Bulgarian natural gas distributor Bulgargaz and Russian energy company Gazprom signed a memorandum for further co-operation in the provision of the natural resource.

Company representatives also signed two annexes to the current supply and transit passage of natural gas agreement, Bulgarian National Radio reported.

According to preliminary Economy Ministry information Bulgaria is guaranteed income from the transit passage of natural gas until 2030. This income is to increase from 1.2 to 4.7 billion leva.

The memorandum envisions a gradual increase in the price of natural gas, until the levels paid by other European countries are reached.

Based on the previous agreement Bulgaria had with Gazprom, it received natural gas at much lower prices. In the end of 2005 Gazprom demanded changes to the agreement, which could have increased natural gas prices in the country by as much as 40 per cent.

The gradual increase listed in the memorandum will prevent an industry shock from occuring and is to be implemented from 2007 to 2012.

Guaranteed transit passage of natural gas ensured predictable economic environment and the competitiveness of the Bulgarian economy, the national radio reported.

Other countries that have signed long-term contracts with Gazprom include France, Germany, Poland, the Netherlands, the Czech Republic, Italy, Hungary, Austria and Finland.