Russian Companies Subcontracted for Bulgarian Section of Turk Stream to Expedite Its Completion

On August 7, local media reported that three Russian companies had been hired as subcontractors in order to expedite construction of the Bulgarian section of Gazprom’s Turk Stream natural gas pipeline. The companies, which have previously been involved in other European sections of the project (the Serbian and Turkish sections of the pipeline), were subcontracted in March and April by the Saudi company Arkad.  Arkad is the main contractor for the Bulgarian section of the pipeline, known locally as Balkan Stream, which is reportedly on track to be completed by the end of 2020.

The three Russian subcontractors are:

  • Infrastructure Development, and Construction — Belgrade (Gazprom-owned);
  • Speccompconstruction – Magistral (SPK-Magistral, LLC); and
  • Zakpromneftegaztroy-Prometey

Although no additional context was immediately apparent for why or how the selection of Russian companies (amidst several others from other countries) would accelerate the project’s timeframe, the threat of sanctions or other regulatory hurdles to Russian energy projects (similar to that which has affected Nord Stream 2) has been a persistent concern for Moscow and its European energy partners.  Like Nord Stream 2, Turk Stream raises significant energy and regional security concerns, increasing Russian dominance over the European gas market, while also providing Moscow with a supply line to the continent that circumvents Ukraine.

Part of the risk quotient that is implicated by large-scale Russian economic activity of this kind is also the overall influence and downstream effect of Russia’s style of corporate governance, norms and behaviors on the countries where they are operating.  Once operational, the European leg of the Turk Stream pipeline will transport an annual 15 bcm of natural gas to southeastern Europe, traversing Bulgaria, Serbia and Hungary.  The first offshore leg of the project to Turkey was inaugurated in January 2020.