SOFIA Aug 19 The company planning to build a
section of the controversial South Stream natural gas pipeline
in Bulgaria has raised capital, defying an order to halt
preparations for the project, the economy ministry said on
Mindful of European Commission concerns about the Russia-led
project, authorities in EU member Bulgaria this month ordered
preparations be halted until the plans are shown to comply with
Yet the South Stream Bulgaria joint venture has proceeded to
raise its capital to 397.6 million levs ($270.86 million) from
15.588 million, the interim economy ministry said in a
"This move ...constitutes a violation of a protocol decision
by (Interim Economy Minister) Vasil Shtonov dated Aug. 11 to
suspend all actions on the project," it said.
South Stream would carry Russian gas across the Black Sea to
Bulgaria and onward, bypassing Ukraine.
Brussels and Moscow have clashed over the crisis in Ukraine
including Russia's annexation of Crimea.
In energy the European Commission and Moscow have also
disagreed over EU rules calling for gas suppliers to ensure
third-party access to related pipelines.
South Stream Bulgaria is an equal joint venture between
state-owned Bulgarian Energy Holding (BEH) and Russian gas
The ministry said BEH's actions were not in Bulgaria's best
interests, adding it would refer the case to prosecutors.
It said while the capital hike did not constitute the launch
of construction, it did allow for the continuation of
Bulgarian President Rosen Plevneliev, who named an interim
government two weeks ago, said the project would remain on hold
pending approval from the EU.
A document came to light this month showing Bulgaria's
previous government issued a construction permit for the
pipeline despite earlier announcing a freeze.
The capital increase was entered into the commercial
register on Monday, the same day Economy Minister Shtonov said
BEH had opted out of it.
Shtonov said he had instructed BEH to discontinue all
tendering and contracting procedures.
BEH issued a statement saying it had taken all necessary
actions to halt activities related to the South Stream project.
It said such activities would remain on hold until all
issues related to the awarding of a contract to design and build
the Bulgarian section of the pipeline had been clarified.
(1 US dollar = 1.4679 Bulgarian lev)
(Reporting by Angel Krasimirov; editing by Jason Neely)