Sat, Nov 21 2009

Gas chamber

Thu, Apr 30 2009 10:00 CET 1032 Views
Gas chamber

POWER GAMES: President Georgi Purvanov, right, envisaged that the person standing next to him when this photograph was taken would be Russian prime minister Vladimir Putin. Instead it was Russian energy minister Sergei Shmatko, as Putin stayed away from Purvanov’s energy forum because of differences over South Stream.


The South Stream gas pipeline project was the dominant theme at the April 24-25 Sofia summit on natural gas - and yet the project is not mentioned by name in the conference’s final declaration. There is more than a little significance in that.

As is well known, and firmly denied by Moscow, the reason that Russian prime minister Vladimir Putin did not attend President Georgi Purvanov’s Sofia event was that Bulgaria and Russia were at odds over a proposed bilateral agreement on South Stream.

As critics saw it, the Russians wanted effective "ownership" of Bulgaria’s gas distribution network for South Stream. Ahead of the conference, the Bulgarian response was to say that South Stream should operate through a network in parallel to the existing Bulgarian one. Transit fees, inevitably a sensitive topic, remained unresolved.

While Putin stayed away, the Kremlin was represented by energy minister Sergei Shmatko, and the Russian delegation tried hard to not only get South Stream signed, but also to get some of its key points into the conference declaration. It failed in the first respect, and did not do well in the second.

Purvanov, who has made much of touting Bulgaria’s relations with Russia as cordial but who has been among witnesses to the fact that this warmth did not extend to an exemption from a cutoff of gas supplies, or a visit by Putin to bolster the status of the Sofia conference, ended the conference with a few firm words saying that Bulgaria’s policies could not be dictated by Russia’s Gazprom.

While he boasted that the conference declaration had been adopted unanimously, it may be added that this may be in part because a careful reading of the declaration shows that it has a few things in it for almost everyone, but nothing especially strong for anyone.

For example, the word "transparency" occurs a number of times, three times in the eight principles outlined in the declaration; something unlikely to be seen warmly by Gazprom that tends to cloak its contracts and operations in the darkest murk possible. But, on the other hand, there is nothing in the declaration about enforceability of its principles and policies.

If the Sofia conference represented a work in progress, and Purvanov told the closing news conference that he hoped that the event would be the first in a series, it may represent a start, but one on a road that is very long indeed.

Russia did not get its endorsement of South Stream as a priority project for the EU. It was not expected ahead of the conference that it would, another reason for Putin to stay away. The conference declaration said: "we support the realisation of all infrastructure projects that aim at diversifying supply of hydrocarbons to Europe, in order to provide energy security for all countries involved".

This terminology certainly applies to rival project Nabucco; perhaps much more than it does to South Stream, which - critics say - would hardly do anything to reduce Europe’s dependence on Russian natural gas.

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