Lower Gas Prices in Bulgaria Only Possible with Local Production - Minister

Energy | June 12, 2012, Tuesday // 12:34|  views

Energy and Economy Minister Delyan Dobrev has suggested that Bulgaria needs to boost local gas production to achieve lower gas rates. Photo by BGNES

Bulgaria will only get lower gas prices if it develops its gas production potential, according to Delyan Dobrev, Minister of Energy, Economy and Tourism.

Speaking Tuesday in an interview for the Bulgarian National Television (BNT), he said that the gas Bulgaria extracted from the Black Sea was 40% cheaper than natural gas imports.

He argued that Bulgaria could get tangibly lower gas tariffs only by encouraging local gas production.

Dobrev noted that boosting domestic gas production would make Bulgaria energy independent, at the same time guaranteeing prices half the ones the country was now paying.

Bulgaria's Energy Minister suggested that stimulating domestic gas production was a better option than seeking to diversify gas supply routes and sources, because the latter involved certain production costs and could never bring the price levels Bulgaria was seeking,

Regarding the talks with Gazprom and the price of Russian gas, Dobrev assured that the discount had already been calculated and would be applied.

Russia agreed to a discount of 11.1% on gas prices from April 2012, which has not yet entered into force due to additional clauses requiring Bulgaria to state its commitment to the implementation of the South Stream gas pipeline.

"Bulgaria's gas market has been considered liberalized since 2007 but, technically speaking, this is not the case. We need to open up the market so that all companies that have contracts with Russia will have access to Bulgarian clients," the Energy Minister highlighted.

"If we admit other companies, there will be competition, which is good. This is beneficial both to the people and the business sector," Dobrev suggested

"We keep having only one supplier selling gas at prices regulated by the State Commission for Energy and Water Regulation (DKEVR). Just because of the difficulties that Bulgargaz will experience, we should not hold the monopoly," the Energy Minister commented.

Asked whether the Nabucco or the South Stream gas pipeline project was of higher priority for Bulgaria, Dobrev stated that Bulgaria backed both schemes because they entailed different privileges.

Bulgaria's Energy Minister announced that South Stream would provide Bulgaria with greater security of supply routes, meaning that Ukraine would not be able to trigger disruptions as in 2009, while Nabucco would allow Bulgaria to achieve energy diversification.

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Tags: discount, Gazprom, Russia, gas supplies, Black Sea, gas prices, Delyan Dobrev, Energy and Economy Minister, South stream, Nabucco, gas pipeline


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