Economists against energy holding Economists stood against a merge of the state companies into an energy holding. This would trouble the competition and will affect negatively on the market, said in an analysis Petar Ganev of Market Economy Institute. The idea for an energy holding is from the time of Milko Kovachev management and is supported by ex-Minister Roumen Ovcharov and the current Minister Petar Dimitrov. The Ministry is proceding on the preparation of a holding that will unite Mines Maritsa Iztok SPJSC, Thermo-electric power plant Maritsa-iztok-2 SPJSC, Nuclear Power Plant Kozloduy SPJSC, National Electricity Company (NEK) SPJSC and Bulgargaz holding SPJSC.
Source: Standart (07.01.2008)

Heat supply companies in the country will be a priority for gas supply if the weather conditions worsen, decreed yesterday the Minister of Economy and Energy – Petar Dimitrov, to the management of Bulgargaz. He called for the head of Bulgargaz, State Commission for Energy and Water Regulation and Sofia Heat Supply, after numerous signals that the heat supply in several cities has been weak since Thursday. This means that Bulgargaz will have to suplly its biggest debtors as the problems were registered in Sofia, Plovdiv, Vratsa and Veliko Tarnovo.
Source: Sega (08.01.2008)

Rahovetzgas-96 JSC stopped the gas supply for Heat Supply-VT in Tuesday morning and Veliko Turnovo remains without heating. Nobody knows how long 4000 households, 11 schools and the National Military University will be without heating, said Milcho Mihailov, a deputy executive director of the heat supply company. The argument is to whom Heat Supply-VT has to pay BGN 600 000 for the natural gas in January – to Rahovetzgas-96 JSC or to Bulgargaz holding SPJSC.
Source: Dnevnik (23.01.2008)

Heat Supply-Sofia spends BGN 1.5 mln a day for gas and collects bills worth BGN 400-700 thousands from its customers. That was announced by the head of the company Petko Milevski. He was summoned at the Municipal Financial Commission because of a warning letter from Bulgargaz. For the 20 days from the beginning of the year Heat Supply-Sofia has made a BGN 50 mln debt, alarmed the gas-supplier. The debt has already been decreased to BGN 30 mln, said Milevski. Every year the heat-supply unit makes short term debts and manages to pay off until the summer. However an old debt of BGN 137 mln is still paid off on parts.
Source: Standart (23.01.2008)

The privatization of Heat Supply-Sofia should finish until the end of 2009 at latest, announced the Minister of Economy and Energy Petar Dimitrov. The company should be sold as a whole and not at parts. If Sofia Municipality agrees we will do it together. Otherwise only the 42 percent owned by the state will be privatized together with the debt to Bulgargaz worth BGN 150 mln, added the Minister.
Source: Monitor (24.01.2008)

The natural gas agreed with Gazprom subsidiaries for January has been exhausted. In certain moments Bulgariaz has consumed 13-14 mln cub.m. in stead of the agreed 9 mln cub.m. Russia supplies Bulgaria on ‘free will’. The supplies may be shut down at any time in case Moscow decides to supply according to the contract. ‘In fact, Russia has suppplied us with about 20% more natural gas this month’, said Bulgargaz PR – Ivelina Barneva. According to her the higher consumption will not affect the neighbour countries. The crisis situation forced Minister of Economy and Energy Petar Dimitrov to gather at an emergency meeting representatives of Bulgargaz and of the big heat supply companies in Sofia, Plovdiv and Pleven.
Source: Trud (29.01.2008)

Negotiatons for Kremikovtzi Finished Within Hours Negotiations over Kremikovtzi wil be finished within hours, announced the minister of energy and economy, Mr Peter Dimitrov, after his meeting with the current owner, Mr Pramod Mital who however did not make any comments, reported the National Radio. The company cannot be declared bankrupt and the investors are to follow the agreement made, Mr Dimitrov also said. There were several applicants for the purchase of the combine but the cabinet contacted only Mr Konstantin Zhevago. EC, however, is launching new proceedings against Bulgaria reads a notification letter sent by the mayor of Sofia, Mr Boiko Borissov, and addressed to direction of Environment of EC. The complain was filed in view of the excessive pollution the Kremikovtzi manufacture inflicts.
Source: Zastrahovatel (30.01.2008)

They tighten the control over enterprises with more than 50 per cent of State participation in the capital. These companies will be under a special supervision by the Minister of Finances Plamen Oresharski. This is what a decree for supervision of the financial state of the State companies says.
Source: Standart (31.01.2008)

Moscow and Brussels in Gas Race Moscow and Brussels started a real gas competition in implementing the two gas projects - the Russian South Stream and Nabucco, considered an alternative for Kremlin's influence in the EU. Nabucco gas pipeline can start functioning in 2013, Bulgaria's Minister of Energy, Petar Dimitrov said in Vienna. To him, this is the optimistic variant for the start of gas supply on the European pipeline. The pessimistic one has not been considered yet. The first supplies of gas from Russia to Italy along South Stream are expected to start in 2013. During the visit of Russia's President Vladimir Putin to Bulgaria in the middle of January, the Bulgarian Government decided to let the pipeline cross the territory of Bulgaria. Now Europe seems determined to outrun Russia and start Nabucco project earlier than South Stream. And it seems that Sofia's decision has triggered the action on the otherwise quite slumbering lately Nabucco. Experts see as the darkest option for Nabucco to be inaugurated in 2025, the Standart learnt. The main obstacle for the implementation of the project is the lack of natural gas supply. Nabucco Pipeline are explicit that gas will flow in the pipeline in 2013 the latest. Yesterday in Vienna Bulgaria's Energy Minister and his counterparts from the other participant countries in Nabucco project - Turkey, Romania, Hungary and Austria singed a memorandum for acceding a sixth shareholder in the pipeline - the German giant RWE. The officials also agreed on accelerating the construction of the pipeline. The accession of the German energy company in the deal diminishes the shares of the previous participants to 16,7% each. The French Gaz de France is also willing to participate in Nabucco.
Source: Standart (06.02.2008)

Distraint on Kremikovtsi Land Bulgarian state institutions have levied a distraint on Kremikovtsi's land thanks to a big state-owned company that has lent large sums to the steel works, anonymous sources from Bulgaria's Economy and Energy Ministry told the Standart. The claim was laid in Sofia City Court last week and has not been answered yet. The claim was made at the explicit request of Bulgaria's Prime Minister, Sergey Stanishev himself in order to guarantee that the steel works will not fall into the hands of speculators who could sell the tempting property as separate businesses. The land owned by Kremikovtsi is about 17 million sq. m. and costs over a billion levs. Over three thousand workers gathered to protest in front of the plant yesterday. Trade unions started negotiating a 25% wage rise.
Source: Standart (07.02.2008)

The international project company for the construction of the pipeline Burgas – Aleksandrupolis was registered in the capital of the Netherlands – Amsterdam. The name of the company is Trans Balkan Pipeline. The Russian participant in the project holds 51 percent of the capital. The Bulgarian share is 24.5 percent of the Proektna programa Burgas - Aleksandrupolis BG JSC – a consortium of the state-owned Bulgargaz holding SPJSC and Technoexportstroy SPJSC. The Greek share in the project is 24.5 percent as well.
Source: Darik Radio (08.02.2008)

Stanishev Stops the Sale of Bulgargas Bulgargas and NPP Kozloduy will be the only state-owned energy giants, Standart learnt. PM Sergey Stanishev ordered the gas holding to be removed from the government program. One of its versions dated January 31 provides for the privatization of Bulgargas. Currently the company is on the restrictive list and is not a subject to denationalization. It is of key importance for Bulgarian economy as it provides natural gas for the country and takes part in strategic projects such as Burgas-Alexandroupolis pipeline, South Stream and Nabucco. If Bulgargas becomes a private company that will deprive the state of million-euro profits coming from transit fees and dividends.
Source: Standart (08.02.2008)

The state-owned energy companies should go public while the government should abandon its plans to consolidate all state-owned energy assets into a holding structure, representatives of the Bulgarian power industry demanded at a public discussion Monday. The government coalition decided this past weekend to move ahead with plans to merge Bulgargaz Holding, power grid operator NEK, the Kozloduy nuclear power plant, thermal power plant Maritsa Iztok 2 and mining company Maritsa Iztok. The new structure will further complicate the problems already afflicting the management of the companies and as a solution is tailored only to the needs of power generation, said expert Lyulin Radulov. The creation of the mega-holding would stunt the development of the market and would provide opportunities for cross-subsidising, said executives from non-ferrous company KCM.
Source: Dnevnik (12.02.2008)

Bulgaria's Business Community: Put Power Engineering on the Counter Bulgaria must place its power-engineering on the counter if it wants to stabilize the state-owned enterprises in energy sector. This was the conclusion drawn yesterday at a roundtable discussion of the Bulgarian Industrial Association, under the topic The Bulgarian Electricity Market. According to representatives of the Bulgarian business community, the setting up of an energy holding would not solve the issues of the state-owned energy enterprises. It would rather deepen the crisis in the state-owned energy companies, which resulted from complicating their management hierarchy, experts said flat. "To revive the state-owned energy companies requires heavy investments," asserted Liulin Radulov, who is an energy expert. In his opinion, merging the state-owned Maritsa Iztok Mining, Bulgargaz Holding, National Electrical Company, Maritsa Iztok-2 Thermal Power Plant and Kozloduy Nuclear Power Plant into a single large holding would not settle their issues and magically change them into companies capable of withstanding fierce competition on the liberal market. "Therefore a decision has to be taken whether to denationalize them or draw in strategic foreign investors, well-known at the European energy market, who would pour money into them," Radulov pointed out. The example Radulov gave to bear out his argumentation was the privatization of the power distribution companies, which lead to their restructuring and the stabilization.
Source: Standart (12.02.2008)

The Council of Ministers decided to unite five power-supplying companies into Bulgarian Energy Holding. Mines Maritsa Iztok SPJSC, Thermo-electric power plant Maritsa-iztok-2 SPJSC, Nuclear Power Plant Kozloduy SPJSC, National Electricity Company (NEK) SPJSC and Bulgargaz holding SPJSC will became a part of the new company. The assets will be EUR 4 billion and the forecast year income – EUR 1,8 billion. It will be one of the largest power-supplying companies in the region. The state will own 100% of the capital of the Bulgarian Energy Holding.
Source: Darik Radio (14.02.2008)

Bulgaria Launches Mega Energy Holding for Christmas The new mega holding will foster the five state energy companies - Maritsa -Iztok Mines, Maritsa -Iztok 2 Thermal Plant, Kozloduy NPP, the National Electric Company and Bulgargaz. The Ministry of Energy and Economy will keep the majority share (between 51% and 75%) in the five companies and the minority shares (between 25% and 49%) will be transferred to the newly-established mother company. The restructuring will be realized in two stages. The BEH's assets will amount to four billion euro which means it will be one of the largest energy companies in the region. The company is planned to have an annual income of 1.8 billion euro. The state will hold 100% of the holding's capitals.
Source: Standart (14.02.2008)

Bulgarian state-controlled Bulgargaz Holding and France's Dalkia, owner of the Varna heating utility, intend to set up a joint venture for co-generation in neighboring Macedonia, Dnevnik learned from Bulgargaz sources. The investment is envisaged in the business plan of the gas distributor through 2012 approved last year. It was not immediately clear how the two partners intend to split the equity of the future joint venture.
Source: Dnevnik (20.02.2008)

Mittal Begs for Three Months' Grace The management of Kremikovtsi Steel Works requested from the Bulgarian government that the company operates for three more months under current owner Pramod Mittal. The plant has been supplied with raw materials enough for it to operate for 90 days and make 100-110 thousand tons of steel products. The request was made in a letter to the Bulgarian government. Mittal's subordinates pleaded to the government for understanding and entreated that the company discharges its current financial obligations to state-owned companies such as BDZ (the national railway operator), National Electric Company (NEC) and Bulgargaz alone, otherwise an "extremely negative" situation would befall Kremikovtsi the outcome of which would be unpleasant for both the company itself and all parties interested in it.
Source: Standart (20.02.2008)

Unions: Kremikovtzi goes out to 24 hours if the Council of Ministers does not take urgent measures The syndicates in Kremikovtzi demand urgent intervention from the government and the creation of a schedule for the payment of the debts to the natural gas and electricity suppliers, as well as to the BDZ system. If the necessary political steps are not made, we go out in front of the Parliament on Friday, together with the miners, chemists and power engineers stated Vassil Yanachkov, head of the Confederation of Independent Trade Unions (CITU) at Kremikovtzi. According to him the Kremikovtzi operations must not stop and then the steelmaker will be able to pay off the old and the current debts as well. If this does not happen and Bulgargaz and BDZ take the measures they threaten to take, Kremikovtzi will cease operations in the next few hours. According to CITU data, currently Kremikovtzi is supplied with smaller quantities of natural gas and BDZ has blocked the supplies with resources and materials, which hampers the realization of the ready output.
Source: Darik Radio (21.02.2008)

The integration of state-owned National Electric Company (NEK), Kozloduy nuclear power plant (NPP), Bulgargaz, Maritsa Iztok-2 thermal power plant (NPP) and Maritsa Iztok Mines may result in a delay in the implementation of the project for the setting of the Belene NPP, Jan Skvaril, management consulting director at Deloitte Bulgaria, who is also in charge of the development of the project, said. One of the major challenges ahead of the energy holding is the delay of projects that are already underway, an analyses of the consultancy company shows. The reasons may be purely organisational, such as the delay in the making of a decision, Lyudmil Garkov, who is in charge of the corporate finances at Deloitte said. It is unclear as to who will take the decisions on projects such as the Bourgas-Alexandroupolis, Nabucco and Belene NPP after the setting up of the holding, according to Garkov. The state, however, has insisted that the delays of these projects be avoided. Another challenge before the energy holding is to secure investments for all these projects. This depends entirely on how transparent the management of the holding will be, according Skvaril. The fact that the structure of the five companies is very different may also obstruct their consolidation. This may lead to the ineffectiveness of the holding, according to Deloitte's analyses. The new structure will not have enough resources to expand to other countries. The inability to take decisions, the difficult allocation of responsibilities, the poor motivation of the managers of the different companies and the prolonged decision making process will be among the weaknesses of the new holding company, according to Deloitte's analysis. If the state manages to overcome all these challenges, the megaholding may be useful after all. The energy holding will be able to attract more investments, to secure the supply of energy resources and will be competitive. It also will turn Bulgaria into a regional a player on the regional energy market. One of the major tasks of the holding will be to propose changes to the regulatory framework in the energy sector. The ministry of economy and energy will remain the majority owner in the five companies at the first stage of the establishment of the holding. Equal minority shares in the five companies will be transferred to the parent company. The five companies will remain legally and financially independent but will work under the new structure. The five companies should be restructured in two years, if everything goes as planned. The second stage, which envisages the setting up of an operative holding will be launched afterwards. It will will also be decided whether the new company should be listed on international stock exchanges.
Source: Pari (21.02.2008)

Bulgaria Keeps Mittal in Check Bulgaria keeps Pramod Mittal in check after the state won a legal case and made Mittal pay 239,35 million levs in penalties to the national Post-Privatization Control Agency for failing to fulfil the privatization contract. "The case has been going since 2006. Last week, the court finally ruled," Bulgarian Minister of Economy and Energy Petar Dimitrov said. "We'll obtain a writ of execution, and if they refuse to pay, other steps will follow," Minister Dimitrov said in answer to the question whether the state would resume ownership over Kremikovtsi. "For now the main packet of shares is in the hands of Finmetals, and we'll have to consider well what our next move will be," Minister Dimitrov added. He also declared the government would reject Mittal's request to be given a three months of gratis payment to the National Electric Company, BDZ (the state-owned railway transport enterprise) and Bulgargaz. "Mittal made a promise that he would invest US$100 million under the viability plan for Kremikovtsi, but he did not keep it. So I say enough with the lies. The government will not trust tears anymore," Minister Dimitrov concluded. The measures adopted today keep Kremikovtsi steel at bay. Apart from the penalties Kremikovtsi has to pay and its current and overdue liabilities to the state-owned giants. There has been a distraint on the company's shares, which are property of Finmetals, by the Post-Privatization Control Agency since 2004. To top it all, a week ago the State Receivables Collection Agency demanded a ban on the sale of 500 hectares of land, possession of Kremikovtsi.
Source: Standart (21.02.2008)

