Bulgargaz and Sofia Municipality to renegotiate Central Heating Utility’s debt "The management of the Sofia Central Heating Utility, Sofia municipality and Bulgargaz will hold a meeting to negotiate a deferral of the heating company's liabilities to the gas supplier," Stoyan Tsvetanov, Executive Director of the heating utility, said for Focus agency yesterday. He reminded that the company had liabilities of almost BGN 500 mln and another BGN 100 mln in overdue payments to Bulgargaz. Tsvetanov expects the heating utility's losses for 2010 to exceed BGN 16 mln. The main reason for this is that the company sells the heating energy below cost. As of January 1, the price of the central heating in Sofia decreased by 5.1%. "The reduction is certainly in favour of consumers and they will feel it in their bills for January," said Tsvetanov. According to him, the new prices of the heating energy will result in losses to the company but they will be acceptable. Currently, the customers of the Sofia Central Heating Utility owe about BGN 260 mln to the company, out of which BGN 230 mln is the debt of households and BGN 30 mln - of businesses and organisations. Tsvetanov specified that outstanding bills of BGN 15,000 were being paid to the utility every day but this happened only after lawsuits. Tsvetanov added that 80% of the company's receivables were accounted for by about 60,000 of its clients. The company is expected to present its new business plan to the State Energy and Water Regulatory Company this month. It will project investment in cogeneration capacities which will contribute to the cheapening of the heating energy for the residents of the capital. "One of the biggest challenges facing the company is the reduction of losses along its network. The decision for the funding of these investments will be made by the company's owner – Sofia Municipality," said Tsvetanov. According to him, money can be attracted by borrowing low-interest loans and through public and private partnerships.
Source: Class (03.01.2011)

Sofia Central Heating Utility to pay BGN 90 mln to Bulgargaz By mid-February, the Sofia Central Heating Utility will pay about 90% of its BGN 100 mln debt to Bulgargaz, it became known after a meeting between Sofia Mayor Yordanka Fandakova with the Executive Director of the heating company Stoyan Tsvetanov and the head of Bulgargaz, Dimitar Gogov. “ Mr. Tsvetanov assured us that within about 40 days, some 90% of the BGN 100 mln I told you about at the end of 2010 would be repaid. For us, this is a guarantee that we shall be able to cover our liabilities to our suppliers. The greatest consumer and client of Bulgargaz should get this credit of confidence and should, of course, honour it,” said Gogov. “Legal proceedings are the only mechanism for collecting the outstanding receivables of the Sofia Central Heating Utility,” said the company’s Executive Director Stoyan Tsvetanov. He added that he had pledged to double the efforts regarding non-prompt payers. Some BGN 14-14.5 million under overdue bills was collected from consumers last year following court proceedings. The expectations are that this amount will increase this year. According to Tsvetanov, the company expects to get about BGN 50 mln from sale of electricity from its cogeneration capacities by February 10. “We can guarantee the heating season to the residents of the capital,” said Sofia Mayor Yordanka Fandakova. “I am grateful to Mr Tsvetanov and Mr. Gogov, and especially to the new management of the heating utility, who work during the holidays in order to ensure the repayment of the outstanding debt for 2010 until mid-February, which in turn will allow Bulgargaz to provide regular supplies for the entire heating season,” commented Fandakova. “The new management of the Sofia Central Heating Utility has important tasks – to collect its receivables and mobilize additional efforts but the important thing is that an agreement has been reached and we can reassure people,” added Fandakova. The heating utilities in Burgas, Vratsa and Pleven are the ones with the biggest problems with the payment of their current liabilities - Bulgargaz has to receive anywhere between BGN 5 mln and BGN 6 mln. “The heating company in Shumen has the greatest liabilities to Bulgargaz,” said its Executive Director Dimitar Gogov. “If the heating company tells us that it will pay 90% of its BGN 15 mln debt in 40 days, you must be certain that our attitude to it will be the same as to the Sofia Central Heating Utility,” he said. According to Gogov, if the indebted heating companies do not pay their liabilities to Bulgargaz, it will not be able to supply gas for lack of funds to buy the fuel with.
Source: Class (04.01.2011)

Sofia's district heating utility will repay around BGN 90 million to the country's gas monopoly Bulgargaz by February 10, Toplofikatsia Sofia deputy executive director Stoyan Tsvetanov said. The decision was taken in Monday at a meeting between the capital's mayor Yordanka Fandakova, Bulgargaz' executive head Dimitar Gogov and Tsvetanov. The sum accounts for 90% of the utility's liabilities to the gas monopoly as of 24 December. According to Tsvetanov, the money will be secured via power sales and debt collection, Tsvetanov said. Toplofikatsia Sofia currently owes around BGN 100 million to Bulgargaz for gas supplies, as well as some BGN 500 million in deferred liabilities.
Source: Dnevnik (04.01.2011)

Heat supply companies in Shoumen and Kazanlak will be fined for failing to fulfill their commitments under their license for heating, announced the president of the State Energy and Water Regulatory Commission (SEWRC) Angel Semerdzhiev. Heat Supply Kazanlak does not work at all, and the company in Shoumen has limited heat supply after Bulgargaz reduced the supply of natural gas for the company in the end of last year because of unpaid debts. Semerdzhiev commented there were many attempts to stabilize heating company in Kazanlak, but it has not repaid its obligations to the gas supplier in the region - Citigas as well as other suppliers, including of electricity. Most likely the license of Heat Supply Kazanlak will be revoked, said the president of the regulator.
Source: Dnevnik (06.01.2011)

Electricity prices to be increased if inflation reaches 5% “As of July 1, 2011, electricity prices will account for inflation, if it is between 4% and 5%,” explained Angel Semerdjiev, Chairman of the State Energy and Water Regulatory Commission (SEWRC). According to him, the price increase will be accounted for so far as it affects companies’ direct costs. The introduction of a capacity fee is also expected to cause a change in the pricing approach. The specific size of the fee and the point when it will enter in force are still not known. The Commission's Chairman said that proposals from the three electricity distribution companies were still due to be presented. Semerdjiev assured that the SEWRC will not allow companies to apply a different approach when determining the fee. District heating services in entire blocks of flats, buildings or entrances will be cancelled if 75% of the subscribers are not correct payers. So far, the proposal was for this extreme measure to be applied if 50% of the subscribers were not accurate payers. "Regular customers do not pay the liabilities of defaulting subscribers but unpaid bills affect service quality, “ stated Semerdjiev. The irregular payment of bills leads to the postponing of investment programmes, which impedes the introduction of highly efficient technologies. Data of District Heating Company (DHC) -Sofia shows that merely 47% of subscribers pay their bills regularly. Since the beginning of the new heating season, a new debt of BGN 100 mln has been accumulated and the total liabilities of the company stand at nearly BGN 500 mln. DHC - Sofia has signed a rescheduling agreement with Bulgargaz in order to cope with the situation.
Source: Class (12.01.2011)

Bulgargaz to receive overall BGN 20 mln from the Sofia Central Heating Utility Sofia DHC (district heating company) has transferred over BGN 20 mln to Bulgargaz for only a week, explained to BNR (Bulgarian National Radio Dimitar) Dimitar Gogov, CEO of Bulgargaz. Last week, the Sofia Central Heating Utility promised to disburse a total of BGN 90 mln of its debt to the company until February 10. Otherwise, the natural gas supplies to Sofia DHC will be suspended in the middle of winter. Gogov explained that so far Bulgargaz has not received any funds from Shumen DHC which owes more than BGN 15 mln. The gas provider continues to supply the utility with less amounts of gas than those needed so as to limit its losses. The gas supplies to the Shumen Heating Utility were limited at the end of last year in accordance with the agreement that the company will start to pay off its liabilities as of January 5. Since it did not happen, a new agreement was reached stipulating that the company should start transferring the payments by the middle of the month. Then, the strategic investor Titan Power Inc. is expected to be inaugurated.
Source: Class (13.01.2011)

