Russia Rushes To Seal Ukraine-Bypassing Gas Pipeline: Lavrov Pays Bulgaria A Visit

Putin chess

Russia Rushes To Seal Ukraine-Bypassing Gas Pipeline: Lavrov Pays Bulgaria A Visit (ZeroHedge, July 7, 2014):

As we remarked two weeks ago, when observing the recent developments surrounding the suddenly all-important South Stream gas pipeline bypassing Ukraine entirely, and instead traversing the Black Sea before crossing Bulgaria, Serbia, Hungary and terminating in the Austrian central European gas hub of Baumgarten, we said that all of Europe is suddenly focused on if and how Russia will make headway with a project that may be the most important one for not only Europe’s energy future but the impact Russia will continue to have over Germany et al. And of course, Ukraine. Because should Russia find a way to completely bypass Kiev as a traditional transit hub for Russian gas, it would make the country, and its ongoing civil war, completely irrelevant not only for Russia, but worse, for Europe, the IMF, and Ukraine’s staunch western “supporters and allies” as well.

South Stream Map

Showing just how Europe perceives the Russian “South Stream” threat was a comment from a recent NYT article, in which Günther Oettinger, Europe’s top energy official, was quoted as saying that the Ukraine crisis “has slowed down our progress on South Stream considerably… We can’t just give in to the Russians every time.” Alas, since the Russians control the all important gas, Europe has zero choice.

This explains why even as the western media finally remembered over the weekend there was a Ukraine civil war going on following an advance by the Kiev army to retake some rebel strongholds in the Donbas region, with some wondering what if anything Putin would do in retaliation, what Putin, or rather his envoy Sergei Lavrov were actually doing, was completely ignoring the Ukraine situation (where the West has long since conceded the loss of Crimea to the Kremlin) and instead focusing on securing the successful launch of the South Stream (remember: the second South Stream goes online, Ukraine becomes irrelevant). And since Russia already signed another historic agreement with Austria in June, which positioned the AAA-country (with some surprising emerging bank troubles subsequently) squarely against its fellow European peers, it was the turn of the other South Stream countries, namely Bulgaria.

As Reuters reported, all construction timelines for the South Stream pipeline are on track and the European Union should restart talks about the project, Russian Foreign Minister Sergei Lavrov said on a visit to Bulgaria on Monday.   

Bulgaria has been an enthusiastic supporter of the Russian-backed project, whose construction has stoked tensions between the West and Moscow, especially in the wake of Russia’s annexation of Crimea.

But Prime Minister Plamen Oresharski’s government suspended work last month on its section of the pipeline at the behest of Brussels, pending a ruling on whether the project violates EU law.

Which maybe sheds some light on why in June Bulgaria also experienced the biggest bank run in 17 years, culminating with the nationalization of the 4th largest bank, and also led to the president announcing his early resignation.

So in the Bulgarian power vacuum, the domestic foreign minister Kristian Vigenin said that the “pipeline is of interest to EU, its construction must comply with European laws” during a briefing with his Russian counterpart, Sergei Lavrov. He also said that Bulgaria seeks a quick resumption of South Stream, something which means Europe will have to try harder in its try to prevent a pipeline bypassing its now very substantial Ukraine investment.

Lavrov added that South Stream agreements were signed long ago, before EU adopted unbundling legislation; such laws can’t be retroactively applied. The Russian foreign minister said Russia expects EU to apply single standards to all pipelines.

And since it is not just Bulgaria but Serbia, we also got this:

  • RUSSIA, SERBIA MAY SIGN SOUTH STREAM PACT IN DAYS: MEDVEDEV

And from Itar-Tass:

Gas can run through Kosovo by the South Stream pipeline, according to materials, timed to Serbian Prime Minister Aleksandar Vucic’s visit to Russia.

“An issue is being studied to create a network in Kosovo based on long-term contracts on Russian natural gas supplies,” the materials say.

Two branches are planning to be built – to Serbian Republic and Croatia, the materials say.

At present, Russia’s-led South Stream gas branch is expected to run through Macedonia. The Serbian leadership upheld this idea.

