News-20 Jan 13: WITH BULGARIA JOINING, SOUTH STREAM GAS PIPELINE CLEARS LAST HURDLE

WITH BULGARIA JOINING, SOUTH STREAM GAS PIPELINE CLEARS LAST HURDLE

Bulgaria has formally agreed to join the South Stream Gas pipeline project, the last hurdle that needed to be cleared to deliver Russian gas to large parts of Europe.

Bulgaria also signed a new ten-   I' year Russian-gas-supply   contract,   s which foresees a 20 per cent price cut   c from January 1, Prime Minister Boi-ko-Borisov said on November 15, 2012 after signing the documents with Gazprom's CEO Alexei Miller.

The  South  Stream  pipeline— funded  by  Gazprom, Italy's  Enif France's EdF and Germany's Winter shall—is due to start operating in 2015, bringing up to 63 billion cubic meters of gas annually to the Balkans,' Austria and Italy.

The Bulgarian section of the pipeline will be 540 kilometre (335 miles) long and will cost (euro) 3.3 billion ($ 4.2 billion), the government said.  

Gazprom and its partners in South Stream have made a final decision to invest in the 16 billion euro underwater gas pipeline, supporting Russia's dominance of the European market and gaining a jump on rival projects.

The decision late on November 14, 2012 showed Gazprom's determination to hang onto its core European market despite falling demand and pressure from the European Union, which is conducting an antitrust investigation of the Russian gas export monopoly and supports rival projects to carry gas from Central Asia.

Furthermore, the estimated    16 billion euro cost for South Stream is seen as high; and its status is unclear under the European Union's Third Energy Package, which bars suppliers from owning transportation capacity.

Gazprom, which is expected to fund half of the total capital expenditures according to its share in the project, did not disclose the financial outlays, which according to some analysts may exceed 25 billion euros once the onshore sections are built.

The pipeline was designed to reduce the risks of shipping gas across Belarus and Ukraine, which have had a number of price disputes with Russia, some of which have led to cuts in supplies to Europe through existing pipelines.