Plans for the sale of heating utility Toplofikatsiya Sofia are not on the agenda and the debt-ridden company is not currently looking for a foreign partner, its new executive director has announced. "I understand from the statements of the owner that privatization is not an issue now," Stoyan Tsvetanov told 24 Hours daily. Tsvetanov, who was appointed executive director of the company at the beginning of the year, said he expects the bills for December to be higher by 29% in comparison with last year. Sofia municipality council decided at the end of July that heating utility Toplofikatsiya Sofia will be transferred back to the municipality along with its debts, exceeding BGN 510 M. Toplofikatsiya Sofia, which has been in the news for more than three years after it was found drained to the brink of bankruptcy, provides heating to about 400,000 households in the capital Sofia. Until 2008 Sofia municipality was a majority owner of the plant, while the economy ministry held a 42% stake. Toplofikatsiya Sofia returned to the government in 2008 when Bulgaria's largest municipality transferred a 58.2% stake in a bid to curb debts. Plans for its sale, considered to be one of the country's last big energy privatisation deals, have all collapsed so far.
Source: Dnevnik (18.01.2011)

Management of Bulgaria's energy firms in poor condition - CDR Management of state energy companies and large projects in Bulgaria's power continues to be impeded by corruption, poor management and regulators' idleness, which in turn affects taxpayers and hinders the country's energy security, according to a report of the Centre for Democracy Research (CDR), presented on Tuesday. According to the study, energy companies lack basic accounting norms and control, which threatens the financial stability of companies such as power grid operator NEK and gas monopoly Bulgargaz. The two entities are still under risk of bankruptcy despite the introduced cost reductions, the think-tank stated. Furthermore, management responsibility is divided between various structures, but it is still not clear which authority is responsible for state-owned companies -- the energy ministry, the Bulgarian Energy Holding or their management teams. As much as 56% of energy procurement orders in 2008 and 2009 were carried out without any real competition due to political pressure. Along with the contracts signed irrespective of the required procedure, the escape from market competition in the sector appears to be "a rule rather than exception", the CDR noted. The CDR also considers that nuclear power plant Belene is a project combining all vicious practices in the sector and in state companies' management for the last 20 years. According to the think-tank, Belene is grounded on misleading forecasts, with its final price seen to reach between EUR 10 billion and EUR 12 billion.
Source: Dnevnik (19.01.2011)

Bulgaria to be supplied with natural gas without intermediaries as of 2013 Bulgaria will be supplied with Russian natural gas without intermediaries as of 2013, reported yesterday the Russian Vedomosti business daily, citing the press release of Russian Gazprom. Both parties have agreed on direct deliveries after negotiations held in Moscow between Bulgargaz' Head, Dimitar Gogov, and Gazprom's CEO, Alexey Miller. Currently, three companies - Overgas, Wintershall and Gazprom - supply natural gas to Bulgaria. All three companies are linked to Gazprom, while the Government's purpose is to sign a new contract with only one company considered a subsidiary of the Russian giant Gazprom Export. By the end of 2012, current gas supply contracts will expire. Afterwards, a new contract is expected to enter into force. The document itself is anticipated to be signed by the end of June this year, announced Gazprom. At present, our country purchases from Gazprom-associated companies around 70% of the needed natural gas, reminded Vedomosti. Last year, the concern supplied to Bulgargaz 2.6 billion cu m of gas. The remaining quantities are extracted by the Scottish company Melrose Resources in the Black Sea near Kavarna. During the summer, a reduction of 5%-7% in Russian fuel prices was agreed until the end of 2012. During the current negotiations, Gogov and Miller also discussed the implementation of the South Stream gas pipeline project, announced Gazprom headquarters. Both expressed the opinion that due to the increasing demand for natural gas in Europe, the project must be implemented. It is expected, that the gas conduit will pass along the bottom of the Black Sea and will connect the Russian and Bulgarian coasts. On our territory, the tube fork. Its northern section will continue to Serbia, Hungary and Austria, and the southern branch will extend to Greece and Italy. Initially, the conduit will transmit 15.6 billion cu m of natural gas and, subsequently, it will transfer 64 billion cu m. The first deliveries are scheduled for the end of 2015. According to expert estimates, the project will cost ˆ15.5 bn.
Source: Class (27.01.2011)

Gazprom, Bulgargaz to switch to direct gas deliveries in 2013 Russia's gas major Gazprom and Bulgarian state-run gas supplier Bulgargaz have discussed options for gradual transition to direct gas deliveries in 2013, according to a statement by the Russian company cited by RIA Novosti. At a meeting in Moscow held on January 26, Gazprom CEO, Alexey Miller, and Bulgargaz executive head, Dimitar Gogov, also talked over the joint projects of the two companies, the news agency added. The Russian company expects Bulgargaz to seal a gas delivery contract with its subsidiary Gazprom Export on June 30, 2011, which will provide for the elimination of intermediaries from the supply chain, as the unit is fully-owned by Gazprom. Should the new agreement be signed, the company will start delivering gas to Bulgaria in January 2013. By that time, the country will continue to get gas from Gazprom Export and the other two intermediaries, Overgas and Wintershall. Bulgaria purchases some 70% of its gas from Russia. According to Gazprom's preliminary estimates, Russia exported 2.6 billion cu m of gas to Bulgaria in 2010 against 2.4 billion a year earlier.
Source: Dnevnik (27.01.2011)

Research of South Stream Layout to Be Launched The research of South Stream gas pipeline layout is to start in two weeks. Yesterday, a commission composed by representatives of Gazprom and Bulgarian Energy Holding had a meeting in Moscow and chose as executor of the technological and economic grounds of the project between Gastec BG and Yuzhniyprogas. The agreement on the preliminary study will be signed tomorrow in Sofia.
Source: Standart (10.02.2011)

Sofia District Heating Company to replace 11 km of pipelines in 2011 "In 2011, Sofia District Heating Company will replace 11 km of pipelines, which is three times less than what is needed," said Stoyan Tsvetanov, company’s Executive Director, yesterday. "We know this is not enough. This figure should reach at least 30 km per year, but we have to comply with our resources. However, starting from 2012 we intend to replace at least 15 km of pipelines per year in the capital," said Tsvetanov. "We will use more of our own resources so as to reduce the number of subcontractors and to save money," said Prof. Vasco Pavlov, Technical Director. He added that the entire network in Sofia was 930 km long. Today, the company will pay BGN 90 mln to Bulgargaz.
Source: Class (10.02.2011)

Bulgargaz projects 6.3% increase in gas prices in Apr The price of natural gas in Bulgaria is expected to rise by 6.3% to BGN 541.62 per 1,000 cu m in April, when taking into account the current market indicators, state-run gas supplier Bulgargaz said in a media statement. The final decision regarding the gas price will be made by the State Energy and Water Regulatory Commission (SEWRC) at the end of March. By that time, Bulgargaz will have presented its proposal to the regulator. The future hike in gas prices follows the increase in petroleum products prices on the international markets, according to the statement. Currently, the company is appealing the regulator's decision of December 2010 to reduce the price of natural gas by five per cent. According to SEWRC, the move would allow Bulgargaz to recover its uncollected income for 2010, which is estimated at BGN 10.1 million. The gas supplier claims, however, that the sum it should get is 10 times higher.
Source: Dnevnik (22.02.2011)

SEWRC proposes a 90% increase in the price of energy from biomass The price of energy produced from plants using indirectly biomass will increase by 90%, stipulates a report of the State Energy and Water Regulatory Commission (SEWRC). The price increase is aimed at stimulating the generation of electricity and heating energy from biomass, which is not used effectively in Bulgaria at present. According to SEWRC’s proposal, investors in such projects will get BGN 378.04/MWh, up from the BGN 199.05/MWh they receive now. The price will be applicable to plants with a capacity of up to 150 kWh. For facilities with a capacity of up to 500 kWh, the tariffs will increase by 87.6% to BGN 344.29/MWh. Investors in power plants of higher capacity will get BGN 271.96/ MWh, up from BGN 168.08/MWh received until now. SEWRC projects a reduction of the tariffs for producers of electricity from solar and wind power plants. The average decline in the prices of electricity from wind power will be about 1.2%. The price of electricity produced from photovoltaics with a capacity 5 kWh will be reduced by 4.17% and will be paid at BGN 699.11/MWh. The reduction for smaller plants will be 4.26% and hence, the price of energy from them will be BGN 760.48/MWh. These changes are expected to come into force on April 1st. As of the same date, there will be new prices for natural gas. Bulgargaz has already demanded a 6.61% price hike for the blue fuel to BGN 543.05 per 1,000 cu m, VAT excluded. Meanwhile, the Russian corporation Rosatom announced yesterday that no official negotiations on the price of the Belene NPP (Nuclear Power Plant) are being held at present. Energy Minister Traicho Traikov said on BNR (Bulgarian National Radio) that no consensus had been reached with the Russian side on this issue yet. The construction of the plant, he said, will continue and an agreement will be reached during the negotiations this week.
Source: Class (14.03.2011)