Bulgarian govt refuses to shield Kremikovtzi from creditors Bulgarian economy minister Petar Dimitrov Wednesday refused to grant the request of local steel mill Kremikovtzi for a three-month leeway on outstanding debts as the beleaguered company works down its operative financial obligations. Dimitrov said Wednesday that Finmetals Holding, which owns a 71% stake in the nation's biggest steel maker, has been sentenced by the Sofia City Court to pay 239.2 mln levs in investment defaults to the Post Privatisation Control Agency (PPCA). The ruling is final as Finmetals Holding has failed to lodge an appeal in time. 'There is no more room for compromise,' said Dimitrov in response to the request of the Kremikovtzi management that the government keep at bay for another three months the economy ministry and its investment commitment pressure on the plant and the state-controlled railway carrier BDZ, gas supplier Bulgargaz and power utility NEK which have been clamoring over unpaid bills. The three-month breathing room, Kremikovtzi owner Pramod Mittal argued, would allow the company to eke out an operative profit and find a strategic partner to shore up its business. BDZ last week refused to ship any Kremikovtzi cargo while the trade unions at the plant said Wednesday that gas supplies had been lowered. The court-ordered injunction that the PPCA had imposed on Kremikovtzi shares held by Finmetals Holding four years ago did not prevent then owner Valentin Zahariev from selling the majority owner of the mill to Indian businessman Mittal. The award of 239.2 mln levs equals the amount that the majority owner was obliged to furnish as security for the implementation of the investment program in the five years after the privatisation deal. Going forward, Finmetals Holding will either have to voluntarily make the payment as the court ordered or the debt could be enforced through a writ of execution. No one at the Mittal press office in Sofia was commenting Wednesday. The government has so far recognised $140 mln in Kremikovtzi investment made by the owner versus a commitment for an investment of $300 mln in 1999-2004. The Finmetals Holding stake is also furnished as security on bond placed by Mittal in 2006. In an effort to get the plant on the path to recovery, the economy ministry has already started talks with the biggest among the Kremikovtzi noteholders. If the noteholders decide to take control of the steel mill through Finmetals Holding, they will end up debtors to the state under the Sofia City Court ruling. In that case, one course of action mulled by the noteholders is selling off the plant's blast furnaces, the coke and chemical production unit and the continuous casting line, key assets whose disposal would idle the steel mill. Collaterising the bond with certain assets of the plant was approved by the Bulgarian government which controls a 25% stake in Kremikovtzi. A representative of the noteholders suggested to Dnevnik a couple of days ago that the government issue 325 mln euro in debt to repay the notes and regain control of the company. The preliminary financial results of the company show that it narrowed its yearly loss to 35.93 mln levs in 2007, down from 280 mln levs at the end of 2006. The report shows that losses were tempered by the sale of assets. The revenues booked under 'miscellaneous', the item tracking asset revenues and write-downs, indicated that the company pocketed 418.248 mln levs with overall output sales at 989 mln levs. In Q4 2007, Kremikovtzi posted a net profit of 30.982 mln levs versus a loss of 63.399 mln levs a year ago. The last quarter also saw the disposal of the bulk of assets that were shed in 2007 with revenues thereof reaching 392 mln levs versus 210 mln levs in output sales. A look at the non-current assets of the company reveals that in the last three months of 2007, the company parted with land booked at 11.95 mln levs, buildings worth 9.45 mln and machinery worth 19.57 mln levs.
Source: Dnevnik (21.02.2008)

Kremikovtzi execs unfazed by govt hardball Senior Kremikovtzi executives appear unflustered by the refusal of the Bulgarian government to coddle the owners of the struggling steel maker. Former chief executive director Alexander Tomov said the government is following a certain scenario and that all actions to date have been accurate and appropriate. While resisting pressure to sell, the Bulgarian government has repeatedly indicated that Indian businessman Pramod Mittal is no longer acceptable as a Kremikovtzi owner. On Wednesday, economy minister Petar Dimitrov said the government will cut no more slack when it comes to the continuing failure to honor obligations stemming from the privatisation contract and to the overdue payments to state-controlled resource and service providers like Bulgargaz, NEK and BDZ. The ruling against Mittal-owned Finmetals Holding, a 71% shareholder in Kremikovtzi, handed down by the Sofia City Court is seen as a further blow to the Indian businessman. Finmetals Holding has been ordered by the court to pay to the Post Privatisation Control Agency 239 mln levs for the breach of security provisions in the sell-off contract. In the aftermath of the ruling, the government is now a creditor to the Kremikovtzi majority owner as well as the steel mill itself. In case Finmetals fails to comply with the court ruling, the government will have sufficient grounds to have the privatisation contract voided, said Rusi Statkov, member of the PPCA supervisory board. To get to that point, however, an additional analysis of the pros and cons of such a move will have to be made, said Statkov. The government still controls 25% of the steel maker. Finmetals' failure to appeal the Sofia City Court ruling further complicates the steel mill's indebtedness relations with its multiple creditors. Bulgarian Steel Finance, an outfit specially set up for the placement of a bond issue in 2006 collaterised with some Kremikovtzi assets, is owned by Mittal's Global Steel Holding which in turn controls 71% in Finmetals. Under these circumstances, the noteholders could find themselves both majority owners and creditors of the steel maker. The state, for its part, could end up as a creditor to the noteholders if they assume control of Finmetals or as a debtor to them in case the privatisation contract is scrapped and Global Steel/Bulgarian Steel Finance dodge their obligations towards the noteholders. The government has so far been reluctant to seek the cancellation of the sell-off contract and has instead focused on pressuring Finmetals to honor its obligations, said Statkov. The intentions of some of the noteholders to dismember Kremikovtzi and then shut it down thus clearing the way for a reported office and housing development on the plant site run counter to the interests of the Bulgarian state. Prime minister Sergei Stanishev has himself publicly opposed the closure of the steel maker while the government has engaged in talks some of the larger noteholders under a format that excludes Mittal. The only issue on which the two sides have so far found common ground is Mittal's failure, be it through Global Steel Holding or Finmetals, to deliver on all undertaken commitments.
Source: Dnevnik (22.02.2008)

Bulgargaz limits the gas supply for Kremikovtzi Bulgargaz limits the gas supply for Kremikovtzi because of upaid financial debts, said the executive director of the gas company – Lyubomir Danchev. The supplies for the steelmaker will be reduced to the technological minimum within hours. Bulgargaz will reduce the supplies as much as there is enough only for the operations of the furnaces of the plant, said Danchev. If the gas supply is totally ceased, there might be a natural cataclysm, explained Danchev. Kremikovtzi owes Bulgargaz BGN 19 mln and has current unpaid bills worth BGN 6 mln. Danchev also said that the steel plant has began to pay off the extended debts, but nothing is done for the current accounts. ‘Of course that we care about whether the plant is going to be shut down’, said Danchev and added that Bulgargaz has tried to sell Kremikovtzi debts to a bank institution.
Source: Darik Radio (22.02.2008)

Bulgarian govt trying to wrest Kremikovtzi from Mittal's grasp State-controlled gas distributor Bulgargaz announced last Friday it has ramped down supplies to Kremikovtzi over the 19 mln levs in unpaid bills it is owed by the nation's biggest steel mill. The supplies are lowered to the technological minimum that will allow the Kremikovtzi furnaces to remain operational but without any real output. The move puts Kremikovtzi owner Pramod Mittal in a position where he will be unable to generate any profits from the company's business. At the same time, the state, a 25% shareholder in Kremikovtzi, has repeatedly opposed any moves to have the steel mill adjudicated bankrupt or liquidated. The government would like to find a new investor with strategic interest in rebooting the company. Since the majority stake in the steel maker is subject to a court injunction, a likely sale would involve Finmetals Holding which owns the majority stake. Last week, Finmetals, owned by Mittal's Global Steel, was at the receiving end of a court ruling awarding the Bulgarian state 239.2 mln levs in damages stemming from sell-off contract defaults. In its new capacity as a key creditor, the government will now have more leverage over Mittal. In case Finmetals is unable to make the court-ordered payments to the Post Privatisation Control Agency (PPCA), the sell-off contract may be voided, a development that carries a certain risk not only for Mittal but also for the holders of notes collaterised with some Kremikovtzi assets. The noteholders may become the new owner of Finmetals Holding, inheriting the Kremikovtzi stock injunction and a sizeable debt to the Bulgarian state. A foreign financial investor holding a big packages of Kremikovtzi notes said the court ruling in favor of the PPCA was a blow to the interests of the noteholders. The last-ditch plans of the noteholders do not rule out the liquidation of the mill, including the stripping of assets. In order to avoid such an outturn, the noteholders have pressured Mittal to hire Merrill Lynch to advise the sale of the mill. The Indian businessman said it would take around three months to find a strategic partner. To ensure the best possible outcome, Mittal had asked the government to hold off from cutting gas supplies and other services but his request was rejected. Last week, state-owned railway carrier BDZ also reduced the handling of Kremikovtzi shipments to the technological minimum. The biggest noteholders would like to see a public auction for the mill but it is not clear if the last run of events and the pressure exerted on Mittal by the government have been co-ordinated with the noteholders. Representatives of the noteholders had a series of meetings at the economy ministry with less than encouraging results. Ukrainian billionaire Konstantin Zhevago is the only candidate buyer for Kremikovtzi to step forward so far
Source: Dnevnik (24.02.2008)

Bulgaria's Bulgargas Holding will participate in the construction of a 200-megawatt co-generation facility at a heating utility of Macedonia's state-owned LM. Most probably our interest will be about 20%, Bulgargas's CEO, Lyubomir Denchev, said. The procedure for selection of partners has to begin within a few months. The contract will be signed by the middle of 2008. France's Dalkia is also expected to take part in the project. Bulgargas's participation in the project will help it diversify its investments, Denchev pointed out.
Source: Pari (25.02.2008)

The steel plant is stick with USD 1.2 bln -Mr. Banker, what is the real state of kremikovtzi? -We are not privileged in receiving information. But according to our estimates, Kremikovtzi debts exceed USD 1.2 bln, which includes the current debts to suppliers worth about USD 500 mln. We suspect that right after Global Steel Holding Limited received control over Kremikovtzi in 2006, they found a big ‘hole’ in the means of circulation of about USD 50 mln. As the former owner said later, the missing resources are due to ‘seizure of output at the custom storehouses and at other places’. As a whole, the plant is at very bad shape. But a simple repair works and renovation of some installations would allow it produce 124 thous. tons a month and it was accomplished in the first quarter of 2007. -Is there a dnger for the plant to be shut down or for the state to become a co-debtor on the bond loan and be forced to pay the EUR 325 mln? -We have always stated that this bond emission is a quasi-sovereign risk. I can think of at least six reasons for that and I think that the UK court would agree with me. First, the government owns a ‘gold share’ of 25.29 percent. Second, the government has a representative in the Supervision BoardThird, it controls the issuing of the integrated permits. Fourth, the state is ‘Number 1 creditor on the line’ through Bulgargaz, BDZ and NEK, which can at any time force the plant cease operations. Fifth, at the general shareholders meeting in 2006, the state voted ‘For’ the bond issue by its 25.29 percent. The state, represented by the government, has been a direct beneficiary of the emission income. The British court would find that very interesting and it is possible that the court may declare the state an obligated entity on the bond pay off. Sixth, the distraint over the Kremikovtzi shares owned by Finmetals, which is in state’s favor. If the shares distraint is executed, like Minister Petar Dimitrov said a few days ago, it would make the state an owner of 96.29 percent of Kremikovtzi and would have the control over the plant. This would activate the condition in the bond loan contract - Change of control. According to the British legislation, the bondholders may demand a preliminary pay off of the bonds at 101 percent of the principal. -Do you think a solution can be found? -Yes, there is a solution, and it is the state to take control over the plant. The Kremikovtzi assets we see are several. The first one is the land. It may be sold for about a billion EUR after long and hard negotiations with some country in the Persian Gulf, which dreams to construct a Satellite City. There are a lot of other assets that can be realized into profit by an experienced strategic investor and can be used to finance the expansion of Kremikovtzi. -Do you have any information if the bond holders consider a preliminary demand for pay off? -Some of the big bondholders owning more than 40 percent of the bond wish a preliminary acquittal. The agent of the bondholders has already declared that such a demand is necessary by the holders of at least 20 percent of the bonds. If such a demand is made, there will be a gratis period after which the non-fulfillment on the whole sum would become effective. The acquisition of the security is a different matter and I suspect it has to be decided into a Bulgarian court. As far as I know there is no precedent by which the court would go. -Do you have any information about the plans of Pramod Mittal to sell the plant in the next 3 months? -There are several strategic investors. Among them are two Russian, one Ukrainian, one Indian, one European and one American. I cannot say how serious their interest is. Global Steel has not allowed a single potential investor to make a preliminary inspection.Besides, Finmetals shares are providing the bond loan and there is not a scenario ‘Mittal sells Kremikovtzi’. Of course, there is an option that Pramod Mittal swallows his pride and calls his nephew Aditia Mittal, who certainly observes the story from his palace in Kensington Palace Gardens in London. Kremikovtzi debts may seem enormous for the ordinary people, but it is pocket money for Lakshmi Mittal, father of Aditia, and it can easily fit his Balkans operations.
Source: Standart (25.02.2008)

Another Indian Buyer for Kremikovtsi Indian Essar Steel Holdings Ltd eyes Bulgaria's largest steel works - Kremikovtsi. The company that failed to enter the tender for Navigation Maritime Bulgare is now considering options to become a strategic partner in the steel works, brokers from London told the Standart. The sources point out that these Indians are ready to get really interested in the complex only after the property issues are cleared and the bond holders are satisfied; presently the current Kremikovtsi owner, Pramod Mittal owes them 325 million euro. The other parties interested in Kremikovsi are Ukrainians Kostyantin Zhevago and Rinat Akhmetov, a Russian company possibly related to Oleg Deripaska, a European company and the US Steel. "We will not allow production and draining of Kremikovtsi at the expense of the state," said Bulgaria's Minister of Economy and Energy Petar Dimitrov. Minister Dimitrov explained that was the reason the state had decided to let the steel works function at "artificial respiration" by supplying it only with the minimum amounts of electricity and gas from the state-owned National Electric Company and Bulgargaz. "Bulgaria cannot be such a creditor. I cannot think of creditors who loan money without receiving any guarantee they will have it back some day," Minister Dimitrov commented further. Petar Dimitrov said he was doing his best "to keep the works alive but we cannot stimulate its operation for free."
Source: Standart (26.02.2008)

Zhevago has prepared USD 1 bln for Kremikovtzi Ukrainian billionaire Konstantin Zhevago has drawn a USD 1 bln loan from the London branch of Deutsche Bank. A part of the funds will go for the Kremikovtzi purchase, according to bankers from the City. Another part – about USD 185 mln, is for the development of the mining fields near Poltava. The investment boosts the production of the ore pellets with high metal content to the highest quality and the effectiveness reaches 15 percent, according to analyses of Zhevago owned Ferrexpo. His 443,326,058 shares in Ferrexpo plc cover the money through the company Fevamotinico S.a.r.l. The agreement was made on February, 5, said people familiar with the matter. Zhevago is supposed to own 75 percent of Ferrexpo, market capitalization – USD 3 bln. As of Deutsche Bank practice, the bank would not loan money for more than 35 percent of the shares at pawn, which is a little under USD 1 bln. ‘There is a secret plan for the sale of the steel plant. It is impossible that everyone to urge for their money at same time’, said head of Confederation of Labor – Podkrepa representation at Kremikovtzi – Lyudmil Pavlov. In his opinion, the state puts pressure on Mittal to sell quickly. ‘The plant is on the edge. It is supplied with 18,000 tons of gas for twenty-four hours, while we need 24,000 tons. Loom 1,700 does not operate and production is piling at its entrance, as no production comes out of it. Only one train brings in resources in the morning and carries out the output in the evening’, said Pavlov. According to the plan, the steel plant will be sold to the first candidate who shows USD 50 mln operative funds. There is also an urgent need of money for the workers salaries as the strikes keep on today. Monday Minister Dimitrov sad that the state has decided to leave the steel mill at artificial respiration in order to cease its draw out on behalf of the budget. The state-owned NEC and Bulgargaz will supply minimal quantities of electricity and gas.
Source: Standart (27.02.2008)