South Stream is Gazprom’s global infrastructure project for the construction of a gas pipeline that will run via the bottom of the Black Sea to the countries of Southern and Central Europe with an aim to diversify routes for exporting natural gas and exclude transit risks. The ground section of the South Stream pipeline will run across Bulgaria, Serbia, Hungary, Slovenia, and Austria. The designed capacity of the pipeline is 63 billion cubic metres. The pipeline is planned to be commissioned in late 2015.

In other words, the great cold war 2.0 fight for Russian sphere of influence in Eastern Europe is on. Because while on one hand we reported that during the weekend, it was none other than France which vocally came out against US Dollar hegemony and thus was forced to gravitate toward the Eurasian (China/Russian) camp, it is the events in Eastern Europe in the next several months that will define European energy geopolitics for the decades to come.

Look for many more fireworks in Bulgaria and the other South Stream countries over the coming weeks as the fate of the South Stream is determined behind the scenes.

 

3 thoughts on “Russia Rushes To Seal Ukraine-Bypassing Gas Pipeline: Lavrov Pays Bulgaria A Visit

  1. This is another excellent example of how history is made by men, not groups of bureaucrats. As usual, the US and Euro leaders are focused on the wrong agenda. Is chess becoming a lost skill?

    Somewhere it is written “the meek shall inherit the earth.”
    I think it was a grave mistranslation. I believe it meant to say “the mindless shall inherit the earth” and it has already happened.

    Pity we don’t have such intelligent leadership here, instead of gaggles of fools and bureaucrats. They haven’t a prayer against Putin. What magnificent pragmatism, such as not existed since the days of Napoleon I.

    Even the EU agreements are beginning to break up because of Putin, AND………should the EU break apart,(Russian gas supplies are essential to them) and they dump the dollar, it will collapse. The Eurozone gains E120,000 a year by trading with Russia…….that is not a small amount. Add in their dependence on Russia for fuel supplies each year; the EU remains the last major player supporting the dollar. Should the US lose the EU, the dollar will collapse completely. Nothing the FED or greedy gut bankers will be able to forestall the result. That is how serious this chess move has become.

    Russia, China, India, Japan, most emerging African, Central and South American nations have all dumped the dollar. Add in Australia, New Zealand and other nations showing real growth……all have dumped the dollar. The EU is essential to keeping the dollar afloat, should member nations stop using it in favor of Russian or Chinese currency…………the US will be finished as a world power. It is no longer if, it is now when.

    The belligerent attitude of the US around the world has cost us more than credibility; it has made unnecessary enemies instead of enhancing friendship. The US is now feared and despised as the world bully. What a fool attitude to show the world, yet that is what the US has shown itself to be. Bullying is a fear based behavior. When you put that up against a true chess player, the outcome will be obvious.

    This is a very serious chess move on Putin’s end, and I don’t think we have a single person in power with enough sense to recognize the portend of what is happening. When EU members start trading using Russian or Chinese currency……..the dollar will collapse.

    The real war over the past four years has been economic, and the US has been losing badly. The only people who seem unaware of this fact are US leaders…..they continue to act as if it were still 1966 & we were a world power and leader. Their behavior seems delusional in light of the truth.

    Nobody will join with Obama over his past 6-8 war endeavors, the dollar is only being kept afloat by the FED who currently keeps the US debt up to date. Right now, the FED carries more than 80% of US debt as foreign investment in the US continues to plummet.

    Reagan’s idea that foreign investment could keep the debt going was good until they offshored everything. Now, the US is a sad shell of its former self, it has been completely plundered since the Coup of 2000.

    Short term thinking might be good for corporate quarterly reports (I guess?), but a disaster for nations. Nations must work from a social, not financial basis. The two do not work well together. The coming collapse of the US economy ought to make that eminently clear.

    Thanks for another great article.

  2. We need leaders who serve the best interests of this nation, not greedy corporations, which is what we have now.
    Time for Americans to look at Putin and compare him realistically to Obama……what a sick joke. Need new congress, throw out the supreme court and get new president and VP. Nothing else will work.
    Can this be done peacefully? I hope so.

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