Gas meeting agrees on guarantees and supply diversity

A 2 day meeting in Sofia, Bulgaria, has seen gas producers and European consumers agree to diversify supply routes and guarantee deliveries. Russian Energy Minister, Sergey Shmatko, spoke about Russia’s position.

“During the Forum there has been a lot of discussion about the South Stream pipeline. The realization of the South Stream project is aimed at meeting the current and growing demand for Russian gas in Europe. We are not seeing any drop in interest for Russian gas.

I think, in the time of a crisis, South Stream can make it significantly cheaper, because the companies involved in the project are ready to cut expenses.

It is well known that the economic crisis has been caused by companies’ inability to sell their produce, as the purchasing abilities of consumers have declined across the world. So there is no drop in interest in Russian gas, and therefore, the economic foundation for the project is solid.

Whereas the financial crisis is temporary, the South Stream is aimed to serve for the long term.

In order to behave responsibly we must focus on the permanent and lasting, rather than the temporary. The crisis will soon end, and we must be ready for that. So we are not letting the crisis affect the attractiveness of this project.

According to the plan, the South Stream will be finished by 2015. We have signed agreements with almost every country involved. And I think we will make inroads in the upcoming month in finalizing talks with Austria and Slovenia.

The main question mark is currently surrounding relations with Bulgaria. I have met with the Bulgarian Energy Minister and the Prime Minister. During these talks I had no reason to think that any changes will be made to our preliminary intergovernmental agreements signed last year.

Those agreements are in their final stage of corporate talks with Gazprom on the Russian side and the Bulgarian Energy Holding.

As for the filling of the pipeline, negotiations are in progress with our long time Azerbaijan partners. The Azeri government is very sober and pragmatic in their attitude.

At the same time, we remain very sceptical about the Nabucco project. We believe that some key questions need to be addressed before the viability of the project can be discussed.

Firstly, what is its long term resource base? Secondly, we need to consider expenditure on building, developing and maintaining the needed infrastructure. And finally, a political decision on the status of the Caspian Sea is required. No substantial talks on the issue may take place before these questions are addressed and resolved.

The talks we have had here in Bulgaria have been useful. The organizing party succeeded in creating conditions for constructive talks. Those who had concerns and worries were able to express them. Except for the Georgian President’s commentary, the speeches were balanced and thought-through.

And to reiterate, the overwhelming majority have expressed their support for the South Stream project.”