THE price at which Bulgaria buys natural gas from the Russian giant Gazprom will remain unchanged until the contracts between the two sides expire in 2010.
Economy and Energy Minister Roumen Ovcharov announced this on February 1. He was emerging from a meeting with Russia’s minister of industry and energy Viktor Hristenko.
Hristenko said Bulgaria had so far duly met its obligations on the contracts and had not caused any trouble with gas supplies.
Asked whether extension of the contracts could be negotiated and signed for the period after 2010, Hristenko said it was in Russia’s interests to have long-term supply agreements with Bulgaria. He expressed Russia’s wish to define its strategic partners for the next 30 years. Therefore, the two countries will soon start negotiations on strategic commitments.
Top officials from Gazprom, a state-owned company, attended the meeting and proposed to increase the transit of Russian gas via Bulgaria, the Economy and Energy Ministry in Sofia said in a statement.
Gazprom has also confirmed its earlier offer for the construction of a gas pipeline from Bulgaria to Serbia and increasing the capacity of already existing pipeline facilities stretching to Greece.
The Russian side has also expressed readiness to consider the financial feasibility of a project for building a gas pipeline via Bulgaria to Italy.
Hristenko and Ovcharov also discussed the fate of the project to construct an oil pipeline between the Bulgarian Black Sea port of Bourgas and the Greek Aegean port of Alexandroupolis. The matter might be resolved by March, Hristenko said.
In early March, a meeting will be held in Athens with representatives of Bulgaria, Russia and Greece, where the matter of the financing of the construction should be resolved. Ovcharov even expects a trilateral agreement to be signed, which will boost the project development.
Resulting from the continuous pressure from Gazprom to review the transit contract signed in 1998, Bulgaria is looking for energy providers other than Russia to secure its supplies, Ovcharov told Parliament on January 27. He was answering questions on the country’s energy strategy, asked by the opposition United Democratic Forces.
“Gazprom still insists on the amendment of the gas transit agreement, but Bulgaria’s position remains unchanged,” Ovcharov said.
In his words, the country is “proactively working” to secure alternative gas deliveries for itself and for the region of South East Europe.
Ovcharov said the main alternative was the 3300-km pipeline project Nabucco, which would link Bulgaria with some other countries, other than Russia, with gas fields in Iran and Azerbaijan through Turkey.
Another option was importing natural gas from Algeria, he said, adding that the cabinet was analysing the recent gas dispute between Russia and Ukraine to avoid a similar situation in Bulgaria.
Currently, Gazprom sells natural gas to Bulgaria’s state-owned gas supplier Bulgargaz under two contracts: one for direct delivery and one in exchange for Bulgaria transiting Russian gas to Turkey, Greece and Macedonia. Both contracts expire in 2010.
Gazprom now pays transit fees to Bulgaria in the form of gas at a price set at about $83 for 1000 cubic metres, compared to the $257 Bulgaria pays for supply not covered by the transit contract.
The Russian company wants to renounce the gas-for-transit agreement and receive direct payment for all gas deliveries. Bulgaria fears that in this case, Gazprom would decrease the volume of gas piped via Bulgaria and use an alternative pipeline under the Black Sea, which was quite recently launched under the name Blue Stream.
Bulgaria imports about 2.73 billion cubic metres of natural gas every year from Russia, 90 per cent of the country’s total needs.
Presenting the cabinet’s energy strategy in Parliament on January 27, Ovcharov was quite sharp, stating that the European countries should be informed that Bulgaria was the only country paying in advance the price for joining the European Union.
“We are meeting our commitments and very much hope that the EU will meet its own because this price is four billion euro,” Ovcharov said. He was referring to the price Bulgaria would have to pay for the construction of a second nuclear power plant at Belene.
The country needs the second nuclear plant in order to cover its needs for domestic consumption and exports, which will be seriously damaged after it shuts down two more reactors at the first plant in Kozlodui by the end of 2006. Thus, Bulgaria will fully comply with EU requirements, as the union fears the Soviet-type reactors dangerous.
In relation to the decommissioning of units three and four of Kozlodui, Ovcharov also said that Bulgaria should be more careful when signing electricity export agreements for 2007-2008 so as to guarantee domestic needs first. Taking a question, Ovcharov said there would be no electricity rationing but that exports will be dramatically reduced.
