wider exemptions from these rules across the continent in an attempt to prevent more euroscepticism from EU member states. Make no mistake: Kremlin also watches closely the dynamics of Bulgarian politics and the falling approval of the current Bulgarian Government, and patiently awaits a potential Government change (sofiaglobe.com), as it does regarding other European countries – France and Germany in the first place (both countries face general elections in 2017, with clear challenges to current leaders Hollande and Merkel).

So, from the Kremlin standpoint, it’s high time to revive South Stream just to keep it warm until a propitious moment arrives.

For Bulgaria, the choice is clear: either to develop gas supply diversity and proceed with projects like Eastring and developing the Black Sea offshore production potential (like its neighbor Romania, which has already secured its independence from Gazprom’s supplies naturalgaseurope.com), or to become Gazprom’s new preferred transit banana republic. Just one look at the map of natural gas prices across Europe offers a clear idea: the more diversity and competition, the cheaper the gas is for consumers across the continent. Keep that in mind!

 

By Vladimir Milov

Leave a comment

More
Could it be time for another Russian revolution?

Could it be time for another Russian revolution?

The article first published in washingtonexaminer.com on 04/16/2020.   The Russian government has inadvertently concocted a recipe for domestic revolution. Having…
The Putin-Erdogan status and Bulgaria today

The Putin-Erdogan status and Bulgaria today

The current state of affairs between Putin’s Russia, Erdogan’s Turkey and Assad’s government in Syria confronting each other in the…
Disinformation and Political Persecution

Disinformation and Political Persecution

  Old Cold War weapons are revived with new dangerous applications against rebellious writers, journalists, scientists and authors   Ghosts…