Atlantic Council: "Turkish Stream" in Bulgaria will not be completed in the way planned by the Kremlin
The NGO Atlantic Council of Bulgaria (ACB) published following statement on Balkan Stream project:
“In its official positions, the Atlantic Council of Bulgaria (ACB) has repeatedly stated that the Turkish Stream gas project, also called the Balkan Stream in Bulgaria, will not be implemented according to Moscow's plan and calculations.
The ACB has always stressed that this pipeline is a geopolitical project of the Kremlin and that it is a strategic mistake for the Bulgarian government to assist in its implementation. At the discussion forums organized by the ACB, the energy experts in Bulgaria have proved more than once its economic inefficiency, as well as the impossibility in the next 20 years to recover the over BGN 3 billion of state funds invested in it.
The state institutions of the Republic of Bulgaria, the governments of the allied countries of Bulgaria in NATO and the EU, as well as the Bulgarian public through the national media were acquainted with our positions and recommendations.
Despite our numerous calls for this project not to be implemented under the conditions requested by Moscow, the Bulgarian government began its implementation in 2019 and today is nearing the end of its completion.
It has always been clear to ACB that this "expansion of Bulgaria's gas transmission network" is in fact a continuation of the "Turkish Stream" through Bulgaria, disguised as a Bulgarian gas project.
The ACB has long warned that the Turkish Stream is primarily a Russian geopolitical energy project of strategic importance to Russia, as well as a security risk for Ukraine and the countries of the Black Sea region. This means that its realization could only take place if the European Union and the United States agree to continue Russia's gas dependence on Southeast Europe for decades to come.
As early as 2019, after the adoption of a number of laws in the United States regarding Nord Stream-2 and Turkish Stream, it became clear that the Kremlin would most likely be stopped in the implementation of its geostrategic gas expansion in Europe.
Construction of Nord Stream 2 was effectively halted late last year after Switzerland-based Allseas, a company specializing in laying seawater pipelines, shut down its ship in the Baltic Sea. The company decided that the loss it would suffer from US sanctions would be very large and decided that it should not take any risks. For almost a year now, Gazprom has been unable to complete this pipeline and is suffering huge losses. So far, no other country in the world has a similar ship with the necessary technical capabilities that can lay the pipes in the remaining less than 200 nautical miles to the German coast.
Thus, the construction of Nord Stream -2 was blocked.
In the same way, we expect the situation around "Turkish Stream" to develop after the United States stated that it does not matter what it is called in Bulgaria. Whether "Balkan Stream", "Balkan Gas Hub" or "expansion of Bulgaria's gas transmission network" is the same for the United States, for Washington it is "Turkish Stream" passing through Bulgaria.
US Assistant Secretary of State for Energy Francis Fannon, who recently visited Sofia, diplomatically warned that sanctions could soon be imposed on companies, builders of the pipeline, as well as suppliers of equipment for it.
There is already clarity and a deadline of November 20 for companies threatened by sanctions to take action to avoid the danger of severe financial losses, incl. blocking their bank assets in US banks.
At particular risk is the main contractor of the project - the Saudi consortium Arkad. Arkad is the main builder of the pipelines of one of the world's largest oil companies, Saudi Aramco, and possible sanctions on it would bring huge losses. Although in Bulgaria Arkad works mainly with Russian construction companies as subcontractors, they are dependent on the main contractor of the project - Arkad, and if the Saudi consortium stops working, the Russian subcontractors will stop.
Recently, the Minister of Energy, Ms. Temenujka Petkova, stated that the linear part of the gas pipeline will be completed by the end of the year. But he did not say whether gas would flow to Serbia from January 1, 2021. Apparently, Moscow is in a hurry because it hopes to be able to use 90% of its capacity.
But that may not happen if Brussels and Washington take countermeasures.
In a number of its documents and positions, the European Commission has repeatedly stated that it is inadmissible for any energy supplier company to be placed in a monopoly position and to engage more than 50% of the capacity of a gas pipeline passing through the territory of the European countries. union.
