Gazprom and Bulgaria are set to sign an agreement on a joint venture that will clear the way for the construction of the South Stream gas pipeline across the southeast European state, the Russian energy giant said on Tuesday.
Russia signed an intergovernmental agreement on the South Stream gas project with the Socialist-led Bulgarian government in January 2008.
In May 2009, Russia's Gazprom and state-run Bulgarian Energy Holding (BEH) agreed to set up a joint venture on a parity basis to build the Bulgarian section of the South Stream pipeline by mid-2010.
However, the country's new government, which came to power in the summer of 2009, announced its plans to review the deal and diversify gas suppliers following a dispute between Gazprom and Ukraine in January 2009 over unpaid bills and gas prices that left most European countries without gas deliveries for two weeks in freezing temperatures.
Following the talks, held with Gazprom in late 2009, the new Bulgarian government announced its support for the project, intended to reduce the dependence of European consumers on gas transit countries.
Gazprom said in a statement that during a working visit by Gazprom CEO Alexei Miller to Bulgaria on Tuesday and his meeting with Bulgarian President Georgi Parvanov and Prime Minister Boyko Borisov, the parties discussed the pre-investment stage of the project.
"The preparation of a feasibility study for the Bulgarian part of the gas pipeline and the creation of a joint project company between Gazprom and the Bulgarian Energy Holding were named as top priority measures," the statement said.
The South Stream project, designed to annually pump 31 billion cubic meters of Central Asian and Russian gas to the Balkans and on to other European countries, involves Bulgaria, Serbia, Hungary, Italy and Greece.
The pipeline's capacity could be eventually increased to 63 billion cubic meters annually.
The gas pipeline is expected to start operating in late 2015. The project is part of Russia's efforts to cut dependence on transit nations. It is a rival project to the EU-backed Nabucco, which would bypass Russia.
MOSCOW, February 16 (RIA Novosti)
