Bulgaria to Seal Gas Contract with Russia by End of Summer

Energy | April 10, 2012, Tuesday // 16:42|  views

Energy Minister Delyan Dobrev has emphasized that large-scale consumers of gas in the country need predictability. Photo by BGNES

Delyan Dobrev, Minister of Economy, Energy and Tourism, has suggested that the new gas contract between Bulgaria and Russia should be signed by the end of the summer.

"We cannot afford to wait until the last moment because large-scale consumers of gas in the country need predictability," Dobrev said in a Tuesday interview for Capital Daily.

Dobrev noted that Bulgaria had concrete strategies for reducing gas prices such as making the tariffs dependent on spot market prices too and not only on prices of oil derivatives.

"There was a certain point at which it was more profitable to tie the price to oil derivatives, but at the moment it is just the other way round," the Energy Minister remarked.

He explained that Bulgaria would aim for maximum flexibility without entering into commitments spanning longer periods than necessary for getting access to alternatives.

Dobrev argued that Bulgaria had to have guaranteed gas supplies for at least six years ahead because the next opportunity it would get for tapping substantial volumes of gas would be in 2018 from the Shah Deniz II field.

The Energy Minister assured that by 20128 the country would be able rely on the gas grid interconnections with Romania, Serbia, Greece and Turkey and on a major energy project, "be it Nabucco or something else."

He made clear that Bulgaria would offer Nabucco Gas Pipeline International GmbH to use the national gas transmission grid rather than build a new pipe for the project, as long as the conduit would carry up to 10 bcm by 2018.

Asked to comment on the forthcoming privatization of the Bulgarian Energy Holding (BEH), Dobrev specified that it was more likely to float 20% of BEH on two stock exchanges simultaneously because the Bulgarian BSE was plagued by a lack of liquidity.

The Energy Minister insisted that the move would bring institutional investors, boost transparency and improve the management of the companies.

He emphasized, however, that before the scenario could take place," burdens" like the Belene NPP had to be spun off  from the BEH into a separate project company.

In a separate interview on Tuesday, Dobrev noted that the prospects of finding gas fields in the Black Sea were very good.

The Energy Minister told journalists that the projects had already attracted the interest of leading international gas companies.

Dobrev stressed that the deadline for the submission of technical proposals was May 30, adding that they would be evaluated by mid-June.

He revealed that the Energy Ministry was working on nine major projects that had already attracted investor interest and implied that a large-scale project could be implemented by end-May.

Dobrev mentioned that Bulgaria was facing enormous competition from neighboring countries in the fight to attract investors.

The Energy Minister underscored, however, that Bulgaria had its advantages like the stable budget framework and the opportunities for applying for funding under operational programs.

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Tags: Delyan Dobrev, gas supplies, Russia, Belene NPP, BEH, Bulgarian Energy Holding, privatization, Bulgarian Stock Exchange, BSE, Nabucco Gas Pipeline International GmbH, gas grid interconnection, gas field


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