Russia Threatens to Scrap South Stream Gas Line Russia is considering giving up the project for the South Stream gas line in case it meets insurmountable obstacles, Dmitry Psekov, spokesperson of Prime Minister, Vladimir Putin, says. Peskov, confirmed earlier reports the project's underwater section might be replaced with liquefied natural gas (LNG) terminals on the Black Sea. Russian Deputy PM, Igor Sechin, also stated Moscow is mulling cheaper alternatives of delivering Russian gas to Europe, including LNG terminals. The news come on the heels of failed negotiations between Moscow and Ankara where Turkey refused to agree on having the gas line pass on the bottom of the Black Sea in its economic zone. Sechin points out the Russian side does not understand Ankara's motives because Turkish partners insist "Gazprom" has not delivered economic evidence for the project's sustainability, but on the other side, they issued the permit for such study only on May 31, 2010. Experts commented that all this talk about LNG terminals is just wondow-dressing, aiming at pressuring Turkey. They say the building of such terminals would mean also their construction in Bulgaria and Romania while large tankers cannot pass through the Bosphorus, but for two months during the entire year.
Source: vesti.bg (18.03.2011)

Current liabilities of Sofia heating utility to Bulgargaz are BGN 103 million at the moment, said Alexander Petrov, manager of Licensing activity and corporate relations department of the gas company. At the end of October 2010 Sofia heating company owed BGN 34 million said Petrov. According to him the company is trying hard to repay its liabilities.
Source: Dnevnik (28.03.2011)

Bulgaria's state-run gas monopoly Bulgargaz has increased the price of natural gas for end-suppliers and consumers by 4.47% as of April 1, the company said on Thursday. The company will sell gas at a price of BGN 532.14 per 1,000 cu m, value-added tax (VAT) excluded, although it had insisted on a price of BGN 543.05 because of a rise in alternative fuel costs on the international markets. Consumers using the low-pressure grid of Bulgartransgaz will pay the state gas company BGN 539.86 per 1,000 cu m of gas, excluding VAT.
Source: Dnevnik (01.04.2011)

SEWRC approves an increase in natural gas prices of 4.47% The price of natural gas to increase by 4.47% as of today, decided the State Energy and Water Regulatory Commission (SEWRC) at a closed session yesterday. The Commission report stipulates a natural gas price of BGN 532.14 per 1000 cu. m, VAT excluded. According to the document, the price rise is due to the increase by 9% in the prices of gasoil and fuel oil on international markets. The price of the fuel, which Bulgargaz buys from Wintershall and Gazprom Export, increased by more than 9%, stated the document. The price of the natural gas extracted by the Scottish Melrose Resources company rose by 2.67%, while the supply price of Overgas decreased by 0.10%. Transit fees for gas transmission from the Romanian Isakcha compressor station to the Bulgarian border increased by 0.39%, explained Bulgargaz representatives to the Commission. According to them, the drop in the dollar/ BGN exchange rate was 0.54%. The document shows that the price of natural gas at the input of the system stands at BGN 505.22 per 1000 cu.m. In the application of Bulgargaz to the Committee, it is stated that the company wants to import nearly 607 mln cu. m. of natural gas in the period from April to June. Another 100 mln cu. m. of fuel are expected to be extracted from the deposit of Melrose Resources. Supplies of nearly 139 mln cu m of natural gas should be provided under the contracts with Wintershall. The supplies from Gazprom Export decreased by 2.1 mln cu m, and the import from Overgas remained unchanged. However, SEWRC wants to reduce by 30 mln cu m the fuel supplies from Wintershall because this was the most expensive fuel. The management of Bulgargaz planned to deliver about 167, 000 cu m of natural gas in the Chiren underground storage. SEWRC Chairman, Angel Semerdjiev said that despite the increase in the natural gas prices the cost of the district heating energy would remain unchanged. He predicted that natural gas might become cheaper in July, if oil prices stabilise worldwide.
Source: Class (01.04.2011)

French GDF Suez keen to invest EUR 100m in biomass projects in Bulgaria French energy utility GDF Suez considers investing about EUR 100 million in biomass projects in Bulgaria, agriculture minister Miroslav Naydenov said on Monday following a meeting with representatives of the company. GDF Suez plans to construct power units in four Bulgarian towns, Naydenov said, but declined to name the settlements. Spanish and Bulgarian companies have also shown interest in developing biomass projects in the country, Naydenov added. Bulgaria's new bill on renewable energy, currently undergoing second reading at the parliamentary economy committee, will stipulate a clause for connecting biomass power plants to the grid. (Dnevnik)
Source: expert.bg (05.04.2011)

Nabucco Pipeline Delayed for 2 Years over Natural Gas Supplies The much-anticipated EU-sponsored Nabucco gas transit pipeline will be delayed by two years, the Nabucco consortium has announced raised doubts of increasing uncertainty about the project. Nabucco Gas Pipeline International GmbH has pushed back the start of construction of its EUR 7.9 B pipeline to carry Caspian natural gas to Europe to 2013; thus, Nabucco is now expected to start operations in 2017 instead of 2015, as previously expected, the company said in a statement. "The timeline has changed as a direct result of the changes in the timing for gas supplies in the Caspian and Middle East regions, as announced by potential suppliers. Construction is envisaged to commence in 2013 to align the Nabucco timeline with gas suppliers," the consortium explained on its website. "Nabucco's progress has been positive so far, with the progress of the Environmental & Social Impact Assessment and concrete steps for procurement and other important work-streams. The Open Season process will start as soon as there are firm indications that gas supply commitments are in place. The Final Investment Decision will be taken consequently. We now expect first gas to flow through the pipeline in 2017. The Nabucco project continues to be driven by the needs of its customers," Reinhard Mitschek, Managing Director, Nabucco Gas Pipeline International GmbH, commented.
Source: Darik Radio (09.05.2011)

While Bulgarian state-run gas monopoly Bulgargaz and the Government were intensively negotiating new gas delivery contracts with Gazprom, Overgaz, which is 50 per cent-owned by the Russian gas major, was holding parallel talks about cheaper natural gas purchases, a source at the gas supplier told Dnevnik. This will be Overgas' second attempt to enter a direct race with national gas supplier Bulgargaz since in 2010. Overgas said it wanted to sell about one billion cu m of gas on the Bulgarian market. The amount has been freed after one of Bulgaria's contracts with Overgas expired in late 2010. The second gas delivery agreement with the company runs through 2012. Overgas' attempt to sell gas directly to consumers, competing with the state-run firm, fell through in December 2010, when state gas transmission company Bulgartransgaz refused to make space for Overgas in its pipelines. Overgas' new strategy, in addition to negotiating a competitive price edge, focuses on selling to large industrial consumers along Bulgaria's borders, who would then sign the contracts with Bulgartransgaz for the gas deliveries.
Source: Dnevnik (16.05.2011)

Turkey to sign an agreement on Nabucco with shareholders on June 6 “Turkey will sign an agreement on the Nabucco project on June 6,” said Turkish Minister of Energy and Natural Resources Taner Yildiz, quoted by RIA Novosti. The document will be signed by all the companies participating in the project – Bulgaria’s Bulgargaz, Turkey’s Botas, Austria’s OMV, Romania’s Transgaz, Hungary’s MOL and Germany’s RWE. Yildiz added that the participants in the project were trying to get a concrete answer from Azerbaijan regarding the gas supplies to Nabucco. “If Azerbaijan answers negatively, we will contact Turkmenistan, Iraq and Iran for gas supplies. The project is of great importance for Turkey and Europe,” commented the Turkish Energy Minister. According to projects, Nabucco is expected to transport some 31 billion cu m of natural gas from the Caspian region to the EU, bypassing Russia. The construction of the pipeline had to begin in 2012 and the first deliveries to be effected in 2015 but, a month ago, the Nabucco consortium announced that the implementation of the project will be extended by a year in accordance with the schedule for gas deliveries. Meanwhile, Bulgaria has requested the EU to find a solution to the issue of compulsory declaration of free capacity along the transit pipelines. This is a requirement under the third European energy liberalisation package but its application is impossible because of the confidentiality clauses in the bilateral contracts with Russia’s Gazprom. The issue was discussed during the meeting between Bulgaria’s Energy Minister Traicho Traikov and EU Energy Commissioner Guenther Oettinger. “The effective contract with Gazprom forbids Bulgaria to declare the quantity of spare capacity since it considers this data ‘confidential trade information’. Thus, our country is now between the hammer and the anvil. On the one hand, the EC threatens to sue Bulgaria if we do not declare the spare capacity. On the other hand, Gazprom threatens to sue us if we do so,” explained Minister Traikov. According to experts, the gas transiting network of Bulgartransgaz is currently operating at just 30% of its capacity.
Source: Class (25.05.2011)

