Pipeline Politics: Bulgarian Officials Tout Both Nabucco and South Stream Pipelines
The Caspian Basin energy export contest is often portrayed as one in which there can be only one winner either Russia on the one hand, or the United States and European Union on the other. Officials in Bulgaria, a country that is envisioned as a key transit hub in competing energy-export plans, say that burgeoning European demand for gas means that all sides can profit.
"There is not enough gas," Bulgaria's Energy Minister Petar Dimitrov told EurasiaNet, commenting on Europe's current supplies. "When there is not enough gas, we [must] look for [additional] sources."
Bulgaria stands to gain both economically and politically from the current scramble to establish new energy export routes. Two pipeline projects one called Nabucco, which has strong US and EU support, and another Russian-backed pipeline, dubbed South Stream would pass through Bulgaria. Despite expert doubts about whether there are sufficient resources to justify the construction of two pipelines, Bulgaria is touting both options.
"It is our policy to encourage as many such [pipeline] projects as possible to pass through our territory because this increases our national security," Bulgarian Prime Minister Sergei Stanishev told EurasiaNet in an interview.
Stanishev is currently leading a Bulgarian trade mission to the United States, and he is scheduled to meet US President George W. Bush in Washington on June 18. Energy is among the issues on the agenda. More broadly, Bulgaria is interested in expanding trade relations with Washington. Sofia is also seeking to secure visa-free travel rights for its citizen seeking to visit the United States.
Bulgaria is uniquely situated as it pursues both Nabucco and South Stream. Though part of the European Union, Bulgaria has strong cultural connections to Russia. "When it comes to relations with Russia, few are the nations that share positive feelings, and even fewer are those that share feelings of love," said Dimitrov, the energy minister. "We are one of the few countries that have a good relationship with Russia, and I don't think that this is a disadvantage."
While expert estimates warn that there might not be sufficient supplies of gas in the near future to fill both Nabucco and South Stream, Dimitrov points to longer term studies that show the two pipelines would be able to meet just one-fifth of Europe's overall demand by 2030. "The needs of the European Union are huge," he said.
Dimitrov added that EU member states so far have been supportive of Bulgaria's participation in South Stream, even though it is a rival to Brussels' preferred route Nabucco. Indeed, South Stream seems to run counter to stated EU policy, which seeks to reduce its current dependence on Russian gas supplies. "The EU reaction has been definitely a positive one," the energy minister said. "It was explicitly emphasized that Nabucco is a priority project, but South Stream is necessary."
Both South Stream and Nabucco remain in the planning stages, and neither is slated to begin pumping gas before 2012. In terms of becoming a reality, South Stream seems to be in a stronger position. For one, Russia the world's largest natural gas producer, as well as a major importer of Central Asian energy can guarantee that South Stream will be filled to capacity. In addition, Russia's energy giant Gazprom already has 50/50 pipeline ownership deals in place with the governments of Hungary and Bulgaria. Serbia is also firmly on board the South Stream project.
Nabucco, meanwhile, remains mired in uncertainty. The chief concern is that there will not be enough natural gas supplies to make the route economically viable. [For background see the Eurasia Insight]. As it stands now, Nabucco would heavily depend on Azerbaijani gas supplies. [For background see the Eurasia Insight archive]. Nabucco's backers would like to secure the participation of Central Asian suppliers namely Turkmenistan before making a final commitment to the project, which has an estimated price tag of about $8 billion.
Russia's lead in the pipeline race might be greater, except Moscow appeared to overestimate its bargaining strength. At first, both Hungary and Bulgaria balked at joining South Stream because Moscow's initial offer was heavily weighted to the Kremlin's advantage. "Gazprom wanted majority ownership of the pipeline but we could not agree to such an option, and now we agreed to a 50/50 ownership of South Stream," Dimitrov said.
While South Stream seems close to the point where construction can begin, Stanishev hinted that a change in circumstances could still derail the project. "The South Stream is a question of bilateral relations and economic reasoning like every other project," the prime minister said.
Meanwhile, Prime Minister Stanishev indicated that Nabucco's future remained up in the air. "We are still researching the [supply] possibilities in the Caspian region," he said.
Svetla Marinova is a EurasiaNet editorial associate in New York.
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