Financing South Stream in Bulgaria

Gazprom may have to undertake financing the construction of the Bulgarian section of the South Stream gas pipeline.

Russian media reports indicate that Bulgaria is not in the financial position to commit to development of the pipeline across its territory.

Gazprom would undertake the cost of construction of the Bulgarian section, recovering expenditure from fees Bulgaria would have received for gas transit.

Last week Bulgaria's Minister of Energy, Economy and Tourism, Delyan Dobrev said that an 11% discount on prices of Russian natural gas had come into effect in April, despite the fact that the final agreement setting out the gas price reduction had not been signed. 

Minister Dobrev said that the delay was due to new demands from Russia relating to the South Stream financial model.