Gazprom To Claw Back $70 Mln if Bulgaria Fails To Make Final Decision on South Stream by Nov 15

Gazprom To Claw Back $70 Mln if Bulgaria Fails To Make Final Decision on South Stream by Nov 15

Russia's Gazprom will claw back $70 million (55.1 million euro) if the Bulgarian Energy Holding fails to adopt the final investment decision for the construction of the South Stream gas pipeline by November 15, the government in Sofia said.

The sum represents the discount on the price of Russian gas deliveries which Gazprom granted Bulgaria earlier this year, according to the minutes of the government's weekly meeting released on Thursday.

The government said on Wednesday that state-owned BEH will adopt the decision provided that the new gas supply deal with Gazprom, set to run from 2013, is deemed satisfactory in terms of the issues considered critical by the Bulgarian company.

In August, Bulgaria and Russia signed a protocol on an 11% markdown for Gazprom gas deliveries until the end of the year taking effect retroactively from April. The two countries also agreed to sign a new gas supplies contract by November 15 and that Sofia will take a final investment decision on the South Stream project.

South Stream, a project initiated by Gazprom and Italy's Eni, is expected to carry 63 billion cubic metres of Russian natural gas per year under the Black Sea to Europe, starting in 2015. Slovenia, Bulgaria, Serbia, Croatia, Hungary and Greece are partners in the onshore section of the pipeline. The Bulgarian section will be approximately 540 kilometres long with three compressor stations and a technical annual capacity of 63 billion cubic metres.


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