Bulgaria backs South Stream, unsure on nuclear plant

*New Econ Min backs South Stream gas pipeline project

*Traikov to revise the need, profitability of nuclear project

*Meets RWE officials over Belene nuclear plant this week

By Tsvetelia Ilieva

SOFIA, Aug 3 (Reuters) - Bulgaria will push ahead with the South Stream gas pipeline but has yet to decide whether or not to abandon the Belene nuclear power project, the economy and energy minister said on Monday.

The new centre-right government, which took office last week, has said it needs to revise its commitments on major energy projects as they could worsen the budget situation in the country, hit by the global economic crisis and falling revenues.

Traicho Traikov, who took the post after the centre-right GERB party won July elections, said the European Union member state needs to re-assess the building of a new 2,000 megawatt plant, estimated to cost over 6 billion euros ($8.55 billion).

Traikov, 39, a former executive at the Bulgarian arm of Austrian utility EVN, said the former Socialist-led cabinet has already spent 400 million euros for the Belene project without having a clear vision of the economic benefit and funding.

"We have now to find answers whether Bulgaria needs such generating capacity, how much the produced power should cost to make the project profitable and whether there is a market for power at that price," Traikov told reporters.

Sofia, which owns a 51-percent stake in the project, has contracted Russia's Atomstroiexport to build two 1,000 megawatt units. German utility RWE (RWEG.DE) keeps the remaining 49 percent in Belene. The financing has not been structured.

Traikov said that he and Prime Minister Boiko Borisov would meet with RWE officials later this week and discuss how to proceed with the Belene project.

GERB's deputies have already suggested that that Bulgaria must find private investors for its majority stake or abandon the project [nLU505619].

The new government has said Bulgaria cannot afford to take loans, at a time of tight global liquidity and economic downturn, to fund its majority stake when it is under pressure to cut public spending and avoid slipping into deficit.

The crisis however will not force Bulgaria to reconsider its participation in the Russian-backed South Stream project due to bypass transit country Ukraine and deliver gas to south-eastern Europe under the Black Sea for now.

The Gazprom-led (GAZP.MM) 10-billion-euro project is seen by analysts as a rival to the European Union-backed Nabucco pipeline, intended to cut Europe's energy dependence on Russia.

Bulgaria has signed a broader agreement with Russia over South Stream but is yet to overcome some disagreements about the route and the ownership of the new pipeline on its territory. [ID:nLE210079]

Traikov said the Nabucco pipeline had a signed intergovernmental agreement of all participants and a clear financial model, while South Stream still faced problems with the launch of a feasibility study, but that the Sofia will keep its participation on both projects.

"We will continue the work on both projects and we will analyse the result at every step," Traikov said.

For data on Russia's South Stream natural gas pipeline click on [nLF362831]

(Reporting by Tsvetelia Ilieva, Editing by Peter Blackburn)