Putin to develop energy ties with Bulgaria
Thursday, January 17, 2008

SOFIA - Reuters


Russian President Vladimir Putin will seek closer energy ties with
Bulgaria during a visit to Sofia starting today, but faces protests over
the former Soviet satellite state's growing economic contacts with
Moscow.

Putin will oversee the signing of several agreements and try to
confirm the new European Union (EU) member state's participation in a
major gas pipeline project, seen as helping export monopoly Gazprom's
expansion drive in south-east Europe.

Sofia will seal a deal with Atomstroyexport, controlled by Gazprom,
to build the Balkan country's planned new 4 billion euro nuclear power
plant, the Bulgarian government said.

Moscow and Sofia, which receives all of its gas and oil from Russia,
will also sign an agreement to set up a project company for the
construction of a long-delayed trans-Balkan pipeline to carry crude via
Bulgaria to Greece.

The two sides will discuss the ambitious South Stream pipeline
project, proposed by Gazprom and Italy's Eni to carry Russian gas under
the Black Sea to Europe via Bulgaria.

Analysts say South Stream is Gazprom's challenge to the rival Nabucco
pipeline scheme, which aims to supply central Asian gas to the EU and is
a key plank in Brussels' plans to diversify gas supplies away from
Russia.

Fears about EU's heavy energy dependency on Russia have emerged after
a political dispute between Moscow and Kiev in 2006 cut off exports via
Ukraine. Russia supplies a quarter of the EU's gas.

Bulgaria, torn between proving its EU credentials and maintaining its
renewed ties with Russia, is eager to diversify its gas sources by being
a partner in Nabucco but is also attracted by South Stream because of
lucrative transit taxes.

"The transit does not increase the Bulgarian economy's dependency,"
Foreign Minister Ivailo Kalfin told the daily Dnevnik this week in
response to criticism at home that Bulgaria was placing its energy
future entirely in Russian hands.

"It would be a lack of foresight if we let all energy projects bypass
us. We should look at our ties with Russia without much nervousness and
political anxiety," he added.

Kalfin and Economy Minister Petar Dimitrov, however, said Sofia was
not in a hurry to sign a deal with Moscow about South Stream and that
Bulgaria insisted on holding a majority stake in the pipelines to be
laid on its territory.

Several Bulgarian non-government organisations plan rallies during
Putin's two-day visit to protest against Sofia's expanding economic and
energy ties with Moscow after relations nearly froze in the decade
following the collapse of communism.

"No economic benefits could be justified if they come from a
non-democratic country, which has been persistent in its attempts to
dominate Bulgaria throughout its new history," said Ivan Gruykin of
civil society organisation "Spravedlivost".

Putin's visit will also kick off the "Year of Russia" to mark the
130th anniversary of Bulgaria throwing off Ottoman Turk rule with
Russian help. Bulgarians say they are still grateful to Russia, despite
stagnant ties in the last decade.