The key to the project is Bulgaria: both the pipeline's landfall and the location of the split. Bulgaria's Minister of Transport, Daniel Papazov, confirmed the project was a top priority of the government, and that everything was ready to begin construction. "This project will be implemented very soon," he said. According to a Gazprom spokesman, the company is ready to begin construction in Bulgaria by the end of 2013, with the first phase completed by 2015. Such planning is ambitious, as the project is already behind schedule. Gazprom CEO Miller said, "The project has been implemented with certain delays from schedule...We are however certain that the deadlines for the start of construction will be met." Bulgarian Minister of Economy and Energy confirmed Miller's statement: "We will speed up work on South Stream as it is important to diversity our natural gas delivery routes and have direct deliveries from Russia without passing via third countries. We need to have final detailed site development plan, environmental impact assessment and front end engineering design by the end of this year and apply for construction permit."
According to Deputy Head of Project Management Alexander Syromyatin, the need for South Stream continues. "South Stream is an answer to the increased demand in natural gas and will enable diversification of the Russian gas supply routes to the EU, decrease transit risks, guarantee stable gas supplies to Central and southern Europe and help improve the environment," he said.
The project has the support of the overwhelming majority of Bulgarians. According to a survey conducted by World Thinks, 68% of Bulgarians support the project. "Very few feel opposed or strongly opposed," said company director Ben Shimshon. "Only 5% felt negative about it and the remainder were either unsure or undecided on how they feel." Shimshon said the public supported the project primarily for the jobs it would create, with good gas prices in second place. "The public are much more clear," he said, "that there will be economic benefits: 61% of people agree that Bulgaria will benefit economically from the pipeline."
One reason support may be so high is that the project will not cost the Bulgarian taxpayer any money. Gazprom CEO Miller confirmed that Russia was prepared to fully finance the construction of the Bulgarian section. Russia would lend Bulgaria 3.1 billion euros (approximately 5 billion dollars) to be repaid with transit and gas transportation fees. Bulgarian Economics Minister Dragomir Stoynev confirmed "The South Stream will be financed on a project principle--there will be no money of the Bulgarian taxpayers to be spent."
Not everyone agrees that the pipeline should go through Bulgaria, however. Julian Lee, a senior energy analyst at the Center for Global Energy Studies in London, claims that Bulgaria does not need South Stream. "Bulgaria will still have access to gas from Azerbaijan via TAP and the Interconnector Greece-Bulgaria," he said. Lee is joined by the citizens of Varna, the city where the pipeline will land. The townspeople are concerned about noise and air pollution from both the construction and the operation of the pipeline and compressor station, to be built less than one mile from the city's southern suburbs. The entry point is supposed to be the Pasha Dere Beach, which is a protected area under the EU's Natura 2000 program. However, the project's environmental impact statement lists a number of advantages for Varna, including 2500 new jobs, profits of 30 million euros for the port, and a local business boom with profits for all.(The job creation figure is suspect, since South Stream Bulgaria's CEO Georgi Gegov claims the construction phase will create 2500 jobs in the entire country, not just in Varna. Once it is built, South Stream Bulgaria will need an addition 3500 jobs to service and supply the pipeline.
Russia also plans a branch of the pipeline to go to Macedonia. Russian Prime Minister Dmitry Medvedev ordered the Russian energy and foreign affairs ministries to begin discussions with Macedonia for a feasibility study. Assuming this study shows the viability of the spur, the two countries would establish a 50/50 joint venture to complete the project, although Russia would retain the right to use the pipeline's full capacity, according to a Russian draft agreement that was signed by both countries on July 23.
Serbia is also excited (73% public approval rating) about the pipeline. Serbian Prime Minister Ivica Dacic said, "South Stream is the most important international project that Serbia is currently involved in and will be key to the country's economic development, ensuring job creation, and energy security for the region...Our objective is to ensure energy sector supply and develop our partnership with Russia." The Serbian Minister of Energy predicted the pipeline would create at least 1,000 new jobs.
What is clear is that, with Central Europe mired in a recession, the lure of jobs is stronger than the fear of dependence on a Russian monopoly for energy supplies.
