The Russian business daily claimed on August 20: “Sofia, under pressure from the United States, has twice put an end to Russian projects – the South Stream natural gas pipeline and the Belene nuclear power plant (Belene NPP).”
In August, debunked the claim that Bulgaria quit the Belene NPP project in 2012 under pressure from the United States. The analysis showed that Sofia abandoned the construction of Belene NPP, which started in 1981, because of high costs, inability to attract a major Western investor and Russia's unwillingness to share the project’s financial risks, not because of U.S. pressure. Russia’s state-owned Atomstroyexport inflated its cost projections three-fold, which caused two critical Western investors to pull out. One of them, Germany’s RWE, was a strategic investor with a 49 percent share in the nuclear power plant.
Vzglyad also claimed that Sofia ended the South Stream natural gas pipeline project under U.S. pressure.
That claim is false.
Russian President Vladimir Putin to the project after years of disregarding the European Union’s competition rules and energy regulations.
In blaming Bulgaria for the project’s cancellation, Vzglyad is merely repeating Putin’s words and thus serving as a tool for disseminating the Kremlin narrative about South Stream’s demise.
The Russian state-owned natural gas monopoly Gazprom announced in 2006 plans to builda pipeline under the Black Sea from Russia to Bulgaria, Serbia and Hungary, and eventually extend it to the Baumgarten Gus Hub in Austria. Moscow used the involving gas supplies to Europe via Ukraine, when Gazprom stopped gas deliveries in the middle of a cold winter, to justify the project.
South Stream was designed to as a transit country for Russian gas, consolidate on energy supplies to southeastern and Central Europe, undermine European anti-monopoly and energy legislation, divide the European Union by enticing some of its members with benefits from the pipeline, and compete with alternative gas supply projects like the Southern Gas Corridor from Azerbaijan.
But the project ran into two major problems with the European Union, which, since the first natural gas supply -- also caused by Gazprom-- had been working to improve its energy security by curbing energy supply monopolies and diversifying gas deliveries.
Moscow attempted to build the pipeline in violation of EU competition and anti-monopoly rules as well as in breach of the Third Energy Package adopted in 2009.
In its South Stream dealings with individual countries, Moscow attempted to avoid transparency and accountability to the European Commission. The South Stream project involved separate agreements with each participating transit state, which were not public. There was never a multilateral agreement or any attempt to reach an agreement with the European Union. Working on a bilateral basis with individual EU members was the Kremlin’s chosen way of doing business, and this was later replicated in the and natural gas pipeline projects. In 2013, the European Commission found these bilateral deals in .
The South Stream pipeline was divided into separate sections for each country, which were managed by joint ventures between Gazprom and the national gas companies of those countries. While Gazprom and Bulgargas had equal shares in South Stream Bulgaria, in Serbia, Gazprom had 51 percent in the joint venture with Srbijagas. Each joint venture was established without a public procurement tender that would have opened it to other European companies. Nevertheless, the were supposed to finance, build, and operate the South Stream pipeline section in each country.
The European Commission objected to this arrangement and called on South Stream participating states, all of which were either EU members or part of the European Energy Community (now the European Energy Union), to comply with EU rules.
But on May 27, 2014, South Stream Bulgaria, the Gazprom-Bulgargas joint venture, awarded a contract for the Bulgarian portion of the pipeline to the . The major shareholder of Stroytransgaz Holding (63 percent) is the Volga Group, owned by Gennady Timchenko, who was placed on the U.S. sanctions list on March 20, 2014. Timchenko is a close friend of Russian President Vladimir Putin and was, at the time he was added to the U.S. sanctions list, ranked by Forbes Magazine as Russia’s sixth richest man. His Volga Group and another ten related entities, including Stroytransgaz Holding, were also sanctioned by the US Treasury Department on April 28, 2014.