Bulgaria to Sign on Nabucco Pipeline in Turkey on June 6 Bulgaria's Bulgargaz, a subsidiary of the Bulgarian Energy Holding, will participate in the official signing of an agreement on the Nabucco gas transit pipeline in Turkey on June 6, 2011. Besides the Bulgarian company, the shareholders which will sign the agreement are OMV (Austria), BOTAS (Turkey), Transgaz (Romania), Mol Natural Gas (Hungary) and RWE (Germany) Each shareholder holds an equal share of 16.67% of Nabucco Gas Pipeline International GmbH. Nabucco is estimated to cost EUR 8 B, and Bulgaria, as a partner with 1/6 of the shares, will be expected to provide 1/6 of the total sum, or about EUR 1.3 B, rather than finance just the section on its territory. Bulgaria plans to finance its share in Nabucco with a EUR 1.2 B loan from the European Investment Bank. The sides engaged in the project are waiting for a decisive answer from Azerbaijan on its possible participation. "If Azerbaijan's response will be negative, we'll contact with Turkmenistan, Iraq and Iran. This project has a great importance for both of us and Europe. That's why we can not lose time and we'll use all of the options," Taner Yildiz commented on Azerbaijan's possible participation I the project, as cited by the Azarbaijani APA agency. Nabucco Gas Pipeline International GmbH, the Vienna-based project company, has been involved in talks with the European Bank for Reconstruction and Development, the European Investment Bank, and the International Finance Corporation, a member of the World Bank Group, asking for an EUR 4 B loan. These negotiations are expected to be completed in 2011. The Nabucco gas pipeline is supposed to reduce EU's energy dependence on Russia by bringing in natural gas from the Caspian region, Central Asia, and the Middle East. (Sofia Echo)
Source: Monitor (25.05.2011)

Eurozone May Trouble Bulgaria "The Eurozone may cause troubles to Bulgaria if it collapses and the member states fail to put reign on their debt problems," economist Georgi Angelov stated. In Mr. Angelov's opinion, Bulgaria may profit from its Eurozone entry if only the zone is stable. Otherwise, it is quite possible that Bulgaria should pay some 5-10 billion euro at a possible bankruptcy of a country like Spain or Italy, Mr Angelov said further. Meanwhile it transpired that in case Bulgaria enters the Eurozone, the country may take guarantees at the accession to the European stabilization mechanism at the maximum of 2.6 to 4.2 billion euro.
Source: Standart (31.05.2011)

Gazprom threatens to redirect its exports to Asia “If the EU does not like the price of the Russian natural gas, the company can redirect its exports to Asia and particularly to China,” said Alexei Miller, Chairman of the Management Board of Gazprom JSC in an interview for Sueddeutsche Zeitung, quoted by BGNES. The daily noted that the Russian concern, which controls one-sixth of the world’s gas supplies, could in a few minutes close the valves of the pipelines, transporting natural gas to Europe. Germany now covers some 40% of its natural gas needs with supplies from Russia.The country will become more dependent after the decision for the suspension of the German Nuclear Power Plants (NPP), adopted recently by the Government, since the capacity of its Thermo – electric Power Plants operating on natural gas should be increased. The last NPP in Germany will be closed down in 2022. Therefore, the country intends to build new gas plants and to develop an energy system, based on coals and alternative energy sources. Berlin admitted that the share of Russian natural gas would increase substantially in the energy balance of the country. In this context, the Gazprom concern announced its forecasts that by 2020 Europe will need some 380 billion cu m. of gas per year, and by 2030 - 440 billion cu m.
Source: Class (06.06.2011)

Bulgaria Gets Gas via Turkey Soon Bulgaria will be able to receive natural gas via Turkey, Bulgaria’s Minister of Economy and Energy, Traycho Traykov reported after talks with his Turkish counterpart, Taner Yildiz. Both agreed on speeding up of the works on the intersystem links through which Bulgaria will receive access to natural gas from Azerbaijan. The supply of Azerbaijani gas has been contracted in an intergovernmental agreement for a billion cubic metres a year. Once the pipe is constructed, it will guarantee about 30% of Bulgaria’s annual consumption.
Source: Standart (10.06.2011)

Italy’s Eni to sell a gas conduit for supplies from Russia The Italian energy company Eni will sell its 89% stake in the TAG (TransAustria Gas) pipeline, which delivers Russian gas to Italy. The shares will be sold to the state-run Cassa Depositi e Prestiti for ˆ483 mln plus obligations to repay a credit of ˆ192 mln, Euronews reported yesterday. The agreement with TAG for gas supply is based on the “take or pay” principle which will remain in force. The company was forced to sell its assets because of the antitrust legislation in the EU. Following the accusations of the EU in February, Eni declared its readiness to give up its stake in gas pipelines Tenp (49%) and Transitgas (46% share), which supply fuel to Northern Europe, Russian energy portal reminded. Eni’s aggregate participation in the three pipelines is estimated at ˆ1.5 bn. However, the company will continue the construction of the South Stream project, to be implemented together with Russia’s Gazprom. Bulgaria’s gas connections with Greece, Romania, Turkey and Serbia, which are yet to be constructed, became part of the North-South European initiative. This was agreed by the EU energy ministers after their meeting in Luxembourg. The aim of the North-South project is to link the infrastructure of the Baltic, Adriatic and Black Sea region. The interconnector with Romania is expected to be built most quickly – by the end of next year. Our gas connection with Greece is expected to become a fact in 2015, while those with Turkey and Serbia are still at the planning stage. “In addition to the gas connections, the projected new electric transmission lines to Bulgaria’s neighbouring countries will be part of the initiative,” explained Energy Minister Traicho Traikov.
Source: Class (13.06.2011)

Bulgargaz seeks 6.91% increase in gas prices Bulgaria's state-run gas monopoly Bulgargaz has asked the country's utilities regulator to raise the price of natural gas by 6.91 per cent to 568.92 leva a 1000 cu m from July, the company said on June 10 2011. A month earlier, Bulgargaz said it would seek a seven per cent increase in gas prices to 570.05 leva a 1000 cu m. The final price will determine the increase in heating and hot water tariffs, which are also expected to be revised in July. According to estimates of the State Energy and Water Regulatory Commission (SEWRC), the spike in heating prices will be up to 10 per cent. The proposed increase, however, does not include the anticipated rise in gas prices. SEWRC will set the new tariffs for gas, heating and hot water in mid-June. The proposed hike in gas prices follows the increase in petroleum products prices on the international markets, Bulgargaz said.
Source: Dnevnik (13.06.2011)

Court to rule on Chimco’s bankruptcy A team of the District Court in Vratsa will discuss today the reopening of bankruptcy procedures against Chimco on the request of the main creditors - Bulgargaz and the National Electric Company (NEK). According to the court’s spokeswoman Snezhana Naumova, the creditors demand a renewal of the insolvency procedures because the court-approved rehabilitation plan of New Chimco is not being implemented and the acknowledged liabilities to the two companies are not being repaid. The rehabilitation plan was approved by court in 2007 when New Chimco purchased Chimco and undertook to pay off BGN 54 mln to Bulgargaz and more than BGN 21 mln to NEK. The court expertise for the implementation of the rehab programme is ready. According to New Chimco, after 2007, it has paid BGN 5 mln to the budget, BGN 1.3 mln to Bulgargaz and nearly BGN 600,000 to NEK.
Source: Class (14.06.2011)