Kremikovtzi steel plant under siege Bulgaria's Kremikovtzi has been under siege for the past few weeks. It all started when railway carrier BDZ rapidly reduced the cargo transported to and from the steel plant due to a BGN 24 million debt. Late last month Bulgargas also cut gas supplies to the metallurgical giant and the National Electric Company is threatening to terminate power supplies for similar reasons. The company's creditors are also on the prowl. It may turn out that Kremikovtzi is not actually owned by Pramod Mittal. In 2006 the company floated a EUR 325 million bond issue, which was secured with equipment. In the case of default on coupon payments, the bondholders gain control over the pledged assets. Therefore the future of the plant depends to a great extent on creditors, as they have to approve a possible sales deal. The state initially defended the plant but then minister of economy and energy Petar Dimitrov warned that the government may interfere in the event of default on commitments. The Post-Privatisation Control Agency imposed a BGN 239.250 million fine on Finmetals (which is owned by Mittal's Global Steel) for failure to observe its privatisation contract. Minister of environment Djevdet Chakarov warned the plant will hardly be able to meet the requirements for an integrated pollution prevention and control permit. Kremikovtzi may have to be shut down and demolished, because pollution in the region is well above the admissible levels. Kremikovtzi's BGN 311 million environmental programme is part of the viability plan until the end of 2008. If the company fails to carry it out it will have to return a BGN 180 million state aid and the plant will be closed. The municipality also joined the attacks. According to its long-term plan, Kremikovtzi will become Sofia's City area with residential buildings, business centres, two highways and a metro connection. Given all this, the most likely outcome for the plant is its closure. That is supported by the financial indicators of the company, too. According to the non-consolidated report for the last quarter of 2007, Kremikovtzi's debts to creditors and suppliers exceed BGN 1.6 billion. It traditionally posts losses from core activities. The BGN 119 million profit for 2003 was due to foreign exchange gains. The improved current indicators are the result of rescheduling of debts. The company booked a BGN 35.9 million loss for 2007. However, all this theatre of the absurd may be just a way of exerting pressure for sale of the plant to a particular strategic investor. For nine years 'strategic investors' have been syphoning Kremikovtzi. The first was Valentin Zahariev, a Bulgarian businessman, who bought the steelmaker for USD 1, striking the deal of his life. For six years he managed to pocket about USD 200 million by selling Kremikovtzi products below their cost price to connected companies. In 2005 he got another USD 100 million from the sale of the plant to Pramod Mittal. According to the economy minister, the state has lost some EUR 300-400 million from Kremikovtzi under Mittal's management. Several potential buyers are rumoured now, including Ukrainian billionaire Kostyantin Zhevago and Pramod's brother Lakshmi Mittal.
Source: Pari (06.03.2008)

The Solution – a notified death in the autumn In the current situation the end is clear: a notified death in the beginning of the autumn. This is shown by the financial-economic results of the company. As of the Economy logic Kremikovtzi is into debt company, which has to go bankrupt. The disputable, indisputable and sums for private creditors owed by Kremikovtzi totaled BGN 847 mln four years ago according to experts. According to the unconsolidated report for the last quarter of 2007, the steelmaker has accumulated debts of BGN 1.6 bln. The state, however, is laying low as an eventual shut down of the plant would leave creditors empty handed and this would reflect on the financial stability of the economy. Disturbing for the capability of Kremikovtzi to pay its obligations is the fact that, except in 2000, the company has never reached any effectiveness from basic operations. It is not wondrous that the steel mill records losses from basic operations. For example, the profit in 2003 of BGN 119 mln was as a result of the so-called variations of the exchange rates, currently missing. The improved indices of the general liquidity are due to the transformation of the debts to NEC, Bulgargaz and National Social Security Institute into long-term debts. The spacing out defines the debts owed in more than an year as long-term liabilities. This reclassification leads to improvement of the current indices, although the company recorded a loss of BGN 35.9 mln in 2007.
Source: Pari (06.03.2008)

Kremikovtzi prepares an action plan for ending the crisis Kremikovtzi is considering an action plan for ending the crisis, was made clear after the latest meeting of the company Board of Directors. The plan foresees clients of the steelmaker to open accredited accounts to NEC, Bulgargaz and Bulgarian State Railways (BDZ) for realization of ready products. Currently Kremikovtzi is overrun by output that cannot be realized as BDZ refuses to transport shipments in and out the steel plant. Tons of resources are stockpiles at Port Bourgas and Port Lom. Kremikovtzi does not have enough funds to pay Bulgargaz as well, and this is why the plant operates at minimum capacity. It is essential that the entities on the matter find a solution as soon as possible, commented the Deputy Minister of Economy and Energy Nina Radeva. According to informed sources, the steelmaker has done business mainly with the UK-based Stemcor. The British company has both supplied resources to Kremikovtzi and realized the production of the mill. Stemcor has made the payments to NEC, Bulgargaz and BDZ. Often the payments have been delayed which led to the tension.
Source: Trud (07.03.2008)

NEC, BDZ and Bulgargaz renew kremikovtzi service The state monopoly Bulgargaz and NEC renew the supplies for Kremikovtzi and BDZ starts normal shipments of resources and output to the mill, said the press center of Confederation of Independent Trade Unions in Bulgaria (CITU). The reason is the signed agreement between Minister of Economy and Energy Petar dimitrov and Kremikovtzi representatives late last night. According to CITU information the supply resumption is in relation with the regular pay-off of the debts to the state-owned companies. CITU added that the agreement includes regular salary payments to the workers and employees. Until yesterday the salaries of half of the workers have been paid and the management of Kremikovtzi has engaged to pay the rest until the end of the week. This is why the planned strike is postponed.
Source: Dnevnik (13.03.2008)

Kremikovtzi to pay the state companies through special accounts There is an agreement between the management of Kremikovtzi JSC, the Ministry of Economy and Energy and the state companies, to which the metal works has debts, special bank accounts to be opened to serve the direct payments to National Electricity Company, Bulgargaz holding SPJSC and Bulgarian State Railways SPJSC. As a result of this agreement the state companies agreed to restore the supplies of raw materials for the steel factory. Two days after that credit accounts will be also opened, through which Kremikovtzi will pay until the 15th day its current debts for the delivered electric power, gas and the transport for the raw materials.
Source: mediapool.bg (14.03.2008)

Kremikovtzi went insolvent The Prosecution will seek the people responsible for the bad situation in Kremikovtzi. Yesterday the Minister of Economy and Energy sent the next alarm for frauds by the steelmaker management and Sofia Prosecution Office starts an inspection. There is information for abandonment, signing of unfavorable deals and crimes toward the creditors, shows the letter of Petra Dimitrov. The Work group checking the operations for 2006 and 2007 have reported to the Minister that Kremikovtzi has went insolvent. The Law of Commerce forces the board of directors to face the court and begin a procedure on insolvency. If they do not so it in 30 days, they face forfeit, and even imprisonment. This is the latest signal sent to the Prosecution by the Ministry recently. A few days ago the Minister alarmed the Ministry of Interior that the plant is not secured. The current frauds discovered are known since last year as the Ministry has a representative in the Board of Directors of the plant – Stoyan Pavlov, and the Minister – a deputy in the Consultative Board of Kremikovtzi – Nina Radeva.
Source: Sega (14.03.2008)

Turkish and Swiss examine Kremikovtzi Representatives of Erdemir and Duferco have been at the steelmaker for an inspection last week and have declared that they are “extremely interested” in the plant, said Vassil Yanachkov, head of the Metalitzi Federation at Confederation of Independent Trade Unions in Bulgaria. The Turkish and Swiss investors were interested in the steel plant back in 1999 during the privatization procedures, but they lost the battle with Valentin Zahariev, who privatized it for USD 1 through Daru Metal. Alexander Tomov is again chief of command in Kremikovtzi, said Lyudmil Pavlov, head of national Federation Metallurgy at Confederation of Labor – Podkrepa. According to him this was included into the journal of the meeting on February 4, when Pramod Mittal altered the management of the plant. Guntopali Dzhaganadam replaced Tomov as CEO. After the participants in the meeting signed, the corporate secretary Bozhko Bonev added by hand Tomov’s name as ‘Chief Executive Officer’, said Pavlov. The explanation to the present was that this is Mittal’s order. Lyudmil Pavlov added that the new Board of Director has not yet been registered.
Source: Standart (14.03.2008)

The Bulgarian environment ministry has issued an integrated pollution prevention and control permit to the Pleven district heating utility after the company brought on stream last year a gas-fired turbine. The document certifies that the company is able to meet its greenhouse emissions reduction target. The utility invested some 15 mln euro in the new facility which enabled a cut in heating prices to 63.46 levs/MWh with taxes. Despite the lower heating tariff, the utility said it is still owed 12 mln levs from non-paying customers. In turn, the company owes as much to state-controlled gas supplier Bulgargaz.
Source: Dnevnik (14.03.2008)

Govt to assist Kremikovtzi recovery as co is groomed for sale Bulgaria's economy ministry has accepted a role in whipping steel maker Kremikovtzi into shape as Pramod Mittal, the majority owner of the struggling company, prepares to shop the business to prospective buyers. Deputy economy minister Nina Radeva Thursday said Merrill Lynch, hired by Mittal to advise him on the Kremikovtzi situation, is likely to find by the end of March a strategic investor for the debt-throttled company. In line with the government's commitment, state-controlled utilities Bulgargaz and NEK have resumed supplies to the steel maker while railway carrier BDZ is again accepting Kremikovtzi shipments. The news was announced by the CITUB trade union but was later confirmed by the economy ministry. Kremikovtzi had settled the outstanding wages of half of its workforce by Wednesday and said it was committed to clearing up the remaining arrears by the end of the week. The news prompted the workers to relocated a protest rally planned for Friday in Sofia to the Kremikovtzi site. Ukrainian billionaire Konstantin Zhevago was the only strategic buyer to officially show interest in the Bulgarian steel mill. He even met with prime minister Sergei Stanishev in January. Sources told Dnevnik Mittal did not go for a deal with Zhevago due to the low price offer which was reportedly between 20 and 30 mln euro. Holders of bonds secured with Kremikovtzi assets confirmed that Zhevago is indeed the party with the strongest interest towards a possible sale as he seeks a processing capacity for his iron ore business.
Source: Dnevnik (14.03.2008)

Natural gas will become more expensive by about 13 percent starting April, announced the head of the State Commission for Energy and Water Regulation – Konstantin Shushulov. The hike of 32% demanded by Bulgargaz will not be happen. The Commission will not fulfill the demand and explained that Shushulov sadi that the chances for a 32% hike are zero. He added that the total price increse of natural gas will be calculated for the last three quarters in order to define the new increase of prices.
Source: Darik Radio (18.03.2008)

Creditors seek Kremikovtzi buyer Creditors of Kremikovtzi take the steelmaker in their hands. They will seek a strategic investor to manage it. If such is not found the will be declared insolvent, said Angelo Moskov, owner of QVT fund. The fund is among the four big bondholders of Kremikovtzi. The others are Moor Capital, York Capital and Mars Capital. An official letter sent in the end of March by the biggest creditors of the steelmaker demanded their money ahead of schedule. The letter was sent on March 28 by the guarantee of the emission Law Debenture Trust Corporation plc to the owner of the mill Global Steel Holding Ltd. as issuer of the emission and to Kremikovtzi as a guarantee. According to the letter the emission is to be payed off due to technical violations and debts worth millions to Bulgargaz, NEC and BDZ. Another reason is the concern that some of the securities of the bondholders may suffer after the Post-Privatization Agency won a court case against Kremikovtzi for BGN 239 mln. Most probably the matter concerns the blast-coke production and the continuous casting line, in pawn as guarantee of the loan. Because of the violations the bondholders demand the whole loan plus 1 percent interest which totals about EUR 328 mln. If it is not payd the bondholders may demand the guarantee on the loan – Pramod Mittal shares in the plant plus the main assets on the guarantee.The sale of assets is a step pointed out in the letter of Law Debenture. “We will cooperate with any candidate willing to work for the modernization of Kremikovtzi and reaching the ecological standards”, said Minister of Economy and Energy Petar Dimitrov.
Source: Standart (03.04.2008)

Bulgargaz Holding, the state-controlled gas distributor, is considering the launch of an engineering division for equipment supplies, repairs and expansion of its existing gas infrastructure, said the economy ministry. The board of the company recently authorised chief executive director Lyubomir Denchev to examine the opportunities for the creation of the new division and report back within three months. Bulgargaz subsidiary Bulgartransgas already has a division that handles investment, pre-investment control and equipment supplies.
Source: Dnevnik (09.04.2008)

Kovachki treated Pleven with interests for Easter as well. Heat Supply-Pleven SPJSC offered interest-free period until the end of April. The total debt of Pleven citizens is BGN 9.65 mln. The company hopes to gather at least BGN 4.4 mln in order to pay their debt to Bulgargaz. Due to the warmer weather the heat supply has started to be stopped by stages.
Source: Standart (14.04.2008)

EVN Bulgaria provides U.S. $ 6 million for the full rehabilitation of the transmission network in Plovdiv, which will reduce the losses on the route. The company plans by 2012 to be built a new plant for both generating electricity and heat, replace old substations and the acquisition of those owned by clients, announced Jorg Zolfelner, Chairman of the Board of "Heat-Plovdiv. For three months "Heat" has collected more than U.S. $ 2 million old debts. For the purchase of "Heat" in December 2007 Austrian company E VN heritage debt by 17 900 000 leva to the Bulgargas and 20 700 000 leva obligations to customers without written limitation on debtors. Three months later through share "Alliance correct customers' collection of private subscribers has increased by 9 percent, a business with 10 percent, said Zolfelner.
Source: Monitor (24.04.2008)

Gazprom and Bulgargaz, the Russian and Bulgarian state-controlled gas distributors, will sign an agreement for the creation of a company to design the section of the trans-Black Sea South Stream gas pipeline that will cross Bulgarian territory, Gazprom deputy chairman Alexander Medvedev said. The countries signed in January 2008 an intergovernmental agreement on the project, splitting evenly the project company equity and opting for a Bulgarian domicile.
Source: Dnevnik (25.04.2008)

Kremikovtsi Bankruptcy Demanded Six private companies have demanded a bankruptcy declaration of the Kremikovtsi steel works. Sofia City Court has accepted the claim, it is to appoint two receivers at Kremikovtsi. These are Anna Milenkova and Alexander Georgiev. Kremikovtsi owner Indian tycoon Pramod Mittal cannot sign any deals without their permission. The bankruptcy case will be heard in court on June 17. Kremikovtsi steel works has accumulated debts of over 1.5 billion levs (1euro=1.95levs) mainly to state-owned National Electrical Company (NEC) and Bulgargaz.
Source: Standart (07.05.2008)

Bids for job to advise creation of energy holding due Jun 10 Bulgaria has opened a procedure to select a consultant for the incorporation of an energy holding that will consolidate major state-owned power assets like the Maritsa Iztok mines, the Maritsa Iztok 2 thermal power plant, gas distributor Bulgargaz and the Kozloduy nuclear power plant. The task of the advisor will be to organise and implement the preparatory work, to register the holding and come up with guidelines for the consolidation of the company and for the improvement of the regulatory framework. The eight-month advisory contract will generate a remuneration of 800,000 levs without taxes. The procedure is open to local and otherwise outfits, tie-ins and individuals. The bids should be submitted by June 10. Deloitte Bulgaria was hired by the economy ministry to draw up the energy holding concept. The model for the restructuring of the companies that will be consolidated into the holding was okayed by the government two months ago. Deloitte estimates that the consolidated revenues of the new structure will add up to 1.78 bln euro with assets topping 4 bln euro. The consultant cautions that the lumping together of the earmarked companies will not automatically result in a higher credit rating for the umbrella structure.
Source: Dnevnik (07.05.2008)

