Pipeline Issues "Not Insurmountable," says Juncker

BRUSSELS--The leaders of Bulgaria and the European Commission made a vocal bid Thursday for the continued construction of a pipeline transporting Russian gas to southeastern Europe, despite an announcement by Moscow that the project had been dropped.

Jean-Claude Juncker, the president of the European Union's executive arm, said issues related to the South Stream project "are not insurmountable."

"South Stream can be built. The conditions have been known for some time, " he added, following a meeting with Bulgarian Prime Minister Boyko Borisov.

The meeting came after Russian President Vladimir Putin said earlier this week that Moscow would abandon South Steam, because it couldn't reach agreement on the terms of the project with Bulgaria and the EU.

The European Commission has said it would block any deal on South Stream that would leave control over both the pipeline and its capacity in the hands of Russian state-owned energy company OAO Gazprom.

Mr. Borisov said he hadn't received official notification on the termination of South Stream and that he believed Russian plans for an alternative pipeline through Turkey were "premature."

"There are a lot of people against the suspension of this project," Mr. Borisov said, pointing to significant costs Bulgaria and others have already incurred.

Mr. Borisov said solutions for bringing South Stream in line with EU law could be found as early as next week, at a meeting between the energy ministers of the EU countries involved in the project.

However, both Messrs. Borisov and Juncker stressed that any deal had to be in line with EU rules, which require pipelines to also be open for gas from suppliers other than their owners to improve competition. The Russians "also have to think and revise their attitude" to the European rules, Mr. Borisov said.

Countries in the EU's southeast are keen on developing a gas-supply route that bypasses Ukraine, after experiencing severe shortages following earlier disputes between Kiev and Moscow. South Stream was supposed to transport gas underneath the Black Sea to Bulgaria, from where it could be shipped to other EU countries relying on Russian energy.

But Mr. Juncker warned Russia that the EU and its members wouldn't let their dependence on Russian gas push them to abandon their own principles. "I'm not accepting the simple and easy idea that Bulgaria can be blackmailed as far as these energy relations are concerned," he said.

Relations between Brussels and Moscow are at a low, with each side restricting trade and travel over the conflict in Ukraine. At the same time, the EU is working to cut its overall dependence on Russian energy and has sped up the constructing of pipelines connecting different parts of the continent as well as the buildup of alternative sources.

Write to Gabriele Steinhauser at [e-mail]

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