Financial Times: Energy battle

Boyko Borisov, Bulgaria’s prime minister, unrolls a map across a conference table in his office and with his finger traces the dotted lines that snake across his country. At Europe’s south-east corner, Bulgaria finds itself at the centre of a multibillion-dollar battle to bring natural gas to the European Union.

Last month, Bulgaria became the last in a chain of Balkan countries to agree to the building of a $16bn (€12.3bn) Russian-backed pipeline across its territory. Known as South Stream, the project is led by Russia’s Gazprom along with Eni of Italy, Wintershall of Germany and France’s EDF. Construction work on the first leg of the project – 900km from Russia to Bulgaria, under the Black Sea at a depth of up to 2km – is due to begin this month.

According to Borisov, one of South Stream’s big pluses is that it connects directly to Bulgaria’s shore. The bulk of Russia’s gas exports to the rest of Europe have long been shipped through a Soviet-era pipeline across Ukraine. However, those two countries have not always seen eye to eye. Winter price disputes in 2006 and 2009 led to Gazprom briefly cutting off gas to Ukraine – leaving customers further down the line shivering because of supply disruptions.  MORE