Domestic gas prices may increase 15% to 20% from July 1 if international oil prices remain unchanged over the next 20 days, said sources close to Bulgarian state-controlled gas supplier Bulgargaz. Oil topped $126 per barrel last week while the prices at which Bulgargaz suplies local consumers are calculated at a price of $100-$105. The tariff hike proposal will be submitted for review by the opwer regulator by june 12 but it is difficult to say at this point the extact figure that will be proposed as this will unfold over the next 20-25 days, said the company. Domestic gas priced were revised upwards by 13.25% in April this year, an increase that was fairly low compared to the 32% requested by Bulgargaz.
Source: Dnevnik (12.05.2008)

Moody's downgrades Kremikovtzi Moody's Investors Service said it has downgraded the corporate family rating of Kremikovtzi AD, the embattled Bulgarian steel maker, to Ca from Caa3 and the rating on its 325 mln euro senior secured guaranteed notes raised at Bulgaria Steel Finance BV to Ca/LGD 4(53) from Caa3 / LGD 4(53). The outlook is stable. The rating action reflects Kremikovtzi's failure to make a timely payment of interest under its 325 mln euro notes. The assigned LGD rates take into account the remaining uncertainty with respect to the resolution of the situation at the company and a timely implementation of any remedial actions that the management and the principal shareholder may consider, including a potential disposal of the stake by the main shareholder, if providing sufficient cash to repay liabilities, said the rating agency. Moody's noted, that the indentures include a change of control prepayment option. As previously stated, Moody's considers the value of the security (including pledge of accounts, assets and shares) to be insufficient to cover the principal amount raised under the notes.
Source: Dnevnik (14.05.2008)

Zhevago Wants to Rent Kremikovtsi Ukrainian businessman Kostyantin Zhevago does not want to buy Kremikovtsi, but to take the plant on lease," Lyudmil Panov, Chairman of the National Federation "Metallurgy" with the Podkrepa Labor Confederation said yesterday. Mr. Zhevago has close ties with Vorskla Steel Bulgaria Company, representatives of which are expected to present a draft of the lease contract to Bulgaria's Minister of Economy and Energy Petar Dimitrov. If the contract is ratified, Vorskla Steel will become an operator of Kremikovtsi. The lease agreement will be for at least one year, for which period the company takes a commitment to invest nineteen million dollars in the plant. The money will ensure the import of raw materials, necessary for the work of the plant. It will also be used to repay the company's debts, especially the ones to the big state-owned companies, and for payment of the workers' delayed salaries "This is the only way to save Kremikovtsi from bankrupt, said Dr. Konstantin Trenchev, Chairman of the Podkrepa Labor Confederation. In addition, representatives of Vorskla Steel promise to deposit 30 million US dollars at Bulgaria's Ministry of Environment and Waters as a warranty for the willingness of Kremikovtsi management to keep on implementing the plant's environment protection and pollution reduction program. "Kremikovtsi has not exhausted its potential and, given a good management, it can turn into a European steelworks, the workers at which are paid European salaries," Dr. Trenchev said. Last Friday, representatives of the Podkrepa Labor Confederation and the Confederation of the Independent Trade Unions in Bulgaria signed an agreement with representatives of Vorskla Steel, under which the company should invest 100 million US dollars in Kremikovtsi steelworks. Zhevago's men have also promised to pay off the worker's delayed salaries by Friday, as well as their food allowances, the payment of which ceased last November. The debts of Kremikovtsi amount to over 1.2 billion levs, most of them are accumulated to big state-owned companies like the National Electric Company, the national railway carrier BDZ and Bulgargaz. Kremikovtsi's debt to the latter grosses 100 million levs. To operate normally, the steel-maker needs at least eighty million levs a month.
Source: Standart (14.05.2008)

The Ministry of Economy and Energy (MEE) has imported in the Commission for Protection of Competition a notice of its intention to create an energy holding company, including five public companies - Bulgargaz, NEC, Mini Maritsa Iztok, TPP Maritsa Iztok-2 and NPP Kozlodui, announced from the Ministry on Thursday. The preliminary assessment for a possible monopoly is compulsory for merger or acquiring of companies. The submitted file for the creation of future megaholding is the second step in its structuring. Recently, MEE announced a procedure for assigning of public order for choosing a consultant in case of implementing the holding model.
Source: mediapool.bg (23.05.2008)

The Bulgarian economy ministry said Bulgargaz Holding, the Bulgarian state-controlled gas distributor, and the Azerbaijani state gas and oil company will begin negotiations on the delivery of natural gas for the Nabucco pipeline. According to the press release, the delivery of 1 bln cu m to Bulgaria and the region will be negotiated. No one at Bulgargaz could be reached for comment Sun. The European Commission has allowed OMV, Bulgargaz, Transgaz, Botas, MOL and RWE - the company in charge of the Nabucco project, to utilise 50% of the pipeline capacity. Late last week, project company Nabucco Int'l said the cost of the facility may have to be revised upwards by 50% due to higher resource prices.
Source: Dnevnik (02.06.2008)

Three companies are offering their consultancy services for the implementation of a holding model for the restructuring and consolidation of the state energy companies NEC, Bulgargaz, NPP Kozloduy, TPP Maritsa-iztok-2 and Mines Maritsa Iztok SPJSC into a megaholding. This was reported by the Ministry of Economy and Energy a day after the deadline for submission of offers for participation in the contract expired. The candidates are Deloitte Bulgaria, which consulted the Ministry during the previous procedure for preparation of a concept for merger of the five state energy companies. Their participation was expected, given the fact that the government approved the principal scheme of the future energy holding. The other candidates are Bulbrokers Consulting and Euroaudit BX.
Source: mediapool.bg (11.06.2008)

Three consulting companies are in the running to advise the Bulgarian energy ministry on the model for the consolidation of state-owned power assets into a holding structure. The bids handed in by Bulbrokers Consulting, Deloitte Bulgaria and Euroodit BX were officially unsealed on Wednesday. The financial parameters of the offers will be announced on June 13. All state-owned power enterprises - national power grid operator NEK, Bulgargaz Holding, the Maritsa Iztok mines, Maritsa Iztok 2 power plant and the Kozloduy nuclear power plant, will be folded into the new holding structure, creating a concentration of assets valued at over 4 bln euro. The annual revenues of the new company are estimated at 1.8 bln euro. The main tasks that will be entrusted to the selected consultant will include making the necessary preparations for the registration of the holding, coming up with guidelines for the consolidation and transformation of the different assets and recommendations to improve the regulatory framework. The selected advisor will also draw up the blueprint for the financial and investment management of the holding.(
Source: Dnevnik (12.06.2008)

Bulgargaz, the state-controlled gas distributor, has asked the local power regulator to approve an 81.20 lev increase in the domestic price of natural gas to 494.67 levs per 1,000 cu m without taxes. The State Energy and Water Regulatory Commission will review the proposed adjustment which is otherwise scheduled to take effect on July 1. The distributor blamed the need for a tariff adjustment to an increase in the international price of gasoil and fuel oil with 1% and 3% sulphur content, commodities that influence the movement in the domestic tariff.
Source: Dnevnik (17.06.2008)

South Stream to Begin Gas Transfer as of 2013 "Natural gas will start flowing through South Stream pipeline no later than 2013-2014, which is when the whole project will be thoroughly implemented," is the prognosis of the Deputy Chief of Gazprom's International Business Department, Sergei Korovin, who partook yesterday in a video-bridge discussion with Bulgarian media representatives. "We have just begun drawing up the technical and economic feasibility of the project as well as the possible routes the pipeline will take as soon as it reaches Bulgaria. This stage will be complete by 2009, that is why no specific route has yet been decided on," Korovin said. One possibility is the pipeline extends to Austria; another is to stretch all the way down to Italy. Gazprom and Bulgargaz have already assembled working groups to arrange the setting up of a joint venture, which will orchestrate the project. "It is too early to draw any figures or make preliminary calculations about what revenues will Bulgaria get from transit fees," Korovin said, thus, giving his comment on the prognoses by the Bulgarian Ministry of Economy that US$300 million from transit fees will enter the state budget per annum. Korovin also stated, he saw no problem with the fact that the two governments had not yet ratified the intergovernmental agreement on the project. The agreement stipulates a fifty-fifty ownership of the joint venture and according to Korovin, funding and construction services will be provided later on.
Source: Standart (24.06.2008)

Full Power to Bulgaria's Energy Sector After Bulgaria's President convened the Consultative Council on National Security as regards energy policy, Bulgaria's top politicians gave full power to all energy projects. Their goal is to make Bulgaria the Balkans' energy giant. "I am much pleased with the debate on the country's energy security. The prevailing opinion was that the projects South Stream, Nabucco and Bourgas-Alexandroupolis pipeline are of strategic importance for Bulgaria," President Georgi Parvanov said appearing from the four-hour sitting. The President said that there were no risks of an energy crisis in Bulgaria and that in the next few years the country would become an energy center in the region. Economy Minister Petar Dimitrov said there was no risk of power cuts even if the winter comes harsh. President Parvanov also praised our diplomats saying that had been their most successful mission in the energy sector so far. He also said that Bulgaria's energy policy would be an inseparable part of the EU energy strategy and added that Nabucco was a priority project. President Georgi Parvanov, PM Sergey Stanishev, Director of the State Agency for National Security, Petko Sertov, ministers and MPs, registered a delay in the realization of the NPP Belene and South Stream energy projects. As regards the construction of new capacities on the site of NPP Kozloduy, President Parvanov gave the floor to PM Stanishev because, he said, the Prime Minister was better acquainted with the issue. The two demonstrated unanimity and accord of opinions. "There should not be party struggle and political intrigues when it comes to the energy security of the country," Mr. Stanishev said. He said additional capacities could be built on the site of NPP Kozloduy. To his words, Bulgaria will assume a leading role in the transit of natural gas with a total of ten or twelve percent of the natural gas flow to the EU passing through its territory. President Parvanov also said he would inform the Citizens for European Development of Bulgaria Movement (GERB) and the rest of the political parties that are not represented in Plenary Hall about the recent energy projects, so that the projects could receive maximum social support. Minister of Economy and Energy Petar Dimitrov said that the South Stream project would be ratified by the Government tomorrow. He added that big investors were interested in the construction of the extra capacities of NPP Kozloduy. "A seventh reactor of NPP Kozloduy will come quite good, but this will mean that we will have to give up our claims for the reopening of reactors 3 and 4," the minister said.
Source: Standart (25.06.2008)

After an open procedure for assigning a public order and after Ministry of Economy and Energy made a decision, Deloitte Bulgaria SPLTD was chosen for the consultant of the Ministry on the foundation of Bulgarian Energy Holding, said the press center of MEE. The candidates, which applied offers in time for the public order “Consultant services for realization of holding model for re-structuring and consolidation of the energy company with sole capital owner – the State”, were three - Bulbrokers Consulting SPLTD, Deloitte Bulgaria SPLTD and Euroaudit BX Consortium.
Source: Agency Focus (27.06.2008)

Deloitte Consults Bulgarian Government on Energy Holding Delloit Bulgaria Ltd has been selected as a consultant on the establishment of an energy holding, sources from the Ministry of Economy told The Standart. The other candidates were Bulbrokers Consulting and the consortium EuroAudit BX. EuroAudit were ousted from the tender because their offer was incomplete; Bulbrokers' offer was for 725,000 levs (VAT excluded) and Delloit - 736,000 levs (VAT excluded). The energy holding will unite five state-run ventures.
Source: Standart (27.06.2008)

The economy ministry said it has picked Deloitte Bulgaria to advise the creation of a holding structure for major state-owned power assets. The two other candidates that were eyeing the contract were Bulbrokers Consulting and Evroodit BX. The latter company was barred from the second phase of the procedure - the opening of the financial proposals, due to omissions and non-compliance with requirements in the public procurement procedure.
Source: Dnevnik (27.06.2008)

CPC: The energy holding does not threaten the competition The Commission for Protection of Competition decided that the establishment of the Bulgarian Energy Holding, with the purpose of capital participation and/or management of Bulgargaz holding SPJSC, National Electricity Company (NEK) SPJSC, Nuclear Power Plant Kozloduy SPJSC, Thermo-electric power plant Maritsa-iztok-2 SPJSC and Mines Maritsa Iztok SPJSC, would not be concentration of economic activity. The companies would preserve their independence after the establishment, while the Bulgarian Energy Holding would not perform production ot trade activities. Each of the companies would be able to define its market behaviour, it would develop and introduce operational strategies in order to meet the financial goals, put by the holding, would preserve the individually issued licenses and would remain independent, by the other companies and the holding, economic unit.
Source: Darik Radio (01.07.2008)

The Commission for Protection of Competition has permitted the structuring of the Bulgarian Energy Holding with the capital of Bulgargaz Holding, National Electricity Company, Nuclear Power Plant Kozloduy SPJSC, TPP Maritsa-iztok-2 SPJSC and Mines Maritsa Iztok SPJSC. It was determined that the creation of mega-holding is not a concentration of business, but represents an internal restructuring of the state companies and that is why it is not covered by the Law on Protection of Competition.
Source: mediapool.bg (02.07.2008)

Kremikovtzi will operate with materials of the client Kremikovtzi will produce with materials of ArcelorMittal, according to the plan of the Luxembourgh-based company of the bigger brother of the current owner Pramod – Lakshmi Mittal. After the declarement of bankruptcy, ArcelorMittal plans to supply raw materials, to trade in the output and to control the spending of its invested money. A team of experts of Lakshmi Mittal would provide expert and technical aid for the management of the steelmaker. The management would be undertaken by the court and assignees of bankruptcy, as planned during insolvency procedures, said Volker Schwich, vice president projects for Central and Eastern Europe at ArcelorMittal.
Source: Standart (04.07.2008)

The chief executive officer of Bulgargaz Holding Lyubomir Denchev and Jean-Francois Sireli, president and CEO of the French company Gaz de France signed on Thursday a Memorandum for strategic partnership for the development of the market and securing the supply in the field of natural gas. The signing of the memorandum was expected more than a year ago when the initial talks began between the two gas companies. The talks became more frequent in February 2008 after the French company had joined the South flow in which Bulgargaz also participates.
Source: mediapool.bg (04.07.2008)

Bulgargaz cuts supplies for Kremikovtzi Bulgargaz reduced the amount of natural gas supplies to Bulgaria's mettalurgical plant Kremikovtzi. The state-owned gas transmission company decided on this move following a steady rise in Kremikovtzi's debts, Bulgargaz executive director Dimitar Gogov said. ArcelorMittal has started negotiations with NEC, Bulargaz and BDZ. ‘I have met with the executives of the three companies because the supply should not be cut during the bankruptcy procedure. The situation at Kremikovtzi is really critical, its financial condition is very close to bankruptcy’, Volker Schwich, vice president projects for Central and Eastern Europe at ArcelorMittal, said. According to him the management of Kremikovtzi cannot manage it in the state of overindebtedness. This is why ArcelorMittal now is only negotiating with the Government, which is a sharehodler in the steelmaker, and with the big creditors, which are also state companies. ‘Thanks to the due diligence we have an idea of the plants’s debts, but we cannot comment on them until a court decision comes’, Schwich said.
Source: Pari (04.07.2008)

Bulgarian MPs voted on the list of companies prohibited from privatisation, which includes 66 healthcare institutions, as well as companies with over 50% state participation. The list includes NPP Kozloduy, NEK, Bulgargaz, the National Sports Base, etc. Parliament also adopted the requirement that following the privatisation of a healthcare institution, it still has to offer the minimum range of services described in the National Health Card. Thus, the privatised institution will have to offer medical services adapted to the needs of the population in the respective region.
Source: Pari (10.07.2008)