There is still no clarity on the separation of the transmission companies from BEH The Bulgarian state is still not clear as to when transmission companies such as the Electricity System Operator (ESO) SPLTD and Bulgartransgaz SPLTD will be separated from the structure of the Bulgarian Energy Holding (BEH). This became clear from the responses of the Ministry of Economy, Energy and Tourism after an inquiry of Klassa daily. The separation from BEH structures was imposed by the European Commission (EC) and the requirements of the third liberalisation package, which allow third party access to the network. It should have happened by the end of March. The Establishment of the Minister of Economy, Energy and Tourism, Traicho Traikov, expects the separation of transmission companies to commence after the adoption of the drafted amendments to the Energy Act. The Economy Ministry failed to clarify when this will happen. The Ministry's idea is for ESO and Bulgartransgaz to become independent transmission system operators under the management of the Energy Minister, but to remain within the BEH vertical structure. When this happens, a two-tier management system will be introduced into the companies, while half of the members of the Supervisory Board of the enterprises will be approved by the SEWRC (State Energy and Water Regulatory Commission). The Energy Ministry does not expect the EC to instigate criminal proceedings against Bulgaria because of unfulfilled commitments. The reason is that Brussels has discovered that many EU member-states have failed to adopt the requirements of the Third Energy Package into their legislation. The Bulgarian energy sector has a particularly serious problem with respect to NEK (National Electric Company) and ESO since part of the electric network which must be owned by the Operator serves to secure loans withdrawn from the public service provider. SEWRC reported that Austrian EVN has signed an electricity supply contract with NEK. The same contracts are expected to be inked by the Czech CEZ and the German E.ON. So far, the companies sold electricity to their Bulgarian subscribers under no signed contracts with NEK and without any clarity on the entity which should be held accountable. The issue has already been regulated, said yesterday SEWRC Chairman, Angel Semerdjiev. No comments to this article. Add the first one.
Source: Class (15.06.2011)

Kiril Temelkov is replacing Ivan Drenovichki at the post of CEO of the Bulgartransgaz company, the Bulgarian Energy Holding, BEH, announced Thursday. Ivan Drenovichki, executive director of Bulgartransgaz, was removed from the position one year and a half after taking office. Temelkov, 37, has graduated from the University of National and World Economy in Sofia with a major in Economy and Management of Trade. He has extensive experience in the energy sector and has worked for Bulgargaz and Bulgartransgaz, where he has been the Head of the Trade Department from 2000 to 2008. Since May, 2010, Temelkov is the Bulgarian representative at the Nabucco gas pipeline and manager of Nabucco Gaz Pipeline Bulgaria. State-owned Bulgartransgaz is a natural gas transmission and storage system operator and a subsidiary of BEH. Bulgartransgaz is part of a gas grid interconnection project with Romania, which, according to the Minister of Economy, Energy and Tourism, Traicho Traikov, is to be completed by mid-2012. The gas transmission operator was involved in an argument with private natural gas supplier Overgas after denying the Bulgarian-Russian firm access to its pipeline grid.
Source: Darik Radio (24.06.2011)

Electricity, central heating and gas prices to increase as of July 1 “As of the beginning of next month, electricity, central heating and natural gas prices will increase,” Angel Semerdjiev, Chairman of the State Energy and Water Regulatory Commission (SEWRC), announced yesterday. The price of heating energy will increase by 6% on average, natural gas prices will go up by about 5% and electricity will be hiked by 2%. The price of central heating will rise because of the more expensive gas. The highest price increase in central heating will be in Varna - by 8%, then comes Russe – by over 7%, and Plovdiv - by 6%. The Central Heating Utility in Sofia will raise its prices by 4%; the price hike in Pleven will be by 5%, and in Vratsa – by 3%, according to SEWRC’s estimates. The price increase in Veliko Tarnovo where central heating is the most expensive at present will be trifling (between 1.5% and 2%). “The liabilities of central heating utilities to Bulgargaz exceed BGN 117 mln at present,” the company’s Executive Director, Dimitar Gogov specified yesterday. The Central Heating Utility in Sofia is the largest debtor with liabilities of almost BGN 70 mln. “Bulgargaz faces liquidity and financial difficulties because of its huge receivables,” explained Gogov.
Source: Class (29.06.2011)

Bulgaria's Govt Tries to Negotiate Lower Gas Prices with Gazprom We will sign a long term contract for supply of natural gas with Russia's Gazprom, provided that a lower price is agreed, Bulgargaz CEO Dimitar Gogov said. In his words, the government will seek to sign a short term contract if the gas prices are higher. "We will pump natural gas into the storage facility at Chiren, provided that the central heating companies pay their debts to Bulgargaz before September 2011. The heating utility of Sofia, for instance, owes 70 million levs to the state natural gas company.
Source: Standart (29.06.2011)

In the EU, natural gas is most expensive to Bulgarians The average price per gigajoule of energy from natural gas in Bulgaria is ˆ11.98, while the EU average is ˆ15.88, Eurostat reporrted. Natural gas is cheaper in Estonia, Latvia, Romania, the UK, Turkey and Croatia. If we take into account the purchasing power parity of the EU countries, it turns out that natural gas in Bulgaria is the most expensive for the population –26.92 conditional Euros, or nearly 70% above the EU average. Given the average income in our country, the price of 100 kW of electricity for Bulgarians is 18.65 conditional Euros, while the average price of electricity in the EU is 17.08 conditional Euros. The consolation for Bulgarians in this respect is that they are gradually catching up with Europe. The average price increase of electricity in Europe for the second half of 2010 was 5.1% on an annual basis and in Bulgaria it was only 1.4%.
Source: Class (01.07.2011)

Bulgaria Produces 50% of the Gas It Needs In the nearest future about half of the natural gas consumed by the Bulgarian industry will be home-supplied, calculations show. "This will be made possible once we start exploiting the newly found gas deposits near Lovech, something which will not take long," said Bulgaria's Minister of Economy and Energy, Traycho Traykov. To his words, the finds are worth 10 billion cubic metres; annually about one billion cubic metres will be extracted. For the last few years Bulgaria has consumed about three billion cubic metres of natural gas a year. Along with the newly-found gas deposit in Lovech, the other fields at the Bulgarian Black Sea coast - in Kavarna and Kaliakra will be able to satisfy half of the annual consumption in the country. This will allow lower prices for the Bulgarian industry and heating companies as the Bulgarian-extracted gas will cost less than the gas currently imported from Russia. The news for the new field comes just in time while Bulgaria is in negotiations with Gazprom for a new contract of supply and one of the main issues is the price of Russian gas. The Standart has been recently told by no other but Dimitar Gogov, Bulgargaz CEO that the contract would be a long-term one only if the set price is suitable for Bulgaria.
Source: Standart (06.07.2011)

Kremikovtzi’s bondholders to receive only BGN 80.5 million Holders of Kremikovtzi’s EUR 325 million bond emission will receive only BGN 80.5 million after the sell off of the bankrupted steel smelter. Bond holders remanded BGN 927.3 million but will receive only 8.6% of their money. First Investment Bank will receive almost BGN 42 million (87.1% of the debt). Salaries and taxes will be paid in full. The smelter will repay a total of BGN 274.5 million. NEK, Bulgargaz and the State Railways have credited Kremikovtzi with BGN 230 million but so far it is unclear whether they will receive anything at all.
Source: Dnevnik (19.07.2011)

