South Stream Signed After Night Out

24 ChasaFrom left, Lyube's frontman Rastorguyev, Medvedev, Pirinsky, Kobzon, and Presidents Putin and Parvanov visiting the Sinatra piano bar in Sofia late last week.
SOFIA, Bulgaria -- President Vladimir Putin on Friday won Bulgaria's support for a multibillion-dollar pipeline aimed at further strengthening Moscow's hold on Europe's energy market.

The outcome of negotiations over South Stream had been unclear until the last minute and might have been influenced by informal talks at a piano bar where Bulgarian President Georgi Parvanov took Putin for a night out.

South Stream and seven other deals crowned Putin's two-day visit to Sofia, designed to cement Bulgaria's status as one of Russia's few allies in Eastern Europe.

"Bulgaria has unconditionally become a key link in the European energy chain when it comes to implementing energy projects," Putin said at a news conference after the signing ceremony Friday.

South Stream, worth 10 billion euros ($14.6 billion), will take 30 billion cubic meters of gas per year under the Black Sea and resurface in Bulgaria before going deeper into central and southern Europe. The project involves Gazprom and Italy's Eni, whose top executives, Dmitry Medvedev and Paolo Scaroni, attended the ceremony.

The agreement was struck after Putin and Parvanov met for informal talks at a trendy piano bar in the Bulgarian capital late Thursday night.

The leaders discussed South Stream, among other things, a Kremlin spokesman said, adding that the presidents had left it up to their governments to decide on the deal.

Parvanov took Putin to Sinatra, which is said to be one of the Bulgarian leader's favorite bars, after the two kicked off the Year of Russia in Bulgaria at the Palace of Culture. The presidents arrived at Sinatra at around 11 p.m., and Medvedev and Bulgarian Prime Minister Sergei Stanishev dropped in later, bar staff said.

Located on the ground floor of a nondescript street in central Sofia, the bar features red walls adorned with portraits of American crooner Frank Sinatra. The presidents were accompanied by Bulgaria's parliamentary speaker, Georgi Pirinsky, singer and State Duma Deputy Iosif Kobzon and Nikolai Rastorguyev, frontman of the rock band Lyube, who is believed to be one of Putin's favorite singers.

Rastorguyev sang several songs for the presidents, who sat next to each other and spoke together, said Georgi Georgiev, a reporter with the local newspaper 24 Chasa, who was present in the bar Thursday night.

Putin drank only water and left around 12:30 a.m., while Parvanov drank wine and stayed until 2, said Dimitr Dimitrov, a bar manager.

Early Friday, officials said Russian and Bulgarian authorities had agreed on the South Stream deal and would sign the agreements later in the day. Kommersant, citing Deputy Industry and Energy Minister Anatoly Yanovsky, reported Saturday that the talks only finished at 5 a.m., just hours before Putin and Parvanov signed a series of bilateral agreements. Industry and Energy Minister Viktor Khristenko said the final version of the agreement was prepared just 15 minutes before the signing, the report said. Minutes before the ceremony, Khristenko and other officials could be seen whispering in a possible attempt to clarify details as they stood just meters from both presidents.

Putin and Parvanov praised the pipeline as a way to ensure energy security in the region, downplaying concerns that it would be a rival to the European-backed Nabucco pipeline and might undermine Europe's drive to diversify its energy supplies.

In a passionate speech Thursday evening, Parvanov defended Bulgaria's right as an EU member to cooperate with Russia. "Bulgaria has always suffered from its strategic location, and the time has come to reap the benefits from our geographic position," he told a packed audience at the Palace of Culture.

When a Bulgarian reporter suggested at Friday's news conference that South Stream might get stuck in Bulgarian territory if it did not find enough support in Europe, Putin said European countries were fighting to join Russian gas pipeline projects. "We don't have to convince anybody," he said. "They ask us for [gas] every day, especially during the fall and winter."

Some European countries have voiced concern about the stability of supplies after Gazprom briefly cut gas to Ukraine in 2006, disrupting the flow to the rest of Europe.

Gazprom CEO Alexei Miller told reporters that Sofia would own 50 percent of the pipeline on its territory. The project's ownership structure is believed to have been a major stumbling block in negotiations.

Miller said Gazprom and Eni would set up a 50-50 joint venture to carry out a feasibility study, to be completed by year's end. The pipeline itself could open in 2013, he said. He declined to talk about costs or proposed routes, saying the feasibility study had to be completed first.

Eni sought to downplay concern that South Stream and Nabucco would be rivals, saying gas supplies to Europe would need to double in the coming years. "This has been a very important step to increase stability," Scaroni said of the deal.

Among the other deals signed Friday:

• Russia and Bulgaria will set up a company to carry out a feasibility study for the Burgas-Alexandroupolis pipeline. Last year, the two countries together with Greece agreed to build the 285-kilometer pipeline from Burgas, on Bulgaria's Black Sea coast, to Alexandroupolis, on the Greek Aegean.

• Russia will build a 4 billion euro nuclear station in Belene. Putin told reporters that Russia was ready to offer Bulgaria a multibillion-dollar loan to help cover the costs, if necessary. The first energy block is expected to open in 2014, and construction will start this year, said Sergei Kiriyenko, head of Rosatom, the state nuclear corporation.

• A railroad and ferry link will be built between Port Kavkaz and the Bulgarian port of Varna to cut costs of shipping goods.

Parvanov and Putin said the countries needed to expand trade, and the Bulgarian president added that joint technology projects could help cement the place of Cyrillic on the Internet. Bulgaria and Russia both use the Cyrillic alphabet.

Parvanov praised the results of Putin's trip, saying he could not remember a time when so many deals had been signed during a single presidential visit.

The visit was also notable because it was the first foreign trip by the soft-spoken Medvedev after Putin named him his preferred successor last month.

Putin noted that Medvedev, who in addition to holding the post of Gazprom chairman is a first deputy prime minister, was part of the delegation because of the energy talks. But the trip also gave him a chance to try his hand in high-stakes negotiations and to shine in the spotlight of cameras.

Medvedev did not address the media but at one point during the signing ceremony moved close to Putin. The cameras immediately started clicking. Both men broke into smiles, and Medvedev visibly blushed.

The Russian and Bulgarian presidents played up historical ties between their countries, focusing on the distant events of the 19th century, when Russia helped liberate Bulgaria from the Ottoman Empire rather than on more recent, Soviet-era history, when Bulgaria was in the Soviet Union's orbit of influence.

Putin returned to Russia on Friday. The night before, the staff at the Sinatra piano bar asked him to leave his signature on the bar's red wall as guests often do. He chose not to, the staff said.

But his presence will linger in Sofia for a while anyway, and not only because of the energy deals. After Putin's departure, a mixture of posters remained on buildings in central Sofia, some welcoming him and others calling on him to go home.

A local greeting card company is even trying to promote itself with the visit. The company, Fame Cards, has distributed free postcards in Sofia's bars and restaurants that feature a bare-chested Putin fishing during a trip to Tuva last year. The card reads: "Good luck to all fishermen in Bulgaria."