18 members of the Bulgargaz holding Board of Directors have been given salaries for total of BGN 666 thous last year, which is BGN 55 thous per month. This was presented in the financial report of the gas holding and its 3 subsidiaries. Among the members of the management boards of the four companies are deputy ministers, counsellors of the PM and the Minister of Economy, even municipal councillors. 2007 is the first whole year of the newly-formed Bulgargaz holding SPJSC.
Source: 24 chasa (21.07.2008)

Cheaper gas from South Stream Gas pipeline South Stream would provide cheaper gas and independence from the supply from other countries for the whole EU, said Minister of Economy and energy dyring a parliament discussion about the pipeline. He pointed out that it would supply gas from Russia for Italy and would reach Bulgaria from the bed of the Black Sea. Bulgaria may earn between USD 250 and 400 mln per year from transit charges, according to data fro the economic Ministry. The whole construction work on the pipeline is expected to be between USD 7 and 10 bln.
Source: Novinar (24.07.2008)

Bulgargaz, the state-controlled natural gas distributor, has warned it will turn the tap on supplies to the heating utilities in Sofia, Burgas, Vratsa, Pleven and Shumen unless they settle their outstanding bills under the timetable set by the gas distributor. The gas distributor refused to say how much it is owed by the non-paying utilities. It warned that the current situation may disrupt gas supplies during the upcoming winter period. On Monday, Petko Milevski, executive director of Toplofikacia Sofia, said the company's current debt to Bulgargaz was 80 mln levs while its total debt was 116 mln. In September 2007, Bulgargaz and Toplofikacia Sofia rescheduled the payment of 150 mln levs over a six-year period. The Burgas utility is understood to have 13 mln levs in outstanding payments to Bulgargaz. The office of local businessman Hristo Kovachki, owner of the heating utilities in Vratsa, Burgas and Pleven said the companies are ready to negotiate new payment timetables. Both the utilities and Bulgargaz place the responsibility for the pricing environment and the indebtedness of the sector on the power regulator. The regulator has cut sharply all gas tariff hikes proposed by Bulgargaz since late 2007.
Source: Dnevnik (24.07.2008)

9 banks keen to advise Burgas-Alexandroupolis pipeline project Nine banks have handed in their credentials to advise the Burgas-Alexandroupolis oil pipeline project, said Burgas-Alexandroupolis BG, the outfit in charge of Bulgaria's share of the venture. The advisory contract will be contested by France's Calyon, Societe Generale, BNP Paribas, ING, Project Finance Solutions, RBS, Lazard, Citi Group and Gazprombank. The selected consultant will use the technical and economic feasibility studies as a baseline to draw up the documents needed to apply for loan financing and research the market interest towards the project, said Stefan Gunchev from the regional development ministry. The official said the advisor is expected to be picked in August. Germany's ILF should update the feasibility study for the project by the end of 2008. The facility will cost 1.5 bln euro, judging by statements from Nikolai Seryogin, member of the supervisory board of the international project company in charge of the pipeline. The figure is significantly higher than the initial price tag that was seen at around 800 mln euro. The shareholders in the project company will contribute 30% of the necessary financing, securing the remainder from external sources. Russia's Transneft, Rosneft and Gazpromneft control a combined 51% in the project company. Bulgaria and Greece each have 24%. Bulgargaz and Technoexportstroy, the co-owners of Burgas-Alexandroupolis BG, will have to raise 110 mln euro in funding. The Russian media have reported that problems with the taking of private land for the project will cause the pipeline to be rerouted on Bulgarian territory. The Bulgarian side had previously reported no difficulties with the expropriation of private land.
Source: Dnevnik (29.07.2008)

South Stream Gas Pipeline Project to Require USA 20 B The project for the construction of the gas pipeline "South Stream" is going to require investments of over USD 20 B, instead of USD 10 M as it was previously calculated from estimates in the beginning of 2008. This was announced by the Russian Energy Minister Sergey Shmatko cited by Russian press publications. According to experts, this double increase of the necessary investment amount was possibly going to add additional obstacles for the realization of the gas pipeline project. They have stated that the competitor "Nabucco" project was going to be with 30% to 40% cheaper, which would make it more feasible.
Source: Darik Radio (31.07.2008)

Bulgargaz says may cut gas supplies to struggling steel maker Kremikovtzi Bulgargaz, the state-controlled gas distributor, has warned Kremikovtzi it will discontinue supplies August 1 unless the debt-ridden steel maker pays its 7.5 mln lev July gas bill, said Lyudmil Pavlova, leader of the Podkrepa trade union at the plant. His statement disproved earlier reports that Bulgargaz had already stopped piping gas to the steel maker on Wednesday morning. In related news, 22 operative managers and directors at the steel plant released a declaration addressed to the prime minister and the ministers of economy and transport., voicing their outrage at the genocide policy towards the company pursued by Bulgargaz and state railways BDZ. The declaration further calls out the government on its failure to take a clear stand on the plans for the company's future. The press office of the steel maker said the management was aware of the declaration but did not say if they support it or not. Economy minister Petar Dimitrov Wednesday reiterated that he will not allow a shutdown of the plant. Arcelor Mittal, the Indian steel maker in the mix of potential buyers, has broken off its tolling agreement with Kremikovtzi (after failing to square positions with the government) but yesterday reaffirmed its interest in the acquisition of the company.
Source: Dnevnik (31.07.2008)

Bulgaria Energy Minister: Kremikovtsi Will Continue to Receive Gas Supply The gas supply for the steel mill "Kremikovtsi" would not be lowered under the ctiritcal minimum as promised by Bulgarian Energy and Economy Minister Petar Dimitrov Thursday. Wednesday the company "Bulgargaz" warned the steel mill that if they did not receive the amount of BGN 7,5 M from Kremikovtsi by 4:00 pm Thursday, they would terminate the gas supply to the mill. The above amount is the mill's dept towards "Bulgargaz" for the month of July. At the moment, the gas supply company is still waiting to receive an offer from "Kremikovtsi's" management proposing a solution of the problem. From "Bulgaragaz" have been firm that they do not wish to stop the gas supply to the mill since "Kremikovtsi" was their biggest customer. At the same time, the trade unions from "Kremikovtsi" have informed that there was no payment to "Bulgargaz" yet, but they believed that the gas company was serious enough to keep the gas supply at the critical minimum and to negotiate installment payments. Liyudmil Pavlov, leader of the "Podkrepa" trade union at the mill further explained before Darik radio that "Kremikovtsi's" management was still awaiting a meeting with Prime Minister Sergey Stanishev. It is expected that at the meeting Stanishev would announce the State's decision regarding the mill's future. The trade unions at the mill have stated once again that they supported declaring the mill insolvent and executing a rehabilitation plan, offered so far only by the Ukrainian company "Vorskla Steel" owned by Konstantin Zhevago. The Indian businessman Lakshmi Mittal and the Ukrainian Konstantin Zhevago have been competing for months with offers to purchase the steel mill. The insolvency claim has been filed by one of Zhevago's companies along with several other businesses while the Sofia District Court announced Tuesday that they would make the decision about the insolvency of Bulgaria's infamous steel mill in 14 days.
Source: Darik Radio (01.08.2008)

Kremikovtzi gas supplies safe Bulgargaz, the Bulgarian state-controlled gas distributor, said on Thursday it will hold off from cutting gas supplies to ailing steel maker Kremikovtzi after the country's economy minister publicly opposed the move. A day earlier, trade unionists said the gas distributor was preparing to stop gas supplies from Aug 1. Bulgargaz will continue to pump only the technological minimum until the appointed administrators take charge of the company. The steel plant owes 38 mln levs in unpaid bills to Bulgargaz.
Source: Dnevnik (01.08.2008)

Trade was weak on the last day of the week, with the blue-chip Sofix once again falling below 1,000 points. The index closed at 1,002.95 points, down by 1.12%. The broader BG40 of the most traded stocks dipped by 2.24% to 247.33 points. BGREIT of real estate investment trusts fell by 0.62% to 97.84 points, while BGTR30 of the best performers in total return fell by 1.33% to 656.64 points. Shares of Lomsko Pivo lost 8.33% to BGN 2.74. Shares of Real Estate Investment Fund rose by 1.93% to BGN 1.53%.
Source: Pari (04.08.2008)

Kremikovtzi could be shut down by stages In case the Court does not make a decision whether Kremikovtzi would be declared insolvent, there is a high probability that steelmaker’s operations are shut down by stages. A meeting is expected to be called in the next days so that it is decided which operations would be ceased first so that it would not lead to emergencies. Because of the cut supply by Bulgargaz, the gas is insufficient for production operations and is enough only to keep the furnaces warm. Kremikovtzi can continue its existance only in case fresh finances and a new investor enter the troubled steel plant. However, this could not happen before the court comes out with a decision on the insolvency case. It is expected to be made within a week.
Source: Novinar (05.08.2008)

Bulgaria's Economy Minister: Kremikovtsi's Fate Is up to the State "Choosing the future owner of Kremikovtsi Steelworks is entirely up to the Bulgarian state," Bulgaria's Minister Economy and Energy Petar Dimitrov said with the Bulgarian National Television (BNT). "The reason is that the Bulgarian state is the smelter's largest creditor. Kremikovtsi owes the state 900 million levs," he explained. The amount the treasury could claim back is 400 million levs. This represents the debt it remitted prior to Kremikovtsi's privatization in return to a commitment for heavy investing as stipulated in the vitality plan, which, though, no one has ever even cared to follow. The European Commission defines this very 400 million levs as "illegal state aid" which must reenter the Kremikovtsi's bank accounts should the vitality plan remain unimplemented. Thus, when insolvency is announced by the court, which is expected to happen within one week, the state will automatically top the list of creditors. The state aid plus the interests amounts to 700 million levs. Apart from these Kremikovtsi is in debt to Bulgargaz, the State Railways and the National Electric Company as well as to the State Fund for Reconstruction and Development and the total sum of the smelter's liabilities reaches up to about 900 million levs, according to Minister Dimitrov. "The chief creditor is undoubtedly the Bulgarian state. This is the reason why the candidate buyers take no actions before making sure they have the support of the state," Dimitrov said. He was reportedly astonished with the managers and the trade unions that attempted to indirectly exert pressure on the state to take side and single out the favourite candidate buyer. "The state will not be subdued, besides the bidders should compete for the steel works," the Minister said.
Source: Standart (05.08.2008)

Kremikovtzi debt to Bulgarian govt may reach 900 mln levs The money that debt-ridden steel maker Kremikovtzi owes to the Bulgarian government may top 900 mln levs, elevating the state to the top of the creditors' list, economy minister Petar Dimitrov said on Monday. The steel maker owes some 200 mln levs in unpaid bills to gas distributor Bulgargaz, state railway operator BDZ and electric utility NEK, said Dimitrov. In addition, the government may be in position to make a 400 mln lev claim against the plant. The amount was made available to the company prior to its privatisation. The management's subsequent failure to execute a viability program renders the lifeline inadmissible under EU rules. The amount now stands at around 700 mln levs with interest, said Dimitrov. With claims of around 900 mln levs in total, the government will also have a leading role in the selection of a new owner for the struggling steel maker, said the government official. The total liabilities of the company are estimated at around 2.5 bln levs. The economy ministry has reiterated that a court ruling on an insolvency case against Kremikovtzi should be handed down within a week. That will be followed by the appointment of interim receivers and the drawing up of the list of creditors. The meeting of the creditors will likely take place in September or early October, said Dimitrov. 'The government is undoubtedly the main creditor,' said the economy minister. 'To my surprise both the management and the receivers are exerting indirect pressure on the government to take sides.' After Indian steel maker Arcelor Mittal confirmed last week its interest in Kremikovtzi, the bonds secured with assets of the plant ticked up on Monday.
Source: Dnevnik (05.08.2008)

Kremikovtsi Bankrupt since 2006 Kremikovtsi has been insolvent since December 31, 2005, ruled Sofia City Court yesterday. There are plenty of indicators pointing out the progressive worsening of the steel works' economic condition. The liabilities increase every year, the enterprise's profitability decreases and by December 31, 2007 the booked account payables amounted to BGN 1,629,709,000. All these facts tell of the actions taken by the management of the debtor enterprise that for sure do not lead to successful development of the enterprise, the court ruling reads. Ana Milenkova has been appointed acting assignee in bankruptcy. She was nominated by Rua Invest &Trading connected to Kostyantin Zhevago. The company was the first to demand declaration of bankruptcy for Kremikovtsi steel works. The creditors' meeting is fixed for September 26th, 2008. The bondholders from London, lay one of the largest claims at the cost of EUR 325 million. The Bulgaria state will probably be one of Kremikovtsi's creditors. When Kremikovtsi was privatized the state cancelled BGN 400 million of debts to the steel works. The European Commission declared them for a wrongful state aid and that Kremikovtsi should pay the aid back if it did not implement the viability plans. The total state loan to Kremikovtsi, including the steel mill's debts to Bulgargas, the National Electrical Company and the state Railways amounts to BGN 900 million. We are content with the ruling of Sofia City Court to declare Kremikovtsi bankrupt, reported from Bulgaria's Ministry of Energy and Economy. They believe the country ruling will give opportunity to Kremikovtsi to quickly restore its activity so that the productivity and the jobs are preserved. We will comment on the ruling after getting familiar wit it, said some from Kremikovtsi.
Source: Standart (07.08.2008)

Since aqcuiring 100 percent of the assets of Heat Supply-Plovdiv SPJSC in December 2007, EVN Bulgaria has decreased the operative debt to Bulgargaz holding SPJS by BGN 3.4 mln. The debt to Bulgargaz reached BGN 17.9 mln in the end of 2007. Meanwhile the debt was reduced to BGN 14.5 mln. The most important move in this direction was the implication of the ‘Alliance with the correct customer’ project, which led to the collection of BGN 2.1 mln for covering some of the liabilities.
Source: Monitor (08.08.2008)

Bulgaria's Supreme Administrative Procuracy and the National Security State Agency (NSSA) have been investigating this past month the procedures for the collection of transit fees paid by Russian gas monopoly Gazprom. The check aims to establish the legality of the transit fees for gas pumped to Greece and Turkey pocketed by Bulgargaz trading unit instead of Bulgartransgaz and if the scheme is prone to abuse. Both of the cited companies are subsidiaries of state-controlled gas distributor Bulgargaz Holding. The probe was launched in response to a request from Bulgartransgaz executive director Angel Semerdjiev that the authorities ascertain the energy legislation and the gas directive were being upheld in the way that the transit fees are collected. The prosecution authorities confirmed that such an investigation was in progress. A NSSA spokesperson said the agency was not involved in the case in any capacity.
Source: Dnevnik (11.08.2008)

The Bulgarian energy ministry will decide whether Bulgargaz or Bultransgaz will collect the fees for the transiting of Russian natural gas through the country's territory, the chief of the nation's power regulator told Dnevnik on Tuesday. The State Energy and Water Regulatory Commission (SEWRC) has sent a letter to the energy ministry, insisting that the fees are pocketed by the transmission unit and that the trader Bulgargaz would not be a loss-maker at the prices that entered into force on July 1 when natural gas appreciated by 5% instead of the 19.6% proposed by Bulgargaz, said SEWRC chairman Konstantin Shushulov.
Source: Dnevnik (13.08.2008)

A working group set up by the Bulgarian economy ministry to investigate the handling of gas transit fees by Bulgargaz and Bulgartransgaz has recommended a regulatory penalty for the two companies for breaches of their respective licences, sources from the working group told Dnevnik. The check was ordered by energy minister Petar Dimitrov after Bulgartransgaz executive director Angel Semerdjiev asked the prosecution authorities to investigate if the agreement between trader company Bulgargaz and the transmission company on the collection and distribution of fees paid by Russia's Gazprom for the transiting of its gas via Bulgarian territory violated the energy law. The agreement puts the trader in charge of the collection of the fees instead of the transmission company as is required by the gas directive.
Source: Dnevnik (18.08.2008)

