Residents of Bulgaria would be well-advised to stock up on electric heaters. In an unsurprising turn of events, Economy Minister Petar Dimitrov, having spent a week denying any risk of further gas shortages next winter, said on February 24 that Bulgaria could indeed have insufficient supplies.

Ivo Prokopiev, chairperson of the Confederation of Employers and Industrialists in Bulgaria, who first raised the issue, said that a repeat of the gas pricing dispute between Russia and Ukraine was not as unlikely as Bulgarian authorities thought. With prices of commodities, which make up most of Ukraine’s exports, still on the decline, Ukraine could find it hard to pay the amounts it agreed to in January, Prokopiev said on February 18.

But even without another standoff between Moscow and Kiev, the rapid growth of consumption meant that the amounts delivered by Gazprom were no longer enough, Dimitrov told an energy forum, as quoted by Dnevnik daily.

Dimitrov conceded that the Government was well aware of the problem when he said that the Cabinet asked Gazprom in 2008, just two years after signing the current deal with the Russian energy giant, to add 500 million cu m to annual deliveries.

The latest round of talks were held during President Georgi Purvanov’s visit to Moscow in January, after which Dimitar Gogov, the chief executive of state-owned distribution monopoly Bulgargaz, said that he was optimistic that the annex could be signed by mid-2009. Gogov, who earlier had dismissed Prokopiev’s concerns as unfounded, would not rule out the prospect of protracted negotiations.

Bulgaria was counting on deliveries through the Nabucco or South Stream pipelines to cover the increased consumption after 2010, but both projects remain on the drawing board and would not be completed as initially scheduled.

Proposed link-ups to the gas grids of Romania and Greece would not be done in time for next winter either. Connecting to Romania is the easiest and cheapest - for just 30 million euro, Bulgaria can build the pipeline that would allow pumping 600 million cu m annually, but it would take at least a year and a half to build, according to officials from transit firm Bulgartransgaz, quoted by website investor.bg.

The link-up with the Greek gas grid would cost 120 million euro and take a year longer to build, but it would have a slightly larger annual capacity of 700 million cu m.

Bulgaria’s best bet to avoid a repeat of January’s scenario would be to quickly expand the capacity of its Chiren storage facility, but it is also the most expensive option at 250 million euro. For that price, Bulgaria could boost the storage capacity to 600-870 million cu m a year, up from 450-570 million cu m now, as well as increase the daily pumping capacity to 10 million cu m, from the current 4.3 million cu m.

Hopes that the European Commission would cover a large part of the spending remained slim after European Commission spokesperson Mark Grey said Bulgaria should not rely exclusively on the five billion euro energy efficiency programme of the European Bank for Reconstruction and Development. Nor is the depository on the list of priority infrastructure projects that will receive funds from Bulgaria’s national Budget this year.