Bulgaria Halts Work on South Stream Gas Pipeline

Bulgaria’s prime minister has ordered on Sunday a halt to construction work on the Gazprom-led South Stream pipeline project planned to bypass Ukraine as a transit country and consolidating Russia’s energy grip in Europe. Plamen Oresharski said after meeting U.S. Sens. John McCain, Christopher Murphy and Ron Johnson that he has ordered all work on the disputed project to continue only after consultations with Brussels.

Last week, the European Commission opened an infringement procedure against the Balkan country and asked construction work to be stopped, arguing that Bulgaria hadn’t respected EU internal market rules covering the award of public contracts. The standoff over Ukraine has forced the 28-nation EU into a sudden rethink of its energy policies to make it less reliant on Russia and its state-owned gas company Gazprom.

In particular, the EU decision will affect the South Stream pipeline, in which Russia’s Gazprom holds a 50-percent stake, and would provide an alternative supply route for Bulgaria, Serbia, Croatia, Hungary, Slovenia, Austria and Italy. It is expected to ship up to 63 billion cubic meters of gas from 2018. Bulgaria, which is almost totally dependent on gas supplies from Russia, is trying to avoid another cutoff after it was among those who suffered most of the gas price dispute between Russia and Ukraine in 2009.

Washington had already voiced criticism over Bulgaria’s decision to award the construction of the Bulgarian stretch of South Stream to a consortium led by Russia’s Stroytransgaz — a Russian company subject to U.S. sanctions. In a statement on Friday, U.S. Ambassador Marcie B. Ries voiced “deep concern” over the decision. “Now is not the time for business as usual with Russia,” she said. “We advise Bulgarian businesses to avoid working with entities sanctioned by the United States.” “We understand that there are some issues concerning the South Stream pipeline project,” McCain said Sunday and added that “obviously we want as little Russian involvement as possible.”