The work on Black Sea undersea gas pipeline going around Ukraine started in June 2007 in the wake of gas war with Russia initiated by Kiev. Along with the offshore North Stream in the Baltic Sea the South Stream was to bypass the politically unstable Ukraine to ensure regular supplies to Bulgaria, Serbia, Hungary, Croatia, Slovakia, Slovenia, Austria, Greece and Italy. The planned capacity of the $16 billion project was 63 billion cubic meters. The beginning of construction was slated for 2013 but Gasprom changed the plans to hold the kick-off ceremony led by Russian President on December 7, 2012. The offshore section of the pipeline was to be launched in December 2014. Pipes were transported to the Bulgarian city of Varna.
The United States vehemently opposed the project. In July, 2009 Bulgaria left the South Stream in favor of US-backed Nabucco connecting Europe with Azerbaijan and the Iranian South Pars gas field. By the end of 2010 Sofia joined the project again. In January 2011 Günther Oettinger, the EU Commissioner for Energy, called on European states to dissuade Russia from building the pipeline and make it change the plans in favor of Ukrainian route. In April 2014 the European Commission adopted a resolution against the South Stream. The US influenced the decision. In early June Bulgarian Prime Minister Plamen Oresharski announced that the laying of the South Stream gas pipeline will be discontinued until all the issues with Brussels are resolved. In September the outgoing European Parliament called on the states involved in the South Stream to leave the project no matter a lot of money had already been spent to build the pipeline’s land section.
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Bulgarians are still to estimate the damage inflicted by the government that ceded its position to the detriment of national interests under the pressure from the US and the EU. According to the accords reached at the 10th international Investment Forum, the South Stream would get 2, 5 euros a year for gas transit. With the South Stream abandoned Russia signed an agreement with Turkey on the extension of offshore Blue Stream pipeline which would have capacity of 63 billion cubic meters – the same as the South Stream. The existing pipeline is going to be upgraded to increase the current deliveries (26-30 billion cubic meters) by 3 billion cubic meters a year. Around 16 billion cubic meters will go to Turkey. The rest will be shipped through Turkey’s pipeline network to Europe.
Of all South Stream transit countries Bulgaria will top the list of losers. Serbia and Hungary will also suffer heavy losses as the construction of land section was underway. These two countries can make up for the loss as the plans envision the construction of gas hub on Turkish soil in the vicinity of Greek border. Gas flows could be redirected to Serbia where some sections of the South Stream have been built. Then gas deliveries may return to the previous route. The Greece-Italy section will remain almost unchanged.
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The agreement concluded by Russia-Turkey on December 1, 2014 changes the balance of forces in Europe and the Middle East. The extension of Blue Stream kills two projects backed by Washington and Brussels: Nabucco closed in 2013 though the idea is not completely forgotten and TANAP (the Trans Anatolian Natural Gas Pipeline), a natural gas pipeline stretching from Azerbaijan through Turkey to Europe. The Iranian South Pars gas field may become part of the Blue Stream as Tehran has plans to sell gas to Europe too. The Leviathan, a large field located in the Mediterranean Sea off the coast of Israel, is another potential source of gas to fill the Blue Stream pipeline. There is another fact that was mentioned during the visit. With the sanctions imposed by the USA remaining in force, the Moscow-Tehran talks are on the way on purchasing Iranian manufactured goods and agricultural products by Russia.
The South Stream is shelved. Russia is to deliver the same amount of gas to Southern Europe as planned before. It also gained some strategic advantages. Russia and Turkey, a large regional power, established the relations of stable partnership. The US can no longer influence the plans for gas supplies to Europe by Azerbaijan and Iran. South European states could see with their own eyes the damage inflicted as South European states joined the anti-Russia sanctions. The pro-US stance of Brussels and Sofia deprived them of stable gas supplies from Russia. Anyone can see how destructive the EU Third Energy Package is. It imposes limits on economic sovereignty of EU-member states. It is also an attempt to dictate prices and deal conditions to producer.
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The deal signed by Russia and Turkey envisions the construction of gas hub near the Greek border with a leg stretching to Europe. To secure long-term supplies a second «input» hub may be required to bring together the flows from Russia, Azerbaijan and Iran.