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Russian-Bulgarian crisis: Meaning of Borisov and Trump gas games

Author : Georgiy Kuhaleyshvili

Source : 112 Ukraine

On December 4, Russian President Vladimir Putin reproached the Bulgarian authorities for deliberately hindering the implementation of the Turkish Stream gas pipeline after negotiations with Serbian President Alexander Vucic in Sochi.
22:30, 11 December 2019

Open source

The Russian president stressed that if the Bulgarian authorities do not want to participate in the project and if the situation repeats itself as with the South Stream gas pipeline project, then another route will be found for the transit of Russian natural gas.

Bulgaria froze the construction of South Stream in 2014 on the recommendation of the European Parliament. Gazprom has developed the Turkish Stream gas pipeline project with two branches with a capacity of 31.5 billion cubic meters of gas per year as an alternative to South Stream.

According to Turkish President Recep Erdogan, the gas pipeline will start operating on January 8.

However, the Trans-Balkan gas pipeline, which will allow delivering Russian natural gas through the territory of Bulgaria, Serbia to Hungary and to the gas distribution station in the Austrian city of Baumgarten, remains unfinished.

Putin’s reproaches were voiced a week and a half after the talks between Bulgarian Prime Minister Boyko Borisov and US President Donald Trump at the White House, during which they paid attention to the energy sector of the Balkan country.

In fact, Putin protested against energy policy of the Bulgarian prime minister, who is playing his game and hopes to benefit from cooperation in the gas sector with the United States, Europe and Russia at the same time.

Borisov’s gas ambitions

Borisov expects to turn Bulgaria into a transit hub of the European Union in terms of natural gas supplies. Moreover, the prime minister is interested not only in the transit of Russian gas, but in working with other exporters.

In parallel with the construction of the Trans-Balkan gas pipeline, the construction of an interconnector gas pipeline on the Bulgarian-Greek border is in full swing. It will allow the supply of natural gas from Azerbaijan to Bulgaria and other European countries through the already commissioned Trans-Anatolian gas pipeline with a capacity of 11 billion cubic meters of natural gas per year.

In the future, Turkmenistan may join the Trans-Anatolian gas pipeline if President Gurbanguly Berdymuhamedov approves the construction of the Trans-Caspian gas pipeline.

This year, EU officials and their colleagues from Ashgabat have resumed negotiations on this issue. Bulgaria takes part in two projects competing with each other in order not only to earn more money on the transit of blue fuel, but also to prevent an increase in energy dependence on Russia.

The thing is in the foreign policy position of the conservative Borisov, who leads the center-right party "Citizens for the European Development of Bulgaria", focused on deepening the European integration of Bulgaria.

The Bulgarian prime minister sees the United States and NATO as guarantors in the field of national security and is very cautious about Russia.

Related: Putin was accompanied by armed bodyguard at Normandy Summit

The Bulgarian authorities do not want Moscow to use gas supplies as an energy lever for pressure on Sofia, as it was the case with Russian-Ukrainian gas wars in the presidency of Viktor Yushchenko.

Borisov maintains a distance in relations with the Russian Federation, given the fact that agents of Kremlin influence work in Bulgaria. Borisov’s foreign policy is contradicted by the position of President Rumen Radev and one of the coalition partners in parliament, the ultranationalist Ataka party.

They advocate rapprochement with Russia and are critical of Bulgaria’s participation in NATO. Russian intelligence is active in Bulgaria. In early November, the leader of the National Russophile Movement Nikolai Malinov, was arrested on suspicion of spying for Russia.

The Kremlin painfully perceives the dominance of the Euro-Atlantic vector in Bulgaria’s foreign policy, because during the Cold War this country was its closest military-political ally from all the countries of the socialist camp. Bulgaria was sometimes informally called the "16th Soviet Republic" (in total there were 15 republics in the USSR).

American factor

Borisov is profitable for the United States as the head of the Bulgarian government, despite corruption flourishing in Bulgaria, the dominance of pro-government oligarchs in the economy, and cases of violation of democracy (discrimination against the Roma minority, violation of freedom of the press).

At the end of November, US President Donald Trump during a meeting with Borisov supported his ambitions in strengthening energy security in Bulgaria in response to the purchase of American F-16 fighters, intention to continue rearmament of the army according to NATO standards, to allow American warships to use Bulgarian ports in the Black Sea, to purchase American nuclear fuel for the Kozloduy nuclear power plant instead of the Russian one, as well as interest in purchasing liquefied natural gas from the United States.

Bulgaria is interesting for the United States as a factor in reducing the EU’s dependence on Russian natural gas. The Russian leadership fears that in 2020 Bulgarians will first launch an interconnector gas pipeline on the border with Greece, and only then their section of the Trans-Balkan gas pipeline will be launched.

