Europe’s Unity on Russia Frays as Bulgaria Defends Gas Pipeline

The European Union’s united stance on the Russian annexation of Crimea is slipping as Bulgaria, its poorest member, accuses the bloc of using a plan by the country to develop a gas pipeline as a pawn in the conflict in Ukraine.

Bulgaria, relying almost entirely on Russian gas, resisted the European Commission’s call to halt work on the South Stream pipeline. The project by Russian state-owned OAO Gazprom will ship gas to western Europe via the Balkans, avoiding Ukraine.

“This is a priority infrastructure project and I hope the European Commission will find more solidarity in its future relations,” Bulgarian Economy and Energy Minister Dragomir Stoynev said in a state radio interview this week. “The point is to avoid South Stream being used as a hostage of future relations and of the conflict between Ukraine and Russia.”

The Commission sent Bulgarian authorities a warning letter June 2, asking them to suspend work on South Stream because of concerns the country may have broken EU public procurement laws by favoring local and Russian bidders. Bulgaria says the EU is seeking to retaliate against Russia over conflict with Ukraine.

Designed to deliver 63 billion cubic meters of natural gas a year, South Stream would run as deep as 2,250 meters (7,380 feet) below the Black Sea surface, across Bulgaria, Serbia, Hungary and Slovenia before entering Italy, its website shows.

The project is financed by Gazprom and partners including Eni SpA, Electricite de France SA and Wintershall AG. The EU is also investigating whether it breaches a so-called unbundling law that prevents gas providers having control over pipelines.

Transparent Procedure

The Commission suspects Bulgaria handled South Stream tenders “without the transparent procedure that is expected in such cases,” Antoine Colombani, a spokesman for the EC, said on June 3. The Bulgarian authorities have one month to provide information related to the award of public contracts.

Political figures in the country have been unmoved. Dimitar Dabov, vice-chairman of Bulgaria’s ruling Socialist Party, said yesterday the pipeline will go ahead.

Such an outcome would be a “disaster” for the country of 7 million that is bound by EU regulations, Slavtcho Neykov, a Sofia-based energy-policy analyst and a former Energy Ministry official in charge of EU integration, said in a phone interview.

“Russia is Bulgaria’s main partner for energy, and the South Stream is a good option for us,” he said. “But first and foremost we’re an EU member, and we shouldn’t forget that.”

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