Zhevago team prepares to take over Kremikovtzi's operative management Vorskla Steel, controlled by Ukrainian billionaire Konstaitn Zhevago, is preparing to join the operative management of debt-ridden Bulgarian steel maker Kremikovtzi, said Viktor Demyanyuk, Zhevago's reprehensive in Bulgaria. 'A meeting is scheduled on Monday with executives from [gas supplier] Bulgargaz, [power utility] NEK and [railway carrier] BDZ to negotiate a repayment scheme [for Kremikovtzi's debts]. Consultants will be hired immediately in connection with the environmental program that will have to be implemented,' said Demyanyuk. In July, Vorskla Steel signed a tolling agreement with Kremikovtzi. Some of the managers of the Bulgarian company later said the agreement was signed under coercion and notified the prosecution authorities. Although the agreement was declared null and void by the managers that opposed it, Vorskla continued to supply input materials to Kremikovtzi with the management of the Bulgarian steel maker constantly delaying the recognition of the arrangement by suggesting a series of annexes. Last Friday, Demyanyuk said the plant will produce 60,000 to 70,000 tons of steel per month in the first 60 days. An upgrade that will be launched immediately will later increase the output to 95,000-105,000 tons per month. Kremikovtzi receiver Ana Milenkova said she has approved for implementation neither the tolling agreement with Vorskla Steel nor that with India's Arcelor Mittal 'There are two contracts and both of them should be honored,' she said.
Source: Dnevnik (18.08.2008)

Kremikovtsi Steelworks to Resume Production on Credit Kremikovtsi Steelworks will resume its manufacturing process thanks to a loan in gas. The company's temporary assignee in bankruptcy Anna Milenkova and a representative of Kostyantin Zhevago - Viktor Demyanuk held talks about recommencing the gas supply for Kremikovtsi with Bulgargaz yesterday. Zhevago's reps said they would pay Kremikovtsi's current bills, but not past ones, which size up to tens of millions of levs (1 euro = 1.95 lev). For the sake of giving a vague idea of the total amount of Kremikovtsi's liabilities, it is enough to only mention the figure of the gas bill for July alone: 7,5 million levs. And the plant was not even working! The anticipated decision of the state-owned Bulgargaz whether or not the supply of gas for Kremikovtsi will resume, should be announced today. Up to now, the gas giant would furnish so much as 20 thousand cubic metres of gas to keep the smelters hot. We need 25-30 cubic metres to restart production, Kremikovtsi trade unionists announced. Negotiations the National Electrical Company (NEC) and the Bulgarian State Railway Company (BDZ) over the possibility of resumption of the raw materials supply to Kremikovtsi as well as the revision of the payment conditions under certain contracts are being held concurrently.
Source: Standart (21.08.2008)

Kremikovtzi restores operation within days Within a few days the normal gas supply to Kremikovtzi would be restored. The assignee on bankruptcy Anna Milenkova, the management of Bulgargaz and of the Ukraine-based Vorskla Steel have negotiated that the gas company raise the supply to the plant to 30,000 cub. m. per hour, said the head of Podkrepa at the plant Lyudmil Pavlov. Currently Bulgargaz supplies 20,000 cub.m./h to Kremikovtzi due to unpaid debts. The way to pay the old debts of the steelmaker to the gas monopoly have to be decided today. The operative payments would be made normally and within the deadlines, the company said. As to date, the debts to Bulgargaz are about BGN 40 mln. So far the quantity was enough only to keep the furnaces warm, but not enough for normal operations leading to profit, representatives of the steelmaker commented. Currently, a list of the creditors, among which the State is the biggest with BGN 900 mln, is being prepared. On September 26 a meeting between the creditors would take place in order to elect a permanent asignee and an operator company, which would manage the steel mill. The chosen company would be able to manage the raw materials and to allocate the output earnings to pay the debts to the creditors, the wages of the personnel and for investmenmts in the ecology programme of the plant.
Source: Novinar (25.08.2008)

Sopot and Hisar will be supplied with gas by the end of next year by Black Sea Technological Company JSC. The Varna-based company expects to receive an official license for both municipalities after the meeting of SCEWR on Monday. The gasification of the two municipalities will be in two stages. In the first 5 years the supply will be with tanks, which will deliver gas to the terminal where the blue fuel will departs to consumers. In the second stage the gas network will be connected with the network of Bulgargaz in the area between the Graf Ignatievo and Stryama. The total investment for the two municipalities will exceed EUR 10 million, but the company assesses the region as very promising and fast-developing.
Source: Darik Radio (27.08.2008)

Kremikovtzi Gas Supply Is at Full Capacity Starting Wednesday, the steel mill "Kremikovtzi" is receiving the full volume of necessary natural gas - 30,000 cubic meters per hour, as confirmed by the trade unions at the mill. The company of the Ukrainian businessman Konstantin Zhevago, "Vorskla Steel", which has a contract to manufacture steel with own materials, has wired BGN 3 M to "Bulgargaz", which cover part of the mill's dept for the use of natural gas. In the next two months "Vorskla Steel" intends to fully reinstate the "Kremikovtzi" production capacity and to reach 60,000 tons of production, which, according to plans, would later go up to 100,000 tons. "Bulgargaz", however, have not yet confirmed the information about the BGN 3 M transfer. They have stated that by the end of the week they would issue an official press release regarding their agreement with "Kremikovtzi" and "Vorskla Steel." Until now the gas supply to the mill was reduced down to 20,000 cubic meters per hour due the mill's unpaid depts.
Source: Darik Radio (27.08.2008)

Kremikovtzi Gas Supply Is at Full Capacity Starting Wednesday, the steel mill "Kremikovtzi" is receiving the full volume of necessary natural gas - 30,000 cubic meters per hour, as confirmed by the trade unions at the mill. The company of the Ukrainian businessman Konstantin Zhevago, "Vorskla Steel", which has a contract to manufacture steel with own materials, has wired BGN 3 M to "Bulgargaz", which cover part of the mill's dept for the use of natural gas. In the next two months "Vorskla Steel" intends to fully reinstate the "Kremikovtzi" production capacity and to reach 60,000 tons of production, which, according to plans, would later go up to 100,000 tons. "Bulgargaz", however, have not yet confirmed the information about the BGN 3 M transfer. They have stated that by the end of the week they would issue an official press release regarding their agreement with "Kremikovtzi" and "Vorskla Steel." Until now the gas supply to the mill was reduced down to 20,000 cubic meters per hour due the mill's unpaid depts.
Source: Darik Radio (28.08.2008)

The natural gas supply for the heating utilities in Sofia, Pleven, Bourgas and Vratsa is going to be gradually reduced beginning September 1, 2008 due to the above companies' unpaid debts, according to the company supplier "Bulgargaz." The supplier data shows that the heating utilities in those four cities now owe a total of over BGN 235 M. "Bulgargaz" further reminds that a month ago they have informed in writing their debtors as well as the governors and the mayors of the four cities that a reduction in the natural gas supply was forthcoming. Despite that, the heating utilities have not undertaken any measures to repay the owed amounts. The heating utilities such as those in Varna and Rousse, who have paid their bills regularly would not encounter any problems with the supply of natural gas, the supplier further confirmed.
Source: Darik Radio (29.08.2008)

South Stream Route to Be Laid out in Autumn "The final layout research for South Stream pipeline will begin this autumn," deputy head of the Environment department of the Peter Gaz-Moscow said during a videoconference yesterday. A comprehensive program for environmental safety of the pipeline bed will be developed simultaneously. During both the South Stream research and construction works, the contractors will be able to draw experience from the already implemented similar project called Blue Stream, which runs between Russia and Turkey. During the videoconference, the Chairman of the Bulgarian party Green Bulgaria, Aleksander Karakachanov proposed the setting up of a fund for improvement of the environmental situation along the Black Sea coast. Karakachanov added his party would support the South Stream project as long as it is implemented according to all environmental requirements.
Source: Standart (29.08.2008)

State-controlled gas distributor Bulgargaz has requested a 30% price increase from October 1. On Monday, the company is due to power down the gas supplies to the district heating companies in Sofia, Burgas, Pleven and Vratsa over unpaid bills. According to the heating utilities, the pricing policy of the Bulgarian power regulator is to blame for the poor financial state of the companies in the sector. The regulator has approved a series of gas tariff hikes while the price of the heating is adjusted only once a year. The power regulator said t was not likely that it would approve the requested 30% tariff hike unless Bulgargaz argues a very convincing case.
Source: Dnevnik (01.09.2008)

Bulgaria was on the brink of an unprecedented gas crisis because of heating companies’ (the Toplofikatsiya utilities around the country) unpaid debts, the state-owned gas company Bulgargaz said on September 3. Bulgargaz was urgently trying to collect at least 80 million leva from its debtors, the Sofia, Pleven, Vratsa and Bourgas heating companies, to pay Russian gas provider Gazprom. The companies’ debts to Bulgargaz amounted to 230 million leva. If the company failed to collect its clients’ unpaid debts, the country might have to buckle down on gas usage, private broadcaster bTV said. Bulgargaz lacked the floating capital to pay Gazprom. Although the heating companies themselves could cut off gas consumption, the measure was not efficient enough and would not prevent a gas crisis, bTV wrote on its website. Bulgargaz executive director Dimitar Gogov told bTV that the 80 million leva was the amount the company “needed to get a breath of air, so to say”. Gas provision security was no longer problem only for the debtors, but for all consumers in the country. “It would not only be the paying customers of the heating companies who would be affected, but also customers in the economic and industry sectors – all gas consumers would be affected,” Gogov said. Toplofikatsiya Sofia was Bulgargaz’s greatest debtor. Sofia city hall, which is a majority shareholder in the company, was seeking for a way to help the debt to be paid off, bTV said. Among the possibilities was taking out a loan or increasing the company’s capital.
Source: Insurance.bg (05.09.2008)

"Bulgartabac's cigarette plants in Sofia and Blagoevgrad will be sold separately on the stock market, but on one condition: that the buyers are strategic investors," Bulgarian Minister of Economy and Energy Petar Dimitrov told The Standart yesterday. "This is the only possible way to denationalize Bulgartabac Holding under the adopted strategy," he said. "We have still not decided yet on the buyer of Kremikovtsi Steelworks," Dimitrov added. Who is going to get Kremikovtsi ownership will be the state's call, since it is the company' largest creditor. The first general meeting of the creditors of the steel company will be summoned on Septermber 26 when they will have to choose the next owner. But before that, all of them have to declare that the company owes them money to be included in the list of the assignee in bankruptcy and approved by the court. Bulgaria already claimed back 700 million levs (1 euro = 1.95 levs) of principal amount and interests, which the company, up to this point, has been considering as a state aid. And that's not all: the smelter must also repay old liabilities to the state-owned enterprises such as the National Electrical Company, Bulgargaz and the State Railway Company (BDZ).
Source: Standart (08.09.2008)

Bulgargaz presses for 36.5 pct price hike Gas retailer Bulgargaz said it has asked for the regulator’s nod to put up natural gas prices by 36.51 pct in the fourth quarter of the year. It said the demand was prompted by soaring alternative fuel prices, the rising U.S. dollar and the lower third-quarter price approved by the regulator. The watchdog can either okay or reduce the price hike request.
Source: Dnevnik (11.09.2008)

A hundred creditors are all agog on Kremikovtzi Several dozens, if not thousands, appeared to be the creditors of Kremikovtzi. The deadline for application of claims by creditors of the steelmaker was yesterday, September 11. Verifications with the account reports of Kremikovtzi are already being made in order to find out whether the applied claims are for realistic sums. After that the court would decree on whether the steel plant has to pay them, said Lyudmil pavlov, head of the Podkrepa union at Kremikovtzi. The state is expected to be the major creditor after the claim from last year for BGN 700 mln. The sum represents remitted debt before the privatization, which is state aid and Kremikovtzi has to return the funds. BGN 90 mln more is the debt to National Electricity Company (NEK). BDZ and Bulgargaz also have vast amounts of money to take. The gas holding said that no claim has been applied. In stead, Bulgargaz negotiates with the assignee on bankruptcy of the mill for the payment of the debt. Kremikovtzi bondholders won a legal case back in May, when the English Supreme Court decreed that Kremikovtzi has to pay them the bond loan of EUR 325 mln. It is reported that Lakshmi Mittal has not given Kremikovtzi up yet. His company ArcelorMittal may buy Kremikovtzi’s debt to the Black Sea Trade and Development Bank of EUR 18 mln, and thus enter the ranks of the creditors.
Source: Standart (12.09.2008)

So far the amount of gas delivered to Heat Supply-Sofia JSC has not changed, but it is possible to be reduced as early as this week. This was stated by the executive director of Bulgargas Dimitar Gogov. Gogov said that there is new payment schedule for the Heat Supply and still it is fulfilled. If we see that Heat Supply-Sofia is not fair to us, we will begin to reduce the gas supply quantity, said Gogov.
Source: Monitor (16.09.2008)

The debt of Heat Supply-Plovdiv JSC to Bulgargaz is BGN 14,359 million. At the end of 2007 the liabilities to Bulgargaz were BGN 17.9 million. The heat company intends to continue to pay the accumulated debts correctly. This will help the recovery of the company and will allow Bulgargaz to carry out regular supplies of fuel.
Source: Banker (17.09.2008)

Energy companies under the control of Bulgargaz Bulgargaz will be the top company in the future Bulgarian Energy Holding SPJSC (BEH SPJSC). The rest of the state-owned companies to be included in the holding will be NEC, Nuclear Power Plant Kozloduy, TPP Maritsa East 2 and Mines Maritsa Iztok. The new company will be based on Bulgargaz as the name and basic line of business will be altered. BEH will remain a joint stock company, 100% state-owned. Capital shares of NEC, TPP Maritsa East 2 and Mines Maritsa Iztok will be transferred into BEH. Except for these companies, the holding will include also the existing Bulgargaz Holding subsidiaries – Bulgargaz - Sofia, Bulgartransgaz and Bulgartel. The new energy giant will have assets worth BGN 8.5 bln, earnings of about BGN 3.6 bln and 21 thous. employees.
Source: Standart (19.09.2008)

Bulgarian Business Rises against Expensive Natural Gas The business in Bulgaria is bitterly protesting the high prices of natural gas. The Confederation of Employers and Industrialists in Bulgaria has declared itself against the one in a row increase in the price of natural gas. In its declaration, CEIBG firmly supports the position of the Bulgarian Federation of the Industrial Energy Consumers against the announced by Bulgargaz increase in the price of natural gas by 36.5% from October 1. The Bulgarian business says it is inexplicable why Bulgargaz does not seem to take into consideration the serious decrease in the price of crude oil over the next trimester, although the price of natural gas is calculated against the prices of alternative fuels. Bulgargaz says the price of natural gas is calculated against the price of crude oil over the past ninety days, and on some of these days the price of crude oil went as high as about 150 US dollars per barrel. The average exchange rate of the US dollar against the Lev over the past thirty days is also taken into account, but just then the dollar started getting stronger. However, CEIBG are of an opinion that the formula used in the calculation of the price of natural gas is outdated and needs to be adjusted by the State Energy and Water Regulatory Commission. The industrialists also say that by setting higher prices to natural gas the state maybe wants to "encourage" the big companies to subsidize some of Bulgargaz's big debtors like the central heating companies and Kremikovtsi. CEIBG says that the Ministry of Energy and Economy, the State Energy and Water Regulatory Commission and representatives of the business should meet and discuss the current situation, because this is the only way to prevent bankruptcies and a sharp fall in the foreign investments in Bulgaria.
Source: Standart (19.09.2008)

The heating utility of the northern town of Pleven will settle its debts to state-controlled gas distributor Bulgargaz by directly transferring its power output dues from the national power grid operator NEK, the utility’s press office said. The utility has already sent letters to energy minister Petar Dimitrov, Bulgargaz executive director Dimitar Gogov and NEK chief executive officer Lyubomir Velkov. The Pleven heating utility produces some 4.0 mln levs worth of power a month and sells it to NEK. The company owes more than 3.1 mln levs to Bulgargaz. The proposal talked the gas distributor into keeping supplies to the utility on Monday. The negotiations between the two parties are still underway.
Source: Dnevnik (23.09.2008)

