Against all expectations, Bulgaria has emerged as a key player in the battle for control of the Southern Energy Corridor. This Black Sea country is astride the most logical route between the gas fields and European markets for both South Stream and TANAP. Bulgaria has agreed to cooperate with both consortiums, while playing for maximum advantage.
In August 2012, Bulgaria and Gazprom announced they would conclude an investment contract in November for the construction of South Stream. Simultaneously, Bulgarian Minister of Energy and Economy Delyan Dobrev announced a new gas-supply contract that featured an 11% price in gas for the remainder of 2012.
Once having achieved its goal of obtaining Bulgarian cooperation, however, the Russians appear to have upped the ante. For construction of South Stream to begin, the Russians declared they wanted $1.3 billion in compensation for the Belene nuclear plant. This was a project that the former Bulgarian government had contracted with Russia, but that current Prime Minister Boiko Borisov cancelled when he took office last year. Borisov was outraged. "We are observing all our commitments on South Stream. For Belene we continue to negotiate...That is why I think we have been absolutely treacherously surprised by that claim." Bulgarian observers pushed back, threatening that the government would be forced to cancel South Stream. Ilian Vassilev of Innovative Energy Solutions said, "There is no way Bulgaria can pay both the claim and let South Stream happen."
The dispute has led to a delay in a visit by Russian President Vladimir Putin, who was supposed to be present in Sofia on November 9 for the signing of the South Stream papers. Instead, Putin has postponed his trip until December, possibly signalling his unhappiness with Bulgaria's recalcitrance.
Meanwhile, in September 2012 the European Union criticized Bulgaria for supporting South Stream while lacking sufficient commitment to the EU's version of a Southern Energy Corridor. The EU's concern was that South Stream only diversifies supply routes from Russia, but does not diversify the ultimate, Russian source of supply. "Bulgaria needs to complete the ongoing investment projects on gas interconnectors with Romania, Serbia and Greece, and make reverse flows possible on its interconnector with Turkey...Bulgaria also needs to play a more proactive part in opening up the Southern Gas Corridor, which has the potential to diversify supply sources," said a leaked document.
The Bulgarian Prime Minister was non-plussed. In an interview with Euronews, Borisov said he was commited to the European vision. "It is very important that the Turkish Tanap-pipeline reaches Bulgaria and that Nabucco-West and the South East Europe Pipeline move closer to Europe...Regarding the Nabucco project, Bulgaria has done all it can: the parliament approved its construction. We have signed all the documents that are required and we can start construction work tomorrow if necessary. I am looking forward to the launch of the Nabucco project."
Despite any agreement with Nabucco, however, as of 30 September 2012 there was no agreement between Bulgartransgaz and Turkey's Botas to connect with the Turkish pipeline network. Without such a connection, any discussion of Tanap or Nabucco is moot. To give the country some negotiating room, Bularia delayed its plans one year to connect its gas network with neighboring Balkan countries. Bulgartransgaz announced the connection would take place in 2014, instead of the originally-planned 2013.