Bulgarian Energy Minister Threatens with a Loss of Billions If the Gas is Not from Gazprom

“We have a contract that, if we don't fulfill it, we owe billions, on the other hand, under it we can get gas, which is one of the cheapest that can be found. And we question whether to use it or not.” This is how the Minister of Energy Rosen Hristov described the situation with the possible renewal of negotiations for the supply of natural gas from the Russian company "Gazprom" for the coming months.

"I understand geopolitics and all other policies but the economy is the economy. The more we mix politics with the economy and election campaigns with the economy, the worse things get for the end user," the minister added.

A few days ago, he presented as inevitable the renewal of negotiations on the supplies, which were stopped unilaterally by the Russian side at the end of April, when Bulgaria refused to pay the raw material in rubles, as requested by the President of Russia, Vladimir Putin, in response to European sanctions. However, according to the European Commission, such payments would violate them.

Hristov, who inspected progress on the construction of the interconnector with Greece, pointed out that the liquefied gas from two tankers contracted by the “Petkov” government, which are to be unloaded in September at the Greek port of Revithoussa, is 50% more expensive than that which can be obtained from Gazprom.

"The situation is clear - we have a contract with ‘Gazprom Export’ for the supply of 3 billion cubic meters of natural gas and an obligation to use at least 80% of this amount. If we do not do it, we are obliged to pay for it, regardless of whether we have used it or not. So far under this contract we have used 1 billion cubic meters, but it should be 2.4 billion. So if we don't take advantage of the remaining amount, we will probably go to arbitration with the potential to lose up to nine figures, depending on who calculates. Separately, we need gas delivery at the lowest possible price," said Hristov.

Hristov stated that he cannot understand why the topic of gas is being politicized and used for all kinds of comments.

"I am asking the experts tied to political parties to look at things realistically and not mislead the population. The situation is simple, there are no left and right turns, I am not into sudden movements. Things are logically and economically justified," Hristov said.

He specified that negotiations with the Russian company within the framework of the current contract would also be useful for possible arbitration in the event that the Russians refuse to renew supplies.

"What is the probability that we will win arbitration, given that a number of countries in Europe (Germany, Italy, Greece, Austria) have accepted this payment scheme and continue to work on it? That is, what is our position – ‘Gazprom’ changed the contract and we quit, but why didn't the others do it? They judged that the change in the terms of payment was not an essential condition and would not hold up in arbitration," commented Hristov.

According to him, gas from Gazprom is the second cheapest after Azerbaijani gas. However, the Russians will not be negotiated with if a better alternative is found, while looking for sources from Turkey and Saudi Arabia.

“I am very glad that in Sofia there are people with financial means who can pay more expensive gas. We have such gas and can sell it to them immediately,” said the acting Minister of Energy

He explained again that the necessary quantities of gas for October will be obtained from Azerbaijan, the contracted tanker from the American company "Cheniere" and from auctions, as in September.

Next week, he invited the energy ministers of Greece and Romania to discuss the construction of the interconnector, adding that other joint projects that would help solve gas supply problems would also be discussed, without giving details.

On the occasion of the construction of the interconnector, which should be ready in September to allow the delivery of an increased amount of gas from Azerbaijan from October, he said that a strong mobilization and coordination is visible between the teams of the contracting company ICGB and the builder Avax, on one hand, as well as from the Ministry of Regional Development and Public Works.

“There is still a lot of work to be done. We’re currently not behind schedule. Things are going according to plan. There are a lot of assignments next week. There is work with local authorities to certify local roads, water pipes, ditches,” he added.

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