Alternatives & Analyses: Turk – Balkan – Borisov Stream – metamorphoses

“You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”

Abraham Lincoln

The Bulgarian Prime Minister Boyko Borissov resorted to changing informally the name of the Bulgarian segment of TurkStream in an apparent attempt to spare the project U.S. sanctions.

As of today, the Bulgarian media are instructed not to use the term “Balkan Stream”, which until recently was Borisov’s policy brand. The official propaganda alleged that while TurkStream traverses Turkey and Serbia, the Bulgarian segment radically differs.

U.S. Secretary of State Mike Pompeo sent a simple message last week – companies that build, finance or provide services, equipment, parts or other goods for Balkan Stream are subject to U.S. sanctions. This freezing reminder from Washington prompted Borissov’s return to the original narrative, namely that Bulgartransgaz is not in the “streams’ business – the company rehabilitates and modernizes Bulgaria’s gas transmission network.

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The problem with this interpretation is that a project called “Rehabilitation, modernization, and expansion of the existing gas transmission system” already exists. A name swap opens a new Pandora’s box. The Rehab Project is recognized as common interest for the European Union, while Balkan Stream is not. On top of it all, the Rehab project’s content is entirely different; it is part of the transmission system, while the Balkan Stream deals with gas transit for a single client from the entry point on Malkoclar-Strandja to a specific exit point on the Serbian border.

The EC explicitly removed the Balkan Stream project from the EU PCI list. The Commission stated in very clear terms that the Bulgarian government is implementing it at its own risk, without any guarantee for its operation under the current regime. Worth noting is that the U.S. Congress’ latest round of sanctions targets companies that provide testing, certification, and inspection services of gas pipelines, which spells a gloomy future for Balkan Stream even if the GoB persists in building the project.

Neither the EU nor the US government has any problem figuring out the skin-deep motives behind these moves.

Bulgartransgaz is unlikely to receive the requested EUR 400 million loans needed to complete the project. 

Gazprom is unlikely to be able to continue behind the scenes direct funding to the Saudi Arkad Company. 

Nor will the U.S. Solar Turbines be able to deliver the gas turbines for the two compressor stations of Balkan Stream.

The extension of Turk Stream via Bulgaria would cost Bulgartransgaz nearly EUR1.5 billion, a different order of cost to the Rehab project, which requires below  EUR100 million.

The reckless maneuver with the label change of “Balkan” Stream with a more innocuous one – rehab&expansion of the transmission network, may inflict severe damage to Bulgaria’s EU PCI project. 

The Rehab&Modernization and Expansion project includes the following subprojects:

  • Modernization and rehabilitation of compressor stations – three compressor stations that have nothing in common with the Balkan Stream ones.
  • Repair and replacement of the gas transmission pipeline sections – several parts of the existing gas ring- nothing to do with Balkan Stream.
  • Expansion and modernization of the existing transmission network; expand access to new users.
  • Inspections to establish and characterize the state of gas transmission pipelines;
  • Implementation of systems to optimize the process of managing technical aspects of the network.

The Balkan Stream as a transit project is insulated from the internal transmission network and interconnectors. As part of the TurkStream project, its capacities have been pre-leased for the next 20 years and provide Gazprom with a monopoly over gas transit through Bulgaria to Serbia. Neither Borissov nor the head of BTG can challenge these facts.

PM Borissov is desperate to remain in power and secure the completion of “Balkan Stream” by March 2021. Personal commitments made to President Putin help explain his reluctance to resign, despite the protests in Bulgaria. unprecedented in this century.

The Bulgarian PM faces the unenviable fate of a hostag to Kremlin’s interests, who hopes that he can fool all people all the time – the public, our allies in the EU and NATO and his clients in Russia.

Ilian Vassilev

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