The European Commission has enough tools to force Bulgaria to renegotiate Gazprom's declared capacity of 90% at the entry point of the Bulgarian-Turkish border. If Gazprom Export wants to transit Russian gas to Serbia and Hungary, it should be agreed that this will not be in the quantities it plans to transit through our territory due to the fact that Bulgaria, as a member of the European Union, cannot violate the common union rules. Not that the Minister of Energy claims that the project complies with all European directives. These are words that sound more like an excuse to Moscow. Because in 2018, Putin had asked Prime Minister Borissov for "reinforced concrete" guarantees that the project would not be stopped by the EC.
Brussels is silent for now. But the United States is in an active position and has threatened sanctions.
The US company Solar Turbines Incorporated, based in San Diego, California, is most threatened by possible sanctions. It is wholly owned by the American company Caterpillar Inc. and manufactures the world's most widely used industrial gas turbines for compressor stations that push natural gas through pipelines.
Two new compressor stations are currently being built along the route of the Turkish Stream gas pipeline through Bulgaria - Nova Provadia and Rasovo. Four American compressor turbines must be installed in one and three in the other.
The big question is: Will the turbines be delivered, and if some have already been delivered, will they be installed and put into operation by the end of 2020, as the Kremlin wants and expects?
Our assumption is that the American turbines will not soon work in the Bulgarian section of the Turkish Stream.
The pipes of the gas pipeline may be laid in the ground, but without the compressors no gas with the required pressure can pass through them. We expect the American company "Solar Turbines Incorporated" to stop working on this project in the coming days or weeks.
If Russia managed to successfully lay the pipes produced in Russian factories on Bulgarian territory and by involving its builders and installers tried to ensure the completion of the project on time, it will now not be able to install its own Russian gas turbines for the compressor stations. Because nowhere in the world are gas turbines produced with the technical parameters of the American ones, specially planned for the Bulgarian section.
This is how we expect the Turkish Stream project through Bulgaria to be blocked. Formally, Bulgaria will have fulfilled its commitment to the Kremlin to complete the "linear part" of the "expansion of the gas transmission network" of the country. But it will not be able to be used by Gazprom until the compressors on the pipeline are operational.
As the project is geopolitical and not national, its completion will not depend on the will of our country. If this was a Bulgarian project, then there was no need for Prime Minister Borissov to often inform Russian President Putin how far construction has come.
herefore, it is most likely that negotiations are taking place or are about to take place at the diplomatic level between the United States, the European Union and Russia in order to reach a mutually acceptable compromise.
We expect the project to be completed at the earliest after the deliberately delayed interconnection between Bulgaria and Greece, which was delayed by more than 10 years, and at the latest when the terminal in Alexandroupolis for liquefied natural gas delivery opens. In it, Bulgaria owns 20% of the property. Only when the diversification of gas supplies to Bulgaria is completed and it is freed from energy gas dependence on Russia, it is possible that the so-called "Balkan Stream" or gas hub "Balkan Stream" will be finally completed and put into operation.
Only then will this pipeline not be called the "Turkish Stream", because it will flow not only Russian gas, but also Azerbaijani, Qatari, Ethiopian, Cypriot, Algerian, American and gas from other possible suppliers. Then none of the transit countries will occupy more than 50% of its capacity, and only in this way can be guaranteed competitiveness and energy independence of both Bulgaria and Europe.
We are waiting for the decision of both the Saudi company Arkad and the American company "Solar Turbines Incorporated".
Given all that has been said and done so far about the blocking of the Nord Stream-2 gas pipeline, it makes no sense for the Turkish Stream project through Bulgaria to be implemented in the form in which the Kremlin wants it.
Unless Washington and Brussels have already agreed with Moscow.
But then the question arises of double standards, of the political morality of modern politicians, and of the discrepancy between their words and deeds. This issue will be clarified soon. And everyone to draw the appropriate conclusions.”