Which way is up? Gazprom changes course on South Stream

Looks like it’s time for the planners of the South Stream natural gas pipeline to pull out their maps. Gazprom’s leadership no longer seems to be able to stick to its plans for its massive natural gas pipeline project, which some observers think is a stalling tactic.

According to analysis on Eurasia Daily Monitor, the world’s biggest gas producer continues to fiddle about with the various details involved in constructing South Stream, this time precipitated by Bulgaria deciding that it will not host it on its territory, despite the enthusiasm of the previous government in Sofia.

But it may not only be the route of the pipeline traversing the southern corridor of Europe that is changing, but according to the report, other technical features as well as how the project is financed. Gazprom, for example, is reportedly counting on receiving favorable European credits and is seeking “Trans-European Network” status from the EU for South Stream. The project has had some success in getting other international players on board.

And within just 10 days the Russian-controlled gas concern was changing its plan. At a special meeting on 9 June, Gazprom’s chief Alexei Miller spoke of two seabed strings of South Stream, each of 31 bcm capacity, with the second only built if demand in Europe mandated it; but on 19 June, at the St. Petersburg Economic Forum, Gazprom’s leadership says the seabed section would have four parallel strings. Construction on the sea floor of the Black Sea would start in 2013 and gas flow would allegedly begin at the end of 2015.

While Gazprom officials are miffed with Bulgaria over changing its mind on participation in South Stream, they praised Romania’s willingness to get involved. But will the project be able to afford the higher costs involved? The costs of South Stream are already outrageously expensive.

Ukraine’s Foreign Minister, Kostyantyn Hrishchenko agrees, even flying to Italy to make an appeal against the building of South Stream, which regards the project as an “existential threat” to the country’s own gas transit system and the money it receives from it.

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