Bulgaria and Russia sealed on Saturday an accord to set up a joint venture, which will build and operate the Bulgarian section of the South Stream gas pipeline. The announcement came at a press conference of Bulgarian Prime Minister Boiko Borisov and Russian counterpart Vladimir Putin, who was on a working visit to Sofia.

The agreement on the JV creation, which will be managed on an equal-equity, was signed by Bulgarian Energy Holding executive director Maya Hristova and Gazprom CEO Alexei Miller. The new business is expected to be registered by the end of November 2010.

The parties also struck an accord on the implementation of a social security agreement, which was backed by the signatures of Bulgaria's Labour Minister Totyo Mladenov and Russia's deputy Minister of Health and Social Development Yuri Voronin. "The trade and economic cooperation between Bulgaria and Russia is developing successfully", Putin said. "I want to emphasise the great importance of the South Stream pipeline, which has an European significance," he added.

The price of the Belene nuclear plant project and the awaited reduction of natural gas prices, however, remained unspecified during the discussions between the premiers. Later that day, Economy Minister Traicho Traichkov told state-run broadcaster BNT that Russia had offered a price of EUR 6.3 billion for the Belene nuclear plant, which was considered not acceptable for Bulgaria. South Stream has nothing to do with the gas price for Bulgaria, Putin noted, saying that the purpose of the project is to ensure constant gas deliveries to Bulgaria and southern Europe.

Meanwhile, Russian media wrote that Gazprom had formulated a package price offer for Bulgaria, which stipulates a reduction of 5% to 7% in gas costs by end-2012. Putin and Borisov declined to give concrete answers on the Belene project's final price, the potential shareholders and the launch of its construction. The technical design of the nuke plant will be cleared by the end of the year, Putin also said, voicing Russia's eagerness to back the project's implementation with credit lines.