Bulgaria's Gas Sector Gridlocked

Bulgaria is currently experiencing the aftermath of yet another general election that resulted in no clear majority. Moreover, looming energy security issues in terms of natural gas supply affected by the Ukraine crisis and the ongoing South Stream project are putting further strains on Bulgarian policy makers who are struggling to place a straight forward plan for all the above.

At a recent energy forum in Sofia, the 5th Regional Energy Conference, which was attended by 120 international energy experts from 11 countries, Bulgaria's caretaker Deputy Prime Minister in charge of Economic Policy and Minister of Regional Development and Minister of Investment Planning, Ekaterina Zaharieva, pointed out that all EU countries should stand united to establish an EU energy union otherwise they would not be able to overcome the serious issues involved.

Further to this she added that that the foremost priorities for energy security should be proper management of the state corporations and the liberalization of markets and energy efficiency models. Regarding the bilateral relations between Sofia and Moscow vis-a-vis natural gas supplies, Zacharieva noted that "The situation is monitored on a daily basis in order to avoid a new major gas crisis. Already an emergency staff has been put in place by the Bulgarian government for that reason.... The European Commission has enacted stress tests for all countries and regarding Bulgaria one of the actions involved is to continue operations in the thermo-electric plant of Varna, as well as, to gather in pace for the establishment of gas interconnections with neighboring countries."

For the moment the only interconnector pipeline that is almost completed is the one with Romania, whilst Interconnector Greece-Bulgaria (IGB) is due by mid-2016.

The British Ambassador to Sofia, Jonathan Allen, stated that the South Stream project is not of any economic value for the energy security of the EU and is merely a political design that strives to circumvent Ukraine for the benefit of Russian foreign policy. According to his point of view, emphasis should be placed on energy interconnections in terms of gas supplies. In particular, for Bulgaria, Allen pointed out that "For the moment Bulgaria is not able to be supplied from neighboring countries, but IGB will be built soon. Also the other plans with Romania and Serbia are going forward and pan-European support is needed in that aspect."

In the meantime, South Stream construction is a priority for Bulgaria and Austria, as noted by the Bulgarian President Rosen Plevneliev and his Austrian counterpart Heinz Fischer stated after recent talks. “We actively support the South Stream project as an opportunity to diversify gas supply routes to Southeast and Central Europe,” Plevneliev said, adding a correct dialogue with the newly-appointed European Commission could persuade it to give a green light to resuming its construction.

A high-level diplomat from an EU country, serving in Sofia, relayed to Natural Gas Europe that "Presently there is intense antagonism between three major power structures, USA-Germany and Russia for the fate of the South Stream. That causes great strains in diplomatic level for Sofia which is also struggling with myriads domestic problems in its economy and social life. A compromise should be sought and Bulgaria should also lay down its own plan, otherwise the whole affair will deteriorate further its economic prospects and may well lead into new premature general elections."

For the moment from all countries formally participating in the South Stream project, the only one that has been in an ambiguity mode with conflicting governmental initiatives on that matter is Bulgaria, which quite interestingly is the starting point of this pipeline. The only viable alternative for this project to move on in case Bulgaria remains indifferent or negative is Turkey as a landing point for the Black Sea offshore pipeline section, or Romania, although the latter is on rather bad terms with Moscow as of late and should be considered as the least popular entry point in all accounts.