Brussels, 21/01/2008 (Agence Europe) - During an official visit by Russian President Vladimir Putin to Sofia on Friday 18 January, Bulgaria and Russia signed eight energy agreements, the three most important of which are of interest to Europe in terms of energy security. These agreements will ensure Bulgaria's long-term energy security, which has been under some threat since the total closure of the Kozloduy nuclear power plant and will help ensure that of Europe. They will also allow Russia, the EU's main gas supplier and the world's second largest oil exporter, to consolidate its position on the European energy scene, particularly in the Balkans.
Firstly, Bulgaria and Russia signed a €4 billion contract for the construction of a nuclear power plant at Belene. This will be the first time Russian group Atomstroyexport has built a nuclear plant in an EU country, and it will hold a 49% share in the capital of the plant (with the remaining 51% being held by Bulgarian national electricity company NEC). Franco-German consortium Areva-Siemens, subcontracting from Atomstroyexport, will provide the security equipment, control and management systems, electric systems, and heating and ventilation systems. The financing plan will be worked out by Sofia by the end of the year, but President Putin has said that Moscow was ready to provide credit to the Bulgarian part. In December, Bulgaria was given the go-ahead from the European Commission for the construction of a nuclear plant at Belene on the Danube. This plant, with two 1,000 megawatt reactors, will begin production in 2013 and will have a working life of 60 years. Construction was started in 1987 with initial investment of almost $1 billion, but was suspended in 1990 under environmentalist pressure after the fall of the Communist dictatorship. Bulgaria hopes that the new power plant will see it regain its position as a major energy exporter, which it lost with the partial closure of the Kozloduy power plant at the end of 2006. After closing sections 1 and 2 of the power plant to enable EU accession talks to begin, Sofia was required, unwillingly, to shut down reactors 3 and 4 as a condition for its accession on 1 January 2007. The consequences of this move were great for the country and for the Balkans since, having exported 8 billion KWH in the Balkans in 2006, Bulgaria's exports shrank to 300 KWH in 2007, before stopping totally last week. On the eve of President Putin's arrival in Sofia, Bulgarian Prime Minister Serguei Stanichev reaffirmed his determination to persuade the EU of the need to re-open each of Kozloduy 440 MW reactors 3 and 4, which had been modernised before their shut-down. Ferran Tarradellas, the spokesman for Energy Commissioner Andris Piebalgs, immediately announced that the Commission had rejected this as an option.
Bulgaria and Russia also concluded an inter-governmental agreement setting the extent of Bulgarian participation in the construction of the Russo-Italian South Stream gas pipeline. The 900km long South Stream, with its 30 billion cubic metre capacity, will channel Russian gas through the Black Sea, then Bulgaria, where one branch of the pipeline will go to Greece and Italy and a second will also reach Italy, via Romania, Hungary, the Czech Republic and Austria. The total cost of the project by Russian gas producer Gazprom and Italian energy producer ENI is estimated at €10 billion. Again through Tarradellas, the Commission noted that it considered the competing Nabucco project to be “a major priority compared with South Stream by virtue of the fact that it will not only diversify transport routes, but also sources of supply”. The 3,300km long Nabucco pipeline, which is intended to reduce the EU's dependence on Russian gas imports, will take Central Asian gas (mainly from Azerbaijan) from the Caspian Sea, through Turkey, Romania, Bulgaria and Hungary, thereby skirting round Russia, to Austria. “Since Bulgaria is not opposed in any way to the Nabucco project, which is seen as a competitor to South Stream, there is no reason to put in doubt its agreement to another gas pipeline supported by the EU since this will make a further supply route contributing to EU energy security,” Tarradellas told Bulgarian press. While discussions with Hungary are at an advanced stage (see EUROPE 9502), talks on the Nabucco project between the Commission and Sofia remain deadlocked at this point.
The Bulgarian and Russian authorities also concluded an agreement on Bulgarian involvement in the Burgas-Alexandroupolis oil pipeline, a new pipeline transporting Russian oil from the Black Sea ports to the markets of Europe, the United States and the Asia-Pacific region, through Bulgaria and Greece. This pipeline - which will run 280 kilometres, has an annual capacity of between 35 and 50 million tonnes and has an estimated cost of just under €800 million - should be opened in 2009-2010. In April 2005, the heads of state of Bulgaria, Greece and Russia signed an intergovernmental memorandum on the cooperation of their three countries in this plan. (E.H.)