For those who follow the progress and
inclinations of Bulgaria’s centre right populist government ever since it came
to power last July, the announcement made on June 11th by prime minister Boyko
Borisov, over his intention to pull out of the much touted
Burgas-Alexandroupolis oil pipeline project did not come as a total surprise.
The 256 km pipeline which will be able to transport some 35.0 -50.0 million tones per year, was
originally conceived in the early 1990’s as an easy and economical way to by
pass the congested Bosporus straits. With oil shipping cargoes set to rise
steeply over the coming years, especially after Kazakhstan’s Caspian oil production comes on stream in
2014 the need for a pipeline bypass acquires a new urgency.
Mr
Borisov has never really hidden his distaste for Russia and his preference for
anything American, whether in culture
or politics. In that sense it is rather
surprising why it took so long for the actual rift to happen. Because the
abandonment by Bulgaria of the above Russian backed oil pipeline project, where
Russia controls 51% of the operating consortium, and the parallel abrupt
termination of negotiations over Russian
participation in the Belene nuclear plant can only mean a complete turnaround
on economic and political relations with Moscow, short of total collapse.
According to most analysts next in line to
suffer will be the South Stream gas pipeline project where Bulgaria is to play
a key role since the huge 63 BCM capacity pipeline, which will cross underwater
the Black Sea, will surface in Bulgaria where it is planned to branch off in a
north and south west direction. Mr.Borisov of late looses no opportunity in
promoting the Nabucco gas pipeline which he very misleadingly calls ‘American’,
although it is clearly a European project. However, Nabucco’s future is far
from certain as there is no guarantee as yet for its huge gas supply
requirements. On the other hand Bulgaria’s geographical position ensured
optimal economic design and maximum
route utilization for the South Stream pipeline, since by going through its
territory the pipeline could at the same time serve several countries and
thousands of companies. Rerouting the pipeline through Romania , as Gazprom has
stated that it is already considering, not only means a significant time delay
but possibly reducing it in size. That would be a significant blow to the
project’s long term viability argue industrial sources.
Mr.Borisov’s decision to alienate his
country from some of the key energy routes of the region no doubt signifies a
major political re alignment as energy has come to dominate the political
agenda of the Black Sea over recent years. However, the reasons cited by Mr.
Borisov, and which are supposedly centered on the huge environmental dangers
and the lack of financial resources which need to be contributed by Bulgaria,
are far from convincing. To start with the finances for the construction of the
pipeline are guaranteed by the majority shareholder, which includes Russian
state controlled oil companies. Then the environmental concerns are grossly
overstated since the Burgas region, where the pipeline will go through in its
initial stages is an industrial area anyway and its overland route through
Bulgarian territory is not interfering with any wild or rare fauna or flora,
especially since at the end of the day the pipeline will be buried five metres
underground without leaving any visible tracks. Nor is any deep water drilling
involved in any part of the project as Mr.Borisov erroneously and purposely
implied.
The real reasons behind Sofia’s change of
mind as far as regional energy policy is concerned are to be found in
Mr.Borisov’s newly formulated Atlantic
policy whereby Bulgaria seeks much closer ties with Washington rather than
Brussels or god forbid Moscow, not only on energy but over a wide range of
subjects including technology, welfare, investments, foreign policy and
defense. A clear demonstration of this fast developing Bulgarian-USA special relationship was given
on May 27 during the official visit to Sofia of CIA’s head Mr.Leo Paneta when
Mr.Borisov in press statements prided himself over the deep routed ties and
excellent cooperation between the security services of the two countries.
Although we shall never know if it was
American pressure or a Bulgarian preemptive action -in order to reconfirm their
Atlantic credentials- that forced Mr.Borisov to take a unilateral decision to
pull out of a parliament approved and official intergovernmental agreement (the
Burgas-Alexandroupolis tripartite agreement between Russia, Greece and Bulgaria
was signed in Athens in March 2007), the fact remains that Sofia is now
distancing itself from both Greece and Russia. For Greece the damage from the
non realization of the project is significant in geopolitical terms as it has
sought over recent years to strengthen its position as a potential energy hub.
For Russia the damage is far bigger and more substantial in both geopolitical
and financial terms as its alternative, to route the new Caspian oil through
Turkey, means building a more expensive pipeline (i.e. Samsun-Ceychan) and
forging even closer ties with Turkey, something which has so far cleverly
sought to avoid.
Given Russia’s energy supremacy and its
capability for retribution (read Ukrainian gas crises in 2006/2007 and 2009) it
is not an exaggeration to state that Mr.Borisov is playing with fire by openly
defying Moscow. Pipelines and LNG plants, permanent or floating, cannot be
constructed in few months and it remains to be seen where Bulgaria will get its
gas from once Moscow closes the taps. Greece, which is well supplied with
natural gas thanks to its LNG terminal in Revithousa and its interconnector
with Turkey, may not be as willing this time to oblige by reversing the flow of
its main pipeline (the one which brings Russian gas to Greece via Bulgaria).
Nor will it be that motivated to speed up plans for the construction of the
Komotini-Stara Zagora interconnector. Such projects imply a steady and mutually
advantageous cooperation, a position which of late Bulgaria does not appear to
share
.