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Bulgaria Seeks Alternative Energy Providers to Replace Russia's Gazprom: Minister

Posted on: Saturday, 28 January 2006, 09:00 CST

Bulgaria seeks alternative energy providers to replace Russia's Gazprom: minister

SOFIA, Jan. 27 (Xinhua) -- Bulgaria is looking for energy providers other than Russia to secure its supplies, amid continuous pressure from Russian gas giant Gazprom to review a transit contract signed in 1998, Energy Minister Rumen Ovcharov said on Friday.

"Gazprom still insists on the amendment of the gas transit agreement, but Bulgaria's position remains unchanged," Ovcharov told reporters after a parliament hearing on the country's energy policies.

He said Bulgaria had received a letter from Gazprom, which reiterated its demand for a review of current arrangements, a step that would lead to a sharp price increase.

The country was "proactively working to" secure alternative gas deliveries for itself and for the region of southeast Europe, said the minister.

Ovcharov said the main alternative was a 3,300-km pipeline project, which would link Bulgaria and some other countries with gas fields in Iran and Azerbaijan.

Another option was importing natural gas from Algeria, he said, adding that the government was analyzing 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 provider Bulgargaz under two contracts: one for direct delivery and one in exchange for Bulgaria's 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 around 83 U.S. dollars per 1,000 cubic meters, compared with the 257 dollars 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.

Bulgaria is importing about 2.73 billion cubic meters of natural gas a year from Russia, 90 percent of the country's total needs.

Bulgarian officials said Gazprom was pushing Bulgaria to switch to a system under which it pays transit fees in cash and Sofia buys all of its gas at market prices.

Earlier this month, Ovcharov described Gazprom's proposal as unacceptable, saying, "We see no reasons and no conditions that could lead to a review."

Source: Xinhua News Agency - CEIS

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