* Timchenko on list of U.S. sanctions over Ukraine
* Contract valued at 3.5 billion euros
* Announcement of contract award postponed until next week
By Svetlana Burmistrova and Tsvetelia Tsolova
MOSCOW/SOFIA, March 21 A consortium led by
Russia's Stroitransgaz, owned by sanctions-hit businessman
Gennady Timchenko, is set to win a 3.5 billion euro ($4.82
billion) deal to build a section of the South Stream natural gas
pipeline across Bulgaria, industry sources said on Friday.
Expected to start deliveries in late 2015, South Stream will
carry Russian gas across the Black Sea and bypass Ukraine with
which there have been gas rows in the past that have disrupted
supply to the European Union.
Timchenko owns 63 percent in Stroitransgaz Group via his
Volga Group. On Thursday he was included in a list of Russian
officials and businessmen targeted by U.S. sanctions over
"The Stroitransgaz-led consortium has been picked to build
the Bulgarian part of the pipeline," a source familiar with the
deal in Bulgaria said.
Some 11 companies bid for the work, Bulgarian Energy Holding
(BEH) has said, without naming the bidders.
The fate of South Stream was questioned on Thursday by the
chief executive of Italian energy company Eni, a
stakeholder in the project. He called its future "gloomy" due to
Russia's actions in Ukraine.
The 2,400 km (1,500-mile) pipeline, led by Russia's Gazprom
, is expected to be fully operational by 2018 at an
estimated cost of around 17 billion euros ($23.4 billion).
BEH, Stroitransgaz, Gazprom and the South Stream venture in
Bulgaria declined immediate comment.
"It is not possible to say a contractor is chosen until the
project company announces its decision publicly," Bulgarian
Energy Minister Dragomir Stoynev told reporters.
Along with Gazprom and Eni, the project's other shareholders
are France's EDF and Germany's Wintershall.
Sources had previously said that the announcement of the
contract award to a Stroitransgaz-led consortium was expected on
Friday by Gazprom and BEH. But a source in Gazprom said that it
was postponed until next week.
"I do not know why this information is not yet public. It
may be because of political reasons," the source in Bulgaria
Stroitransgaz works closely with Russian natural gas
exporter Gazprom. It was also involved in construction of
Russia's East Siberia-Pacific Ocean oil pipeline which was built
to increase Russian oil exports to Asia.
($1 = 0.7255 euros)
(Reporting by Svetlana Burmistrova in Moscow, Angel Krasimirov
and Tsvetelia Tsolova in Sofia; writing by Vladimir Soldatkin,
editing by Jason Bush and Jason Neely)