Bulgaria and Russia sign energy deal

Associated Press
Russian Prime Minister Vladimir Putin, left, looks on as Bulgarian Prime Minister Boiko Borisov, right, speaks during a news conference after signing an agreement that will advance a pipeline project aimed at bringing Russian natural gas to central Europe and Italy, in Sofia, Saturday, Nov. 13, 2010. (AP Photo/Valentina Petrova)
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Bulgaria and Russia signed an agreement Saturday that will advance a pipeline project aimed at bringing Russian natural gas to Europe, bypassing Ukraine.

The deal, signed during Russian Prime Minister Vladimir Putin's visit to Sofia, envisages the creation of a joint company to build and operate the euro25 billion ($34 billion) Bulgarian stretch of the South Stream pipeline.

The pipeline, scheduled to be operative in 2015, aims to transport up to 63 billion cubic meters (2.2 trillion cubic feet) of Russian natural gas a year under the Black Sea to Bulgaria and other European countries.

Putin's visit to Bulgaria to attend the signing of a deal that formally gives the go-ahead to this pipeline project underscores the importance that Moscow attaches to South Stream as a tool to expand its grip on Europe's energy market.

South Stream rivals the planned U.S. and EU-backed Nabucco pipeline, which aims to bring to Europe gas from the Caspian Sea region and the Middle East via Turkey and Bulgaria, and reduce Europe's reliance on Russian fuel. Bulgaria has said the two projects will be complementary.

Putin tried to brush off concerns about his country's increasing influence, saying after the signing ceremony that the pipeline would have a "huge significance" and "Europe-wide importance."

Bypassing Ukraine, the country through which most Russian gas to Europe currently travels, will "reduce all transit risks to zero," Putin said.

He also said that Bulgaria would increase fourfold its revenues from transiting Russian gas. The Balkan country currently transits 17 billion cubic meters (600 billion cubic feet) of gas annually to its neighbors.

"If we implement the South Stream project, Bulgaria will receive almost euro2.5 billion for just having the pipeline on its land," Putin said

Around 100 people demonstrated in the capital against the deal, saying it would make Bulgaria completely dependent on Russian oil, gas and nuclear power. They carried posters reading "Putin's Bulgaria" and "He will enslave us." No violent incidents were reported during the protest, which was closely monitored by police.

The deal has also drawn the fire of a party that backs Prime Minister Boiko Borisov's minority Cabinet in Parliament. On Saturday, the conservative party of former Prime Minister Ivan Kostov urged the government "to resist Putin's pressure and to not allow Moscow to impose its interests" on Bulgaria. Otherwise, it said, it would withdraw its support in parliament.

Bulgarians are especially wary of any signs that Russia is seeking to increase its influence in their country, a former Soviet satellite that is now an EU member.

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Associated Press writer David Nowak in Moscow contributed to this report.

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