Dimitar Gogov, Executive Director of Bulgargaz JSC: In two and a half years, we can have a gas connection with Turkey - Mr. Gogov, does Bulgargaz JSC expect to receive money from the liabilities due to be paid by Kremikovtzi JSC? - We will not receive any funds. We know this and we said so. Even when we were forced to deliver natural gas to them, we knew that the debt was not secured and, given possible insolvency proceeding, Bulgargaz’s claims would not be satisfied. We won on May 15, 2008, when we ceased our supply of natural gas to the plant and stopped the increase in this debt of over BGN 106 mln . The forced supply of natural gas to Kremikovtzi was not normal commercial practice. Our desire was to stop the supplies when it became clear that the plant does not meet the repayment schedule. - Do you expect for shale gas to be discovered in our country? How would it influence the price of natural gas? - Of course, it is good for shale gas to be discovered here, especially if it is produced locally. Such a discovery could support the diversification of gas supplies and thus, of course, reduce the effect of international energy markets on the domestic market. We should not, however, have illusions that the extraction of shale gas in the country could drastically reduce prices. In the end, we are talking about a market commodity and there is no owner who does not wish to sell his products at the most competitive prices. In general, the price of the fuel extracted from shale is a matter of proven costs. You can see that this fuel became attractive only after the current levels of oil exceeded the record-high of $100 per barrel. Apparently, the market price of natural gas after these levels determines the economic logic to shift to production of shale gas. At $20, $30, or $50 per barrel this was not profitable. - What is the progress in the preparation for the signing of a new contract for the supply of natural gas with Gazprom? - Gazprom Export has offered us a contract, we are analysing it and are coordinating our positions. There will be a new round of negotiations then. These will start when we reach an agreed, joint position with the Bulgarian Energy Holding (BEH). - Do you expect that the contract will be prepared soon? - This is part of our position and we will insist before BEH that we want to receive, as soon as possible, a coordinated and approved text of the contract, in order to be able to start drafting the contracts with our customers. Thus, they will have enough time to become familiar with the conditions, and outline their production and sales policies. - Can all this happen this year? - It is possible but everything depends on our mutual expediency. The new treaty will enter into force on January 1, 2013 - At what stage are the negotiations with Turkey on the gas supplies from there? - Specific negotiations on gas supplies, particularly with the Turkish Botas company, can be launched only when we know that there is an agreement between the Turkish operator and Bulgartransgaz for the construction of the interconnector. Meanwhile, we are having serious talks with gas producers in the Caspian region because they want to use the Turkish transmission network. They are ready to negotiate with us about a delivery point at the Bulgarian-Turkish border, which frees us from the obligation to negotiate with Botas. I hope that, within the next few months, there will be greater clarity about the supply. We have informed BEH, Bulgartransgaz and Botas that we are ready to start the supply of gas from the moment when the connection is ready - as early as January 1, 2013. - And why are negotiations with the Turkish Setgaz company on the import of fuel to Bulgaria not being held? - Setgaz is more or less an additional unit in the chain, so far as I am familiar with the documents submitted in their proposal. They want to use Botas’s capacity in the same way. I think that there is no need for the requested capacity to be renegotiated. - Can these talks serve as an argument for the signing of the new contract with Gazprom? - The two issues should not be connected. They are related only in the commercial program of Bulgargaz, i.e. what quantities of natural gas we can get and where these can come from. - Will the "take-or-pay" clause continue to exist in the new contracts with the Russian side? - There is no contract in the world without a clause that guarantees the supplier that the quantities of natural gas will be taken or the buyer would suffer penalties. The question is how flexible this clause is. Recently, more and more countries seem less willing to increase this flexibility. This imposes on buyers the need to implement such programmes and methodologies in order to be able to deliver the amounts received or to preserve them, but intervention on the part of the producer will be more and more insignificant. - What is your forecast for gas prices and do you expect a new price increase by the winter season? - Tell me what happened with fuel prices over the last ten days. You cannot expect the trend in gasoline and fuel prices to be one and for this trend in natural gas prices to be entirely different. And it is clear that the links between fuels and natural gas are made so that this trend is smoother, in order for such peaks to be avoided. The current level of fuel prices is not reflected fully in the price of gas, so the forecast for the next six months is that the price increase cannot be stopped. The bad news is that previous decisions of the State Energy and Water Regulatory Commission to limit the price increase will boost this trend.
Source: Class (22.07.2011)

Bulgargas bought Russian gas at higher price in 2010 despite agreements A year after Bulgaria held negotiations with Russia to cut the price of natural gas deliveries to the country, a report by state-run gas monopoly Bulgargas showed that the company bought gas in 2010 at a price 12.48 per cent higher than the previous year. According to the report, published behind schedule in late July, the cost of gas was the most expensive in the last quarter of the year. In July 2010, Bulgaria and Moscow reached an agreement to trim gas costs and eliminate two of the intermediaries that supply gas to the country. Currently, Bulgaria has contracts to buy gas from three intermediaries, all partially or outright owned by Russia's state-owned gas company Gazprom - Overgas, Wintershall and Gazpromexport. The agreements expire in late 2011. So far, the parties have failed to arrange new terms for gas supplies after 2012, although they were expected to settle the issue in mid-2011. In 2010, Bulgargas bought from Russia 2.48 billion cu m of gas.
Source: Dnevnik (08.08.2011)

Nabucco's environmental assessment to be ready by July 2012 Òhe Environmental Impact Assessment of the pipeline should be ready by July next year,” announced officials from the Nabucco Gas Pipeline International project company, yesterday. They explained that this was the deadline for completion of the evaluation activities. The Italian D'Appolonia company was selected as a consultant on the project last month. It is in charge of harmonizing the standards and requirements of the financial institutions from different countries and preparing all the necessary documentation, write reporters from the Azerbaijani Trend paper. Once the evaluation of the consultant is approved, the construction of Nabucco can be launched. The start of the construction is planned for 2013. An archaeological research was already completed along the pipeline in Bulgaria. The Bulgarian Energy Holding is a shareholder in the Nabucco pipeline on the part of our country. The Turkish Botas, Romanian Transgas, Hungarian MOL, Austrian OMV and German RWE are the other participants in the project. The Nabucco project is expected to deliver the first quantities of natural gas to the European markets in 2017. Turkmenistan and Azerbaijan are planned to be the main suppliers, bypassing Russia. Some 31 bn cubic meters of gas per year will be transported through the future pipeline. At the end of last week, experts from the US PFC Energy consulting company stated that only the gas connections between Turkey, Greece and Italy (project ITGI) would be built on the Balkans by 2020. “We can think about pipelines of the rank of Nabucco at a later stage”. The experts from the Nabucco project company do not exclude the possibility for natural gas to be delivered for the pipeline from Russia as well. Kazakhstan, Iraq and Egypt are other potential suppliers, experts explained.
Source: Class (10.08.2011)

Bulgargaz forecasts a 20% increase in the price of natural gas as of October 1 Bulgargaz forecasts an increase of 19.98% in the price of natural gas as of the fourth quarter of the year and the prices will reach BGN 668.57 per 1,000 cu m. There will be a price hike of BGN 111.35 per 1,000 cu m, announced the company. This is a preliminary estimate, which the supplier must draw up one month prior to the submission of an official proposal to the State Ånergy and Water State Regulatory Commission (SEWRC). SEWRC representatives substantiated the requested cost rise with the high prices of the oil products alternative to natural gas (fuel oil with a sulphur content of 1% and 3.5% and gas oil with a sulphur content of 0.2%) in recent months along with the highest exchange rate of the Euro against the US dollar and the increased imports of natural gas in the fourth quarter of 2011. SEWRC is expected to deliver its official decision on the final prices on September 9, 2011. According to the company, the price increase of entire 19.98% complies with the stipulations of the Ordinance for Regulating the Prices of the Natural Gas and does not comprise the uncollected receivables of Bulgargaz for previous periods. According to the gas company, the amount still due is over BGN 70 mln. Should the gas price increase, it will lead to a rise in the cost of heating energy, commented the Energy Expert, Atanas Tasev. In his words, there is a simple formula since around 70% of the cost of the heating energy are at the expense of the natural gas price. "However, the price of the heating energy should increase by around 14%. There is no alternative. The Regulator will try to avoid it, but finally it will raise the heating price a bit." reckoned Tasev.
Source: Class (15.08.2011)

Bulgargaz expected to propose new gas prices Today, Bulgargaz is expected to submit its proposal for new natural gas prices as of October, said yesterday the Chairman of the State Energy and Water Regulatory Commission (SEWRC), Angel Semerdjiev. He again predicted that the surge in fuel prices would not be higher than 10%. The gas company projected a price increase of 20 percent.
Source: Class (09.09.2011)

