US to help Bulgaria reduce dependence on Russia

The US has promised to help Bulgaria reduce energy dependence on Russia, as Europe digests Gazprom’s latest announcement on EU gas supplies.

Secretary of state John Kerry i, on a visit to Sofia on Thursday (15 January), said he will post a US envoy on energy security to Bulgaria and mobilise the Export-Import Bank of the United States to help pay for investments in nuclear energy, liquid gas, and gas interconnectors.

He also said he has urged EU institutions to provide “rapid European … commitments to try to resolve this energy challenge”.

He welcomed Bulgaria’s decision, last year, to halt construction of Russia’s South Stream gas pipeline.

“I know the people of Bulgaria are anxious about what the meaning is in the aftermath of the South Stream decision … that’s why we’re deeply committed to helping your government, which has made difficult decisions, but we think strong decisions”, he told press after meeting PM Boyko Borisov.

With Bulgaria relying on Russia for 100 percent of its gas supply, he added: “the importance of diversifying the energy supply - that is not directed against any country [Russia], it’s simply a reality. No country in the world should be totally dependent for its energy supply on one other country”.

But he warned Moscow, which has strong ties in Bulgaria’s business and political elite, not to meddle in its internal affairs.

“Whether or not Russia were to choose, for whatever reason, some other form of retribution, is obviously something to be seen as we go forward”, he said.

“But we stand ready … both through our Nato partnership as well as through the choices that Bulgaria itself has made, to be supportive of Bulgaria in this time of economic and security challenge.”

He also urged Bulgaria to do more to fight corruption in order to protect its sovereignty and to attract US investors.

“It’s about providing the climate for investment and shielding the country from those who exploit the situation to gain undue influence over your choices as a sovereign nation.”

For his part, Borisov welcomed the US bank’s support for a project for US firm Westinghouse to expand the Kozloduy nuclear power plant.

He noted there is currently an environmental “moratorium” on exploration of Bulgaria’s shale gas reserves.

He also floated the idea of external support for Bulgaria to build a gas-trading “hub” on its border with Turkey.

The hub project arose after Russia last month said it would build a new pipeline to Turkey instead of South Stream.

The CEO of Russian gas firm Gazprom, Alexei Miller, added in Moscow on Wednesday that when the “Turkish Stream” pipeline is built, he will divert EU transit volumes from Ukraine - some 80 percent of Russia’s EU gas sales - to Turkey.

Borisov noted the hub idea is relevant only “if, of course, that project that we’re hearing about between Turkey and Russia comes to fruition”.

His comment reflects widespread scepticism that the Russia-Turkey project will ever come to be.

For its part, the European Commission said on Thursday “at this moment this is an expression of intent, we need to study this further”.

Andriy Kobolyev, the CEO of Ukrainian gas distributor Naftogaz, went further.

He said in a statement that the Turkish project “makes no economic sense”.

“It would abandon a perfectly well-functioning and reliable system in favour of investing billions of euros into a new one - a cost that would ultimately be paid by European households and businesses”.

“This threat is a political bluff.”

Ukraine’s EU ambassador told EUobserver that Turkey itself also seems sceptical.

“What’s important, is the Turkish reaction [to Miller’s announcement]. Until now, the Turkish side is silent”.

The silence continued on Thursday when Turkish PM, Ahmet Davutoglu, met with press and top EU officials in Brussels.

He said nothing on the Russian plan, noting only that the EU should open the energy chapter in its accession talks the better to discuss the situation.

“It's very strange", he said, that the chapter, which is being blocked by Cyprus due to a decades-old territorial dispute, remains closed.

A Turkish source, speaking on condition of anonymity, said the Russian pipeline is unlikely to be built because, following the rouble crash, Russia cannot afford it.

He added that even if it comes to be, the onward shipments of Gazprom gas into the EU would have to be subject to EU anti-monopoly laws - the very reason why Russia abandoned South Stream.

“Frankly, nobody in Turkey is taking it very seriously. People aren’t holding their breath,” he noted.

“In the present climate, the Russians feel isolated. So they have the same reflex as the Iranians used to have - to announce some kind of new poject with Turkey, and the whole idea is to show they have still have international partners.”