Gazprom is not interested in Azerbaijan’s gas entering the EU market first. The use of the Trans-Anatolian gas pipeline will cut gas supplies through the Turkish Stream by half.

It should be borne in mind that Gazprom’s share in the European market is declining due to the fact that the EU tripled the import of liquefied natural gas, including from the United States. Since 2017, the share of Russian gas in the European market has decreased from 34.7% to 32%.

Even Turkey, in which interests the construction of the Turkish Stream is, reduced the import of Russian gas by 36% (to 8 billion cubic meters) in the first half of 2019, but increased the import of liquefied gas from Algeria, Qatar and the United States by 14% (to 7,14 billion cubic meters). The Russian gas pipeline loses its economic feasibility before commissioning.

Bluff of Putin

Reproaching the Bulgarian authorities for deliberately delaying the construction of the European part of the Turkish Stream, Putin hoped to intimidate Borisov and make it clear that if he gives priority to the implementation of projects of other gas pipelines, his country may lose the opportunity to transit Russian gas.

The Trans-Anatolian gas pipeline is a bone in the throat of Russia. Gazprom wants Bulgaria to transit exclusively Russian gas, as Ukraine does. So Putin talked about alternative routes.

The delivery of Russian gas to the countries of southern and southeastern Europe is possible through the territory of Greece, if the Poseidon gas pipeline project with a capacity of 8 billion cubic meters is implemented. This pipeline can connect the gas transmission systems of Turkey and Greece with Italy along the bottom of the Ionian Sea.

Last year, Russian authorities discussed with the then Prime Minister of Greece Alexis Tsipras the possibility of his country's participation in the Turkish Stream gas pipeline project.

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In February of this year, Erdogan and Tsipras confirmed Greece’s intention to participate in the project. The current head of the Greek government, Kiriyakos Mitsotakis from the center-right New Democracy party, admits the possibility of participating in the transit of Russian gas, but, like his Bulgarian counterpart Borisov, advocates diversification of the natural gas import directions by the European Union.

However, this is not the right time for the Greek and Turkish authorities to discuss cooperation in the implementation of the Turkish Stream. Recently, a new dispute has flared up in relations between the two states. Greece does not agree with the new agreement of Turkey and Libya on the delimitation of maritime borders in the Mediterranean Sea.

According to the document, the Turkish sea borders are indicated in the waters claimed by Greece. Erdogan is following Turkish ultranationalists, as retired admiral Ramazan Gundeniz, who proposed the Blue Homeland doctrine in 2006 and advocated Turkey’s dominance in the Mediterranean, Ionian and Black Sea. Relations between Greece and Turkey are also complicated by the unresolved dispute over the demarcation of the Aegean Sea.

Another alternative option is to join the Turkish Stream to the Trans-Adriatic gas pipeline under construction, designed to supply up to 10 billion cubic meters of Azerbaijani gas to Italy through the territory of Greece, Albania and the bottom of the Adriatic Sea.

In the best case, Russian gas will be a supplement, in the worst - the Azerbaijani oil and gas company SOCAR, which controls a 20% stake in the pipeline, will simply block the participation of Russians. Putin’s reproaches against Bulgaria are just a bluff.

It is not surprising why Borisov, in response to the attack of the Kremlin’s master, said that Russia had no alternatives except Bulgaria for the transit of gas through the Turkish Stream, and the Trans-Balkan gas pipeline would be built before the end of 2020, despite delays. In this case, the owners of the situation are Bulgarians, not Russians.

Ukrainian interests

For Ukraine it is not profitable to build either the Trans-Balkan gas pipeline and the Turkish Stream, nor the interconnector on the border of Greece and Bulgaria and the Trans-Adriatic gas pipeline, nor the commissioning of the Trans-Anatolian gas pipeline.

All these projects, in combination with the Nord Stream 2 gas pipeline, will negatively affect the transit potential of our country and reduce the importance of Ukrainian gas transportation system. The transit of natural gas from Russia to Europe brings Ukraine $ 3 billion a year.

Last year, Russia supplied 86,7 billion cubic meters of natural gas to Europe through the gas transportation system of Ukraine (the volume of deliveries decreased by 7,1%). In the foreseeable future, the workload of the gas transmission system of Ukraine will be minimized.

Perhaps Ukraine will be able to buy Azerbaijani gas by reverse through the territory of Hungary, but we will have to forget about the transit of blue fuel.

Politically, Ukraine benefits from reducing Gazprom’s share of the European market and the EU’s diversification of natural gas imports. Europe is the main market for Russian gas.

The smaller the volume of energy exports, the less money will replenish the Russian treasury, the more painful the crisis will be for the Russian commodity economy, which will strengthen the effect of Western sanctions.

Related: Putin claims there is some thaw in relations with Ukraine

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