Natural gas and district heating prices to increase by more than 5% Natural gas prices will increase by 6.67% as of Saturday, October 1, decided the State Energy and Water Regulatory Commission (SEWRC) yesterday. “Thus, 1000 cu m of natural gas will cost BGN 594.37, VAT excluded,” said Head of SEWRC Angel Semerdjiev. The proposal of Bulgargaz JSC was for a price increase of the natural gas of 13.86%, but the Commission reduced this percentage. SEWRC relies on the local production in order to limit the increase in fuel prices. Gas extraction in the Black Sea will become more expensive by 22%, said Dimitar Gogov, Executive Director of Bulgargaz. The company, which produces gas near the town of Kavarna - Melrose Resources Plc, demanded higher prices, and the proposal has already been submitted for approval to the Bulgarian Energy Holding. Gogov added that despite the price increase in the local gas production, it remained by above 30% cheaper than the imported natural gas. “The district heating prices will rise next month because of the surge in the natural gas prices. The District Heating Company (DHC) Pleven will record the biggest increase of 4.77% to 71.58 BGN / MWh, VAT excluded,” said Angel Semerdjiev. In Sofia, the district heating prices will be up by 3.35% to 80.08 BGN / MWh, and in Plovdiv, the increase is 3.75% to 91.95 BGN / MWh. In Vratsa, the heating energy prices will jump by nearly 3% in the new season, to 83.98 BGN / MWh. In Bourgas, the increase will be 2.12% to 68.85 BGN / MWh. The district heating prices in Ruse, Pernik, Sliven and Varna will rise by less than a percentage, and in Gabrovo they will remain unchanged. “A reduction of the service price will take place in the town of Veliko Tarnovo alone - by 1.38%, but the district heating there is the most expensive. The price increase of hot water and district heating energy from July must be added to these prices as well, so the household bills will increase by another 4-5%,” said Semerdjiev.
Source: Class (28.09.2011)

Bulgaria's energy regulator approves 6.67% increase in gas tariffs Bulgaria's State Energy and Water Regulatory Commission (SEWRC) agreed at a meeting on September 27 2011 to increase natural gas prices by 6.67 per cent to 594.37 leva a 1000 cu m from October 1. The regulator also approved a hike of up to 12.12 per cent in heating tariffs. Originally, SEWRC had estimated that the price of gas should go up by 8.6 per cent, but later found buffers which allowed it to trim the proposed increase. SEWRC expects that the country will negotiate favourable gas tariffs with Scotland's oil and gas company Melrose Resources, which is currently engaged in gas extraction near Kaliakra, in the Bulgarian sector of the Black Sea. Bulgaria's state-run gas monopoly Bulgargas had been seeking an increase of 13.86 per cent in gas prices to 634.44 leva a 1000 cu m from October. The company said on September 27 that if the proposed spike in gas tariffs was delayed, the country will see a steeper increase in January.
Source: Dnevnik (28.09.2011)

European Commission opens probe into Bulgaria's gas market The European Commission (EC) initiated on September 28 2011 unannounced inspections at four Bulgaria-based gas companies, namely Bulgarian Energy Holding (BEH) and its two subsidiaries Bulgargas and Bulgartransgas, as well as private company Overgas, which is 50 per cent-owned by Russian gas major Gazprom, the companies said. In its statement, BEH also said that the probe was being conducted at dozens of companies in 10 countries from central and eastern Europe. Bulgaria's Commission for Protection of Competition (CPC) has also taken part in the check, the regulator said without providing further information. The Commission is examining whether gas companies comply with the rules for free competition in trade and distribution of natural gas, and whether they fulfill the commitments related to access of third countries to the gas network, which may have been violated unilaterally or through bilateral agreements. The inspections are expected to be completed in up to a week. The last check of Bulgaria's gas market took place in 2009. The probe was carried out by CPC, which found no breaches in free competition rules.
Source: Dnevnik (29.09.2011)

Traikov negotiates energy cooperation with Kazakhstan The Minister of Economy, Energy and Tourism, Traicho Traikov will participate in the upcoming Energy Forum in Kazakhstan, which will examine the possibilities of supply and transit of natural gas through Bulgaria. The Forum should be opened by the President of Kazakhstan, Nursultan Nazarbayev and will include the Prime Minister Kazakhstan, Karim Massimov, the EU Energy Commissioner, Gunther Oettinger, the former New York Mayor Rudolph Giuliani as well as EU energy ministers and international energy companies. Energy Minister, Traikov will deliver a statement on the role of the Caspian region for the EU Energy Security. Bulgaria and Kazakhstan will cooperate in the fields of investments and innovation as well as in relation to the development of transport infrastructure for oil and gas. This is stipulated in the agreement on economic cooperation between the two countries, signed in Astana by Minister Traikov and Deputy PM and Minister of Industry and New Technologies of the Republic of Kazakhstan, Asset Isekeshev. As the most Eastern part of the EU, Bulgaria is an excellent platform for influx of goods and investments from the Asian region to the European markets, explained Traikov after signing the agreement. Kazakh companies may bid in the tender contests for granting concession to the Ports of Burgas and Varna. Russian company Gazprom will deliver the natural gas through private Turkish providers, after the Turkish state-owned Petroleum Pipeline Corporation Botas withdrew from the supply contract, stated the Vice President of the Russian company, Alexandar Medvedev, quoted by Interfax. At present, Gazprom supplies about 60% of the natural gas to Turkey.
Source: Class (04.10.2011)

Sofia Central Heating Utility to declare a profit in 2011 “The Sofia Central Heating Utility expects to post a profit this year,” said yesterday its head Stoyan Tsvetanov. He explained that by the end of September, the company had succeeded to repay part of its outstanding debt to Bulgargaz which was reduced from BGN 107 mln to below BGN 70 mln. According to Angel Semerdjiev, Chairman of the State Energy and Water Regulatory Commission, all heating companies in Bulgaria are ready for the coming winter season. The only exception is the Shumen Central Heating Utility, but SEWRC does not expect any problems with the supply there. Semerdjiev does not expect Bulgaria to be sanctioned by the European Commission after the ongoing inspections at the gas companies in our country. “I do not know of Bulgartransgaz having refused access to its network to Overgas,” explained Semerdjiev. A year ago, the company sent its request to supply fuel directly to Bulgarian consumers, but has not received any response from the Bulgarian Energy Holding, its representatives claim.
Source: Class (05.10.2011)

Bulgargaz demands that Shumen DHC declare insolvency The Shumen District Court initiated legal proceedings against Shumen DHC for declaring the insolvency of the company, announced BGNES. The claim was filed by Bulgargaz which lodged its plea with the Shumen District Court on October 4, explained the presiding judge, Nelly Batanova. In September, Bulgargaz CEO, Dimitar Gogov explained that the company is preparing documents for lodging a claim against the Shumen heating utility. The company's overdue debts to the gas supplier amount to BGN 18 mln, while annual fuel consumption reaches about BGN 3 mln. Shumen DHC has been experiencing financial problems with its payments over the last 6 years, while, since March until now, the company has not transferred any funds to Bulgargaz. The deal with Titan-AC SPLTD, which bid to purchase the indebted DHC, also failed.
Source: Class (07.10.2011)

Central Heating Price Goes Up in Bulgaria The price of central heating will increase again in Bulgaria. As of January 2012 the Bulgarians will pay higher bills for their central heating. This will be the third increase after the hikes in July and October. Presently, the central heating has gone up in price by 7% on the average. The hike in January 2012 will be by about 6%. The reason for the next increase of the price of central heating is the forthcoming introduction of excise on natural gas which is used as fuel by the central heating companies. The ministry of finance plans a rate of 1.70 levs for a gigajoule which will increase the price of the natural gas by about 8%. "If the excise comes into force, this will inevitable increase the final price of natural gas," stated the chairman of the State Energy and Water Regulatory Commission Mr Angel Semerdjiev. The next increase of the price of central heating will make the bills for January by 30 levs higher compared to the same month of 2011.
Source: Standart (12.10.2011)

Prices of natural gas to increase next year "Fuel prices will rise by about 4 to 8% if an excise duty is introduced on natural gas," said the Chairman of the State Energy and Water Regulatory Commission, Angel Semerdjiev yesterday. The proposed taxation is stipulated in the bill for amendments to the Excise Duties and Tax Warehouses Act, which is being drafted by the Ministry of Finance (MOF). If natural gas is used as fuel for cars (known as methane), the rates will range around BGN 1.70 per gigajoule. But if it is used for heating, the excise duty will be BGN 0.20 per gigajoule. Only the natural gas for domestic use remains with a zero tax rate, explain officials from MOF. The bill stipulates an increase in the excise duty on diesel oil and kerosene as well - from BGN 615 to BGN 630 per 1000 l. End users would have to pay the VAT in addition to the new excise duty rates. "The energy regulator does not control tax policies and therefore those duties will be directly included into the prices of natural gas," said Semerdjiev. An increase in the district heating prises is likely to take place as of next year, due to those excise duty rates, because most of the of district heating plants operate on gas. In September, Dimitar Gogov, Executive Director of Bulgargaz announced that he was likely to request a further increase in natural gas prices as of January, which also might influence district heating prices.
Source: Class (12.10.2011)