The three central heating companies Vratza, Burgas and Pleven have found a short term solution to the problem with unpaid bills towards "Bulgargaz". Representatives of the three central heating companies have met with the management of "Bulgargaz" yesterday evening. The signing of the agreement will take place today, when details will be announced, BNR (Bulgarian National Radio) announces. According to the three companies - the long-term solution to the problem with financial obligations towards "Bulgargaz" depends on the morals and conscience of the citizens, who use the service. If they start paying their bills on time, central heating companies will not be in a situation, where they cannot pay their liabilities. Despite the many liabilities of the central heating companies towards "Bulgargaz", opinions were expressed that the action of the gas monopolist is political, and not economic, since all three cities are governed by mayors of the opposition. The future of Sofia Toplofikatsiya is being discussed at the moment.
Source: news.bg (26.09.2008)

Bulgaria and Bondholders Rival for Supremacy in Kremikovtsi The horn of the expected battle for control over Kremikovtsi Steelworks has sounded at last at yesterday's meeting of Kremikovtsi's creditors in Sofia City Court. The difference between the Bulgarian state and the bondholders' claims is BGN 6 million. Adding the liabilities Kremikovtsi has incurred with the State Receivables Collection Agency the precise amount the smelter owes to the Bulgarian state reaches BGN 698.9 million or 29.5 percent of the company's total liabilities. In turn the bondholders are breathing down Kremikovtsi's neck with a claim for BGN 696.6 million or 29.2 percent. However, if we count up what the National Revenues Agency, Customs Agency and several state-owned companies such as Bulgargaz, the National Electrical Company (NEC) and the State Railway Company (BDZ) must get, Bulgaria definitely wins the fight. A total of 725 legal and natural persons are on the creditors' list, and the size of their claim is BGN 2.371 billion. All of them were diligently described by the court panel with Sofia City Court Chairman Svetlin Mihaylov in charge of it.
Source: Standart (27.09.2008)

Gazprom supply contracts hurt Bulgaria The gas supply and transit contracts signed with Russian Gazprom in 2006 are against Bulgaria’s interests and face consumers with shock price hikes, showed a supplemental agreement to the contract for supply of natural gas to Bulgaria and the memorandum for further development of Russian-Bulgarian cooperation in the gas sector. Under the new contracts, Bulgaria is to increase each year by a set agenda the price of natural gas for the domestic market received as a transit fee from the transfer to Turkey, Greece and Macedonia. The contracts, signed by Bulgargas and its partners Overgas Inc. (a Gazprom subsidiary) for supplies and Gazprom Export for transit, say that the gas from transit fees should cover about half of domestic consumption. This can explain why the rising price is having such an enormous effect on Bulgargas’s average sell price. Depending on the supplier, the 2008 price ranges from USD 383.18 per 1,000 cu m (for Overgas Inc.) to USD 415.87 under the contract with WIEE-ZUG. The price is increased semi-annually and was set at 60% of the market price for July 2008 and 82.5% for January 2009. It should catch up with the price of normal supplies by 2013. The documents also change the payment scheme for the transit fee.
Source: Dnevnik (29.09.2008)

Price of Natural Gas to Soar by 50% by January 2009 Bulgarian Government is preparing to introduce shockingly high prices of natural gas. Today, its price goes up by 23,89% and on January 1, 2009 - by another 21,4%. Thus, in three months alone, the price of gas will go up by about fifty percent, representatives of the trade unions said after yesterday's sitting of the National Council for Tripartite Cooperation. In the afternoon, the State Energy and Water Regulatory Commission set the price of natural gas at 538,66 levs per 1,000 cubic meters (VAT excluded) from October 1 on. This is by 103,86 levs higher by the current price of gas, which is 434,80 levs per 1,000 cubic meters (VAT excluded). Bulgargaz profit is 0.5% per 1,000 cubic meters of gas. Experts say the new price of gas will guarantee the unproblematic functioning of Bulgargaz. "The employers' organizations agreed to a two-step increase in the price of natural gas," Minister of Economy and Energy Petar Dimitrov said after the sitting of the Council. "This increase in the price of natural gas will prove deadly to the business," representatives of the employers' organizations said in answer. Prof. Konstantin Shushulov, Chairman of the State Energy and Waters Regulatory Commission, said the higher price of gas may cause the price of central heating to go up by over 12%. On Monday, the Commission submitted at the office of Deputy PM Ivaylo Kalfin a proposal for amendments to the Ordinance for Formation of the Price of Heating Energy, but its experts have not analyzed the options for a future increase in the price of gas, yet. "We will find mechanism to compensate the socially-handicapped," Minister Dimitrov said. Benefits may be allotted to the households consumers of natural gas.
Source: Standart (01.10.2008)

Russia Raises Gas Prices for Europe In October Russia will sell natural gas to its European consumers at US$500 for 1000 cubic metres. "The reason is the quicker pace of price increase than expected," said Alexey Miller, Gazprom CEO. The prices of petrol products are rising and the price of natural gas is formed on their basis. Experts believe that by the end of the year the price of natural gas for the European consumers will rise up to US$550 for 1000 cubic metres. Energy projects in Bulgaria will be the top agenda at the session of the intergovernmental Bulgarian-Russian commission for economic cooperation to be held in Sofia October 8-9.
Source: Standart (03.10.2008)

Gazprom Delays Launching of South Stream Gas Pipeline – Report The Russian energy giant "Gazprom" is going to take its time with the South Stream gas transit pipeline by putting off the launching of the projects by at least two years, the Russian business newspaper Vedomosti reported Friday. In January the Gazprom Director Aleksei Miller stated the first gas would be delivered through the pipe in 2013. Bulgaria is an important participant in the South Stream project. Vedomosti, however, cites the company's "General Plan for the Development of the Gas Sector by 2030", of which it claims to have a copy, as saying the gas deliveries through South Stream would start in 2015-2024. The documents also mentions the exact projected capacity of the pipeline, which had not been revealed previously - 31 billion cubic meters per year. The exact time of the launching of the South Stream would depend on a number of factors, according to the Gazprom's General Plan, including the conditions on the domestic and foreign markets, the state policy in the sectors, and the success of the negotiations on its route with other countries. Vedomosti points out the document did not contain any estimate of the cost of the construction of the pipeline but it reminds that earlier the South Stream section going through the Black Sea was estimated to cost USD 10 B, plus at least as much for its land part. The General Plan also mentions that Russia needed to construct 2 400 km of pipeline on its own territory in order to be able to launch South Stream. The article cites a Russian analyst as saying this delay by at least two years could allow the EU-sponsored Nabucco gas pipeline, which is considered a competitive project, to grab hold of the Central European market. Respectively, this could then force Russia and Gazprom to reconsider the South Stream project.
Source: news.bg (03.10.2008)

Bulgarian Companies Struggle for Projects in Sochi 'The participation of Bulgarian construction companies in the building of facilities for the winter Olympics in Sochi will be one of the topics of discussion at the oncoming Bulgarian-Russian Commission for Economic Cooperation. The forum will be held in Sofia October 8-9, Minister of Economy and Energy Petar Dimitrov told the Bulgarian National Radio. The top agenda at the conference is Bulgaria's cooperation with Russia in the energy sector, the big energy projects Belene nuke and South Stream pipeline. The Russian delegation will be led by Deputy PM Sergey Sobyanin. There will be eighty people on the Russian delegation, six of them are deputy ministers. 'Since the end of 2007, the price of Russian natural gas transited via Bulgaria has increased by 85.4% and the end users pay by 72.9% more for natural gas,' Minster Dimitrov said also.
Source: Standart (06.10.2008)

Bulgaria will seek talks with Russian gas major Gazprom on adding an extra 500 million cubic metres to the 3 billion cu m it gets a year because of growing consumption, energy minister Petar Dimitrov said on the sidelines of a session of the Bulgaria-Russian economic commission. Bulgarian Energy Holding (BEH), a newly-created structure bundling Bulgaria’s key power generation assets, may join hands with its Russian peer on oil and gas exploration projects. The minister said there will not be legislative bars before a future cooperation although Russia keeps foreign companies out of its mineral, oil and gas fields.
Source: Dnevnik (10.10.2008)

Bourgasgas EAD, the company for distribution and supply of gas, will put up a claim against Bulgargas for breaking the contract for fuel supply by stopping the gas for six hours, the executive director of the company Zlatin Dimov announced for Pari Daily. The company is still in the process of building up the supply network. For 2008 BGN 5 million will be invested for the building of 26 km. Already 200 enterprises have been gasified.
Source: Pari (13.10.2008)

Bulgaria's Cabinet Has Taken up the Heavy Cross of Natural Gas Supplies President Georgi Parvanov - Mr. President, the Opposition is mainly criticizing the Bulgarian Socialist Party (BSP) about the negotiated price of natural gas. Some say that you have also participated in the formation of these prices. Is it true? - Let me explain. I have contributed to the negotiations on the three strategic projects signed in January this year, including the agreement on the South Steam project, which does not touch upon any prices. The issue about prices had been decided long before that and I was informed about the results of these negotiations only post factum. Of course, such negotiations might, as well, not have been conducted. This Cabinet could have left the issue undecided, thus passing the responsibility about it on to the next Government. Had this happened, however, the next Cabinet would have faced a fait accompli after the expiration of the previous contract and would have had to choose between a turned off gas tap and a hike in the prices of the supplied natural gas. It is true that the present increase in the prices of natural gas is also shocking, but you could imagine how drastic the hike would have been in the other scenario. In this line of thoughts it is praiseworthy that the incumbent Cabinet took the responsibility to solve this issue. On the other hand, the Bulgarian people should have been informed of the coming increase in the price of natural gas and protection buffers should have been provided for the socially handicapped, as well as for some companies. It is also true that some companies benefited a lot from natural gas subsidies in the past, but now they have to understand that we have to stick to the market prices of natural gas. Otherwise the gas subsidies for these "privileged" companies should be paid by the Bulgarian tax payers. - Some share the opinion that you are Russia's man as regards the energy projects. Is it so? - I have heard all sorts of things about my foreign policy. I have visited Brussels more than ten times. There isn't a European capital that I haven't visited. When the issue of Bulgaria's EU membership required timely and adequate diplomatic actions, I did not my spare efforts. As a EU member, Bulgaria's policy should become more economically oriented and in this line of thoughts we should find a more efficient mechanisms for development of our energy policy. Two months after the agreement with Russia was signed, I went to Azerbaijan, where I negotiated the supply of one billion cubic meters of natural gas for Bulgaria - our quota in the Nabucco project. Now we are preparing shuttles to Turkmenistan and Uzbekistan - countries that are potential suppliers of natural gas for the same project. And I will not stop here. I believe it is all for Bulgaria's good. It is for the good not of this Cabinet, perhaps not of the next. But till 2030 many Bulgarian governments will benefit and what is more important, the Bulgarians will benefit. As long as Russia is concerned, our relations are based on honesty, principles, and I think, on mutual benefit. - You said you were organizing an energy forum to be attended by representatives of Russia, Europe and the USA. When will it take place and what will be the main topics of discussion? - We have sent the invitations already. The possible dates we have proposed are April 24 and 25, 2009. It promises to be quite a broad forum - with the participation of over 25 heads of state and prime ministers, of European institutions, with the support and understanding on part of the USA. Their support was aired literally a couple of days ago by the US energy ambassador for the region. Russia has confirmed its participation at the highest possible level, a number of countries from the Black Sea and Caspian regions have confirmed their participation as well. I hope this forum will yield results. For the first time issues related to diversification of Europe's energy supply will be discussed in such deep detail. - Not long ago you demanded that a discussion should be held on the relations between the media and the rule. Is the Bulgarian public mature enough for starting a debate on which media are financed by the grey sector? - Look, I will not pretend that I am simply confused because I am outright irritated at the fact that representatives of the grey sector have confidently cropped up from among the media. These representatives give advice. They dare behave like mentors. They behave insolently. They establish their media, mostly sites in the Internet. They attempt to conquer some of the yellow press and use it as a tool for carrying out their political racket. And since this press is subject to no rules, the discrediting of anybody is as easy as a piece of cake. This obviously aims at the return of grey sector. The grey sector tries hard and does its best to stop Bulgaria's permanent incorporation into the European structures and the European mentality and behaviour. It is not so much the job of the politicians as the media sector itself, to judge who is who and the roles of everyone in this space on the basis of its inner rules and ethics. It is wrong to reduce everyone to a common denominator.
Source: Standart (14.10.2008)

The state will provide BGN 300 million for the increase of the capital of the National Electric Company (NEK), which is part of the structure of the Bulgarian energy holding (BEH), created a month ago. The minister will vote on the increase of the holding's capital. It was registered through a change of the registration of "Bulgargaz holding", whose capital is 1 billion levs. BEH unites Matitza Åast Ìines, thermal-electric power station Maritza Åast 2, NEK, Bulgargaz, Bulgartransgaz and Bulgartel. With the BGN 300 million a resource is provided in the intermediate stage of the preparation of the "Belene" project until its financial completion in December 2009.
Source: news.bg (16.10.2008)

Zhevago Jilts Kremikovtsi Kostyantin Zhevago has decided to terminate his Vorskla Steel's outsourcing relations with Kremikovtsi Steelworks, Vorskla Steel Bulgaria CEO Viktor Demyanyuk announced. "They are taking us for an ATM machine," he said. Vorskla Steel's withdrawal was because they felt like "uninvited guests" in Bulgaria. "We never met the support of the Bulgarian government or the bankruptcy officers," Demyanyuk said.
Source: Standart (21.10.2008)

Bulgarian Government Granted 150 Million EUR For NPP “Belene” The Bulgarian government granted 150 million euro for accelerating the construction of the nuclear power plant (NPP) “Belene”. The resources will be transferred to the capital of “Bulgarian energy holding”. The money will secure the intermediate stage of the preparation of the project NPP “Belene” till its financial conclusion in December 2009. By the end of the next year the expenses which should be born by the National electric company are around 450 million euro. Mainly the sources are for advance and current payment in the ordering of equipment – reactor, steam generators and others, preparation of working projects and funding of the first activities of the new construction. The granted today money will help the National electric company secure source for its part of the capital in the forthcoming establishment of a joint venture between NEC and the chosen investor RWE.
Source: Darik Radio (23.10.2008)

The Government will grant BGN 300 mln to raise Bulgarian energy holding’s capital. This will result in raise in the capital of the National electric company, necessary for acceleration of AES Belene’s construction. The money will be generated from correction in the budget of the Ministry of economics and energetics.
Source: mediapool.bg (24.10.2008)

New gas-field discovered in Bulgaria A new gas-field was discovered in Bulgaria by the British company "Melrose resources", the British newspaper "Scotsman" writes. The gas-field is located in the Kavarna region, for which the company has a permit. "Melrose resources" supplies 15% of the natural gas in Bulgaria from the Galata field, which will become a depot. Recently, the company found another gas-field in the Kaliakra region. The blue gas will be accepted in the Galata depot next summer and will be on the market next winter, when energy consumption increases, the paper writes. The initial estimations show that the field has 24 billion cubic meters of natural gas. The favorable conditions create an opportunity for financial success of the Edinburgh based company, after the Galata field is depleted. Extraction from the Galata field will be reduced.
Source: news.bg (30.10.2008)

Bulgaria's Government to Wait for RWE's Answer by the Spring of 2009 The Bulgarian government has not set a deadline for Germany-based company RWE to ratify the joint stock agreement for the acquisition of 49 percent of the project for construction of NPP Belene, but an answer from the Germans is expected not later than the spring of next year, Deputy Economy and Energy Minister Yavor Kuyumdzhiev said during the 10th Economic Forum on Southeast Europe that opened in Sofia. "RWE will make a foolish mistake, if they give up on the contract," he said. According to him, if they give in under the pressure of the greens and give up on the project, the construction of the nuclear power plant will not stop, but their place will be taken by some of the other candidates. If not other candidate appears, Belene will be built with bank loans, or with money from the currency reserve, which now amounts to 12 million euro. Another option is the about four billion euro, which Russia has provided in its budget by 2010, should financing of the Belene project be necessary.
Source: Standart (07.11.2008)

Bulgaria admits German RWE upset about Belene NPP Bulgaria’s national power utility NEK will wait till next spring for German company RWE to decide whether it will join the Belene nuclear power plant project in the Danube town of the same name. The energy ministry has not set a deadline for approval of the shareholders’ agreement which gives the German strategic investor a 49% stake in the project company, said deputy minister Yavor Kuyumdjiev adding that RWE would make a grave mistake if it succumbed to pressure by eco activists. German newspaper Handelsblatt reported recently that RWE’s supervisory board may postpone the vote on the agreement until 2009 to make sure that the project is not risky and see how what turn the global economic crisis would take. Meanwhile, Greenpeace urged the German company to quit the project. If the plant failed to attract funding, the state may dip into the EUR 12 billion foreign exchange reserves, Kuyumdjiev said. He probably meant the fiscal reserve of BGN 12 billion. The forex reserves are just above EUR 14.2 billion, under data of the central bank. As a last-ditch option, the nuclear plant will be funded by Russia. Economic parliamentary committee chairman Yordan Tsonev declined that the government has ever discussed funding infrastructure projects by the fiscal reserve.
Source: Dnevnik (07.11.2008)

The financial crisis might delay "Southern stream" even more The financial crisis may force the Russian energy giant "Gazprom" to revise the project "Southern stream". This was announced by an employee of the company at a conference in Slovenia, AFP announced. The current financial crisis might influence to a certain degree the results of every international company, "Gazprom" being no exception - Stanislav Zyuganov, head of the department for international business for the Russian company, said. He has pointed out that "Gazprom" might be forced to reconsider its "Southern stream" project in response to the crisis. Information appeared in the Russian media that "Gazprom" is delaying the start of "Southern stream" until 2015 or 2 years after the deadlines, pointed out by the Chief Executive Officer Alexei Miller in January. The gas pipe, connecting Russia with Southern Europe through the Black sea, is designed by "Gazprom" and the Italian energy company Eni. "Gazprom" already guaranteed the participation in the project of Bulgaria, Greece, Hungary and Serbia. The participation of Austria and Slovenia is also possible.
Source: news.bg (10.11.2008)

GDF Suez could subsitute RWE in NPP "Belene"? The French energy giant GDF Suez claimed on Monday that “in principle it is interested” in the purchase of a share in the second Bulgarian nuclear power plant “Belene”. Last month the Bulgarian government decided to determine the German energy company RWE for its strategic partner, who to buy a share of 49% of the planned NPP “Belene”. The Bulgarian side gave the opportunity the share of 49% to be divided into parts in order the second participant in the tender, the Belgian Electrabel, which is owned by GDF Suez, to be included in the investment. The vice-president of the French company on nuclear issues Paul Rorive has confirmed GDF Suez' interest during the energy conference in Sofia pointing our that he was not informed about the conditions under which the Bulgarian government has negotiated with RWE. The government in Sofia has claimed: you can participate in the project but you cannot change the conditions – so now the French company is checking the conditions. According to Rorive in the next week GDF Suez will explore carefully the strategic framework agreement between RWE and the Bulgarian National electric company, which remains with 51% of the shares of the new nuclear electric station.
Source: news.bg (18.11.2008)

Bulgaria Produces 32 Billion kWh for Export In 2020 Bulgaria would have 32 billion kWh in excess if the energy projects currently supported by the cabinet are implemented. This was announced by Plamen Tsvetanov from the Institute of Nuclear Research and Nuclear Power Engineering with the Bulgarian Academy of Science. According to him, currently Bulgaria exports 5-6 billion kWh per annum, but in twelve years there won't be markets for the extra power. By 2050 Bulgaria will be able to rely on electricity generated by wind farms or solar batteries, which would make the country energy independent.
Source: Standart (20.11.2008)

The Sofia heating utility may enter the newly-founded Bulgarian Energy Holding after the ministry was granted a 58% municipal share in the ailing company, deputy minister Galina Tosheva told Dnevnik. The ministry and Deloitte Bulgaria, which advised the creation of the holding structure merging major power generation assets, are weighing different rescue options including a capital boost at the holding company to lend cash to Bulgargas, Tosheva said. Under the scheme, the holding company will buy into Toplofikatsia Sofia against paying off its debts to the gas company. The Government is due to vote on a BGN 80 million capital hike next week. The money will be sourced from the state budget. Tosheva said this did not violate EU law as confirmed the ministry’s legal experts. Another option on the table is giving Bulgargas a loan to guarantee supplies from Russian major Gazprom. Consumers owe the struggling utility more than BGN 300 million.
Source: Dnevnik (25.11.2008)

'Bulgargas' to gradually increase the gas prices for the big energy consumers “Bulgargas” will secure gradual increase in the prices of natural gas in 2009 for the big energy consumers. This announced the Bulgarian chamber of commerce, according to the suggestion of which the decision was taken. The business energy consumers will have the possibility for a deferred payment of the contracted with “Bulgargas” amounts of natural gas. The decision was taken yesterday at a working meeting of the management boards of the enterprise, the nationally represented business organizations and the big energy consumers. The new mechanism is expected to help the business and the citizens cope easier with the burden of the expected increase of the natural gas price from 1 January 2009, informs the Bulgarian chamber of commerce.
Source: news.bg (26.11.2008)

New prices of natural gas The new prices for the distribution and supply of natural gas of "Burgasgas" become effective today. They were approved with a decision of the State commission for energy and water regulation. The prices of natural gas for private consumers decrease on average by 3 percent beginning today. In the private usage sector 1 kilowatt energy, produced with natural gas will cost 9,9 stotinki, while the price of electric energy for private consumers is 15,3 stotinki per kilowatt. The price of gas is 20,8 stotinki per kilowatt. In the commercial sector 1 kilowatt energy, produced with natural gas will cost 7,8 - 9,4 stotinki (minimum-maximum). The new prices for distribution and supply with natural gas of "Burgasgas" EAD keep the competitive price of natural gas compared to the alternative energy sources, the company announced.
Source: news.bg (01.12.2008)

Bulgarian Energy Holding, the structure created two months ago to consolidate key power generation assets, reported a 22% rise in nine-month profit revealing no financial details. BEH comprises the country’s biggest coal-fired power plant, the state-owned Maritsa East 2, coal miner Maritsa East, Kozloduy nuclear plant, state-run gas distributor Bulgargaz, Bulgartransgaz, telecom services provider Bulgartel, national power grid operator NEK and the Electricity System Operator. Kozloduy NPP was the best performer in the group. Bulgargaz landed at the other end of the scale with a loss of BGN 35.4 million for the nine months blaming the regulatory axe on its price hike proposal. At the same time, the gas company continued to pocket fees for the transit of Russian gas via Bulgaria at the expense of Bulgartransgaz in breach of the gas directive. The two companies are expected to sign an agreement on the fees by the end of the year.
Source: Dnevnik (03.12.2008)

The government increased the capital of the Bulgarian energy holding by 400 million levs. The State will acquire nearly 63 000 shares of "Toplofikatsiya Sofia" AD for free and in this way will become a 100% owner of the company. The 400 million levs will be disbursed by the Economy Ministry and will be used for the purchase of the shares of Toplofikatsiya. The Sofia company produces over 1 billion kilowatt hours electric energy and currently renders services to over 400 000 households in the capital. "Toplofikatsita Sofia" AD is the biggest central heating company in the country.
Source: news.bg (05.12.2008)

Bulgarian Energy Holding will buy Sofia heating utility’s BGN 240 million debt to state-run gas company Bulgargaz, deputy energy minister and BEH executive director Galina Tosheva said after the Government voted Thursday on a BGN 400 million capital hike. Toplofikatsia Sofia has amassed a BGN 80 million debt for supplies. Last year it was rescheduled a BGN 150 million debt until 2013. BEH, which bundles Bulgaria’s core state-run energy assets, will acquire a stake in the utility after boosting its capital by as much as it owes to Bulgargaz.
Source: Dnevnik (08.12.2008)

Bulgargaz demands a 21% increase of the price of natural gas A price increase of natural gas of at least 21% beginning January 1 was demanded by Bulgargaz from the State commission on energy and water regulation. Thus, in the next quarter of the year, 1000 cubic meters of gas will be sold at about BGN 653, VAT not included. The gas company motivated the demanded price increase with the over 15% increase of the value of the USD in the last period, as well as the lower price, which was ordered by the national regulator for the previous quarter. At the same time, during setting of the new prices, employees of the company have taken into account the lower prices of alternative fuels.
Source: news.bg (10.12.2008)

"Gazprom" decreases prices for Bulgaria In the next year "Gazprom" will reduce the price of natural gas for Bulgaria by 35-40% according to the current situation. This was announced by the spokesman of the Russian gas company Sergey Kupriyanov. The delegation of the company is on an unofficial meeting in our country. "As you know the price of gas is connected to the price of petrol products. Within this year, the price of petrol products was dropping and of course, all of this is going to be reflected in the wholesale prices of "Gazprom" for Bulgaria in the next year. Up to this moment it is impossible to say how prices will change throughout the year, because the situation continues to develop and we don't know how the price of petrol will change next year. According to our estimates the price of gas in the next year will drop by 30-40%," Kupriyanov pointed out.
Source: news.bg (12.12.2008)

Gazprom sees 30-42% price cut from ‘09 Russian gas major Gazprom may lop off by 30 to 42% the tariff for supplies to European consumers next year due to the recent record decline in oil prices on the global markets, spokesman Sergei Kupriyanov said. Kupriyanov said Bulgaria will also buy at lower prices but did not elaborate further. According to Bulgargaz, Bulgaria’s state-run gas distributor, the effect of the price cut will not be felt before April. The company is demanding a 21.3% price hike from January to limit the bad impact of soaring black oil and gas oil tariffs. While seeing consumption picking up 3% for 2008 against a planned 7% as warm weather lingered and production capacities were shut, the gas monopoly will pay for all it has ordered under a take-or-pay clause in the supply contract. Bulgaria should consume less than 3 billion cu m for the clause to be triggered, Kupriyanov said. The ongoing financial crisis will not affect the South Stream natural gas pipeline project, Kupriyanov said.
Source: Dnevnik (15.12.2008)

The price of natural gas increases by nearly 12% on January 1 The price of natural gas will increase by 11,79% on January 1 2009. This has been planned by the State commission for energy and water regulation. If this plan becomes effective, the raw material will increase in price from BGN 538.66 per 1000 cubic meters (without VAT) to BGN 602.17 per 1000 cubic meters (without VAT). The final decision will be taken by the regulator next week after the open session for review of the report of the work group and a hearing of the arguments of Bulgargaz SPLTD.
Source: news.bg (16.12.2008)

Bulgaria to Export Electricity to Macedonia The National Electrical Company will export electricity worth 9.5 million euro to Macedonia, as reported from yesterday's inauguration of the Dubrovo-Chervena Mogila overhead power line, attended by Bulgaria's PM Sergey Stanishev and Minister of Economy and Energy Peter Dimitrov. The 150-kilomenter long power line costs 50 million euro. Bulgaria's participation in the project is 16,6 million euro. Bulgaria's PM Stanishev and his Macedonian counterpart Nikola Gruevski also discussed the possibility of Macedonia joining in the construction of Belene Nuclear Power Plant (NPP). Stanishev was firm that Belene NPP was an important guarantee of constant power supply not only for Bulgaria, but for the entire region. "Negotiations as to Macedonia's involvement in Belene NPP are yet to be scheduled," Stanishev clarified. Both Stanishev and Gruevski expressed their satisfaction with the economic partnership between Bulgaria and Macedonia. "The commercial exchange between our countries has increased by 15 times in the last 9 years", Gruevski pointed out. According to Stanishev, so far Bulgaria has invested 36 million euro in Macedonia. Gruevski expressed his hope that the trade exchange between Bulgaria and Macedonia soon reached 1 billion euro.
Source: Standart (16.12.2008)

Bulgaria’s energy regulator may slap a BGN 1 million fine on Bulgargaz, the state-run gas monopoly, for importing costlier Russian gas instead of tapping on the gas repository in Chiren in the past quarter, said chairman Konstantin Shushulov. The gas company snubbed a regulatory decision to increase prices for Chiren quantifies in a bid to trim imports from Witershall Erdgas Handelshaus, Gazexport and Overgas Inc.. Bulgargaz has caused a BGN 44 million damage to the state by importing Russian gas at the highest possible prices instead of using 209.2 million cu m from the Chiren depository at BGN 396.78 per 1,000 cu m, Shushulov said.
Source: Dnevnik (17.12.2008)

Bulgarian Companies Extract Gas for Nabucco Bulgarian companies would be licensed for extracting natural gas for Nabucco project. Bulgarian businessmen will be able to take part in joint ventures and invest in the production of natural gas from countries where this fuel is abundant, the Standart learnt from sources from the delegation led by Bulgaria's President Georgi Parvanov who is on a two-day visit to Turkey. Nabucco is a rival project to the Russian South Stream and is expected to start functioning in 2013 and transport gas from Turkey to Austria via Bulgaria, Romania and Hungary. Turkey assured Bulgaria gas will be supplied just in exchange for the transit fees,it emerged at the meeting of President Parvanov and Turkey's Prime Minister, Recep Erdogan who talked in the Swissotel in Ankara under tight security measures. By now Bulgaria has negotiated two billion cubic metres of natural gas on Nabucco project. Today Georgi Parvanov will make an official visit to Turkmenistan where an energy agreement is also expected to be signed.
Source: Standart (18.12.2008)

Gas-rich Turkmenistan, Bulgaria sign energy pact Bulgaria secured a tentative deal Friday to receive gas supplies from energy-rich Turkmenistan that could lay the grounds for increased gas deliveries to Europe from the Central Asian nation. Bulgarian President Georgi Parvanov said that Turkmenistan has backed a proposal to provide 2 billion cubic meters of natural gas to his EU-member nation through the existing pipeline network through Russia. The two countries also signed a memorandum of understanding that will help ensure coordination on boosting global energy security, Parvanov said. "I believe that on the international level, we will begin to speak with one voice when it comes to supporting (energy security)," Parvanov said after a meeting with his Turkmen counterpart, President Gurbanguli Berdymukhamedov. Parvanov has backed a U.S.- and EU-backed Nabucco pipeline that could ease Europe's reliance on Russian energy. The route would run from the Caspian Sea across Turkey, Bulgaria, Romania and Hungary to Austria. But Parvanov also has signed a deal with Russia to build a pipeline under the Black Sea which Moscow has offered to underline Nabucco. Russia and the West has been competing for Turkmen and other Central Asian energy resources in what was widely compared to the 19th century "Great Game" race for domination in the region between the British empire and czarist Russia.
Source: econ.bg (20.12.2008)

NPP Belene Construction May Turn Cheaper The construction of Bulgaria's second nuclear power plant Belene may turn out cheaper than expected because of the deflation following the global financial crisis, NEC CEO Lyubomir Velkov said yesterday. Mr. Velkov signed the agreement between the Bulgarian state and Gemany-based energy company RWE for the establishment of a joint venture on the Belene project. According to initial calculations, the construction of NPP Belene will cost four billion euro. Although the initial price of the construction was included in the signed agreement, there will not be a problem if the total cost of the project goes down, Velkov says. Belgium-based Electrabel, which until recently was a competitor to the German company, may now decide to join the joint NEC-RWE joint venture. Dr. Gerd Jager, Member of RWE Power AG's Executive Board in charge of Nuclear Power Plants the Standart that there would be talks between the German company and Electrabel in the next few days. He and Antonius Voss, Executive Vice President and CFO of RWE Power AG, signed the join venture agreement on the part of RWE. On the part of the Bulgarian state, the agreement was signed by Velkov and NEC Executive Director Mardik Papazyan. If Electrabel joins in the joint venture, they and RWE will hold 24.5% each and NEC will hold 51% of the shares
Source: Standart (20.12.2008)