EC earmarks ˆ9.1 bn for improving energy infrastructure The European Commission (EC) intends to allocate ˆ9.1 bn to energy projects in the 2014-2020 period, reported Reuters, citing a draft document, to be considered by Brussels. EC wants to get additional powers allowing it to reject objections and accelerate energy projects that are strategic for the community. The funds are less than 1% of the EU budget for the period, but it is for the first time that they include costs for energy infrastructure. Under certain conditions, it is possible to ignore public objections against the projects if these are important enough, the draft document stipulates. The Nabucco gas pipeline, which is expected to reduce Europe’s dependence on Russian gas supplies, is currently viewed as such a project. Therefore, some of the measures are aimed exactly at improving the gas infrastructure of the countries and connecting the different networks. The EU incentives will also be spent on a common offshore electricity grid in the North Sea and the Baltic Sea region. The document projects the creation of a new position within the EC structure - a European coordinator of the energy projects, which are of particular importance to the community. However, the document does not specify how the European coordinator will report on the projects to EU Energy Commissioner Gunther Oettinger. The new measures are expected to become a means of attracting funds from the private sector for the construction of electricity and gas infrastructure, added Reuters.
Source: Class (13.10.2011)

Bulgarian Launches 17 Companies in CEE top 500 Businesses Seventeen Bulgarian companies have claimed their place among the top 500 businesses in Central and Eastern Europe for 2010. This becomes clear from Coface third annual ranking: Top 500 in CEE. Bulgaria's LukOil refinery has been ranked 29th among the best-performing companies in the thirteen former Soviet satellites, while LukOil Bulgaria is ranked 71st. The copper smelter of the German company Aurubis in the town of Pirdop, some 70 km to the east of Sofia, and Bulgaria's electric utility NEC have also been tagged as flagships of CEE business, along with the natural gas company Bulgargaz, the Bulgarian business of OMV, the energy utility CEZ, Cosmo Bulgaria Mobile, part of the Cosmote group, METRO Cash&Carry, and NPP Kozloduy. The energy utility E. ON, Stomana Industry and Kaufland Bulgaria have clung to the 472nd, 491st and the 495th place on the rankings. Bulgaria's seventeen best performing companies have declared profit for 2010 in the amount of 14.3 billion euro, which is an increase by 15% from a year ago. In terms of revenues, Bulgaria ranks seventh among the CEE countries.
Source: Standart (09.11.2011)

Tsvetan Vasilev, Chairman of the Supervisory Board of CCB: CCB is the largest net creditor of the energy system in Bulgaria Tsvetan Vasilev, Chairman of the Supervisory Board of Corporate Commercial Bank (CCB) commented that crediting in Bulgaria could be boosted through projects related to energy infrastructure and infrastructure in general – roads, ports and airports. In relation to Bulgarian National Bank (BNB) data that CCB’s profit until end-September 2011 was BGN 45 million, or about BGN 10 million less compared to the same period of 2010, Mr. Tsvetanov said the bank had planned such a reduction in its earnings and it was related to its conservative policy. He noted that the bank had a mere 1% of bad loans due to the different approach it had towards financing projects related to real estates. Regarding the widely discussed topic of state money deposited in CCB, Mr. Tsvetanov said the state did not have any money deposited in CCB and if it did, it was secured by government bonds. As for companies that were partly owned by the state, he admitted that several companies, most of which from the energy sector, were clients of the bank, but they had no more than 10% of their total assets deposited in CCB. He also emphasised that CCB was the largest creditor of Bulgaria’s energy system. As for CCB’s plans for 2012, Mr. Tsvetanov said that the bank had no intention to change the priorities that it had outlined in 2000. Ever since Bulbank sold its share in CCB, the bank had focused on sustainably developing sectors, such as infrastructure and export-oriented manufacturing that were less vulnerable to the crisis.
Source: Class (14.11.2011)

Bulgaria's Gas Supplier Offers 17.61% Price Hike in Q1 2012 Natural gas in Bulgaria should cost BGN 699.05 per 1000 cubic meters, VAT excluded, in Q1 2012, or 17.61% over the Q4 2011, according to preliminary estimates of Bulgargaz. Bulgargaz, which is the sole public supplier of natural gas for the territory of Bulgaria, is mandated to announce prices a month before the submission of their quarterly price requests with the State Commission for Energy and Water Regulation (DKEVR). In 2011, all quarterly tariffs approved by the energy watchdog were lower than Bulgargaz' proposals and it managed to downsize natural gas rates by a total of 14.49%. According to the gas monopoly, this fact, combined with the high cost of alternative fuels, is the main reason for the newly released gas price forecast. Another factor to take into account, according to Bulgargaz, is the 3.65% increase in the USD/BGN exchange rate. Apart from that, Bulgargaz warns that the 3.65% increase in the USD/BGN exchange rate The final proposal of Bulgargaz EAD for gas prices in Q1 2012 will be announced on December 09 2011, when it will be officially submitted with DKEVR. Bulgargaz requested a 13.86% increase in gas rates for Q4 2011 but the energy watchdog slashed the increase to 6.67%.
Source: Dnevnik (15.11.2011)

Bulgargaz demands a 17.65% price increase in 2012 Yesterday the state-owned Bulgargaz company offered the price of natural gas to increase by 17.6%, in 2011. The company demanded that natural gas be raised by BGN 104.68 per 1000 cu m and its price be set at BGN 699.05 per 1000 cu m (VAT excluded), as of January 2012. “The increase is needed because of the rising prices of oil and gas oil on the world markets and because of the higher exchange rate of the US$ against the BGN,” stated managers from the gas company. According to their data, the US$ has appreciated by 3.65% against the BGN over the last three months. “The price should be increased because of decisions of the State Energy and Water Regulatory Commission, resulting in a total decline of 14.49% in fuel prices, which have been reduced four times recently,” explained officials from the public provider. They did not make it clear whether they still expected payment for the quarter. If the proposal of Bulgargaz is accepted, the heating energy in the country would inevitably rise by over 10%. So far, the energy regulator has always found inner reserves in order to mitigate the price increase of natural gas. Experts from the SEWRC even stated that they did not expect any change in the price of the heating energy this winter. On 9 December, the gas company will submit a formal proposal for the new prices. Meanwhile, it became clear that the Russian Gazprom company is ready to review its gas prices for European consumers, posted the Russian Novye Izvestia daily. According to the release, the European partners of the Russian company are dissatisfied with the supplier’s dictate and started to seek a review of their contracts last year. Natural gas prices were reduced as a result of negotiations or court decisions for some of the countries. The prices of Russian gas for European consumers increased by 15% in the last year alone.
Source: Class (15.11.2011)

Bulgaria makes sure to start receiving Azeri gas within two years "The gas pipelines via Turkey and Greece are the shortest way to supply natural gas from Azerbaijan. We have done what it takes to make sure that within two years Bulgaria will have a real opportunity to receive Azeri gas according to its needs," Bulgarian Economy, Energy and Tourism Minister Traicho Traikov told Azeri Industry and Energy Minister Natig Aliyev. "Over the last two years, Bulgaria has taken real steps to diversify its gas supplies by beginning to work actively on building gnterconnectors with its neighbours. The interconnector project with Greece has advanced most of all. It will allow supplies to begin in late 2013," Traikov said. The two ministers concurred that other projects for transiting Caspian gas, including compressed and liquefied gas, via the Black Sea also require in-depth analysis. The projects can be implemented rapidly and successfully through coordinated action and a common supply concept, Traikov said. Aliyev said Azerbaijan has 750,000 million cubic metres of natural gas reserves and good prospects of exporting the fuel.
Source: 3e-news (17.11.2011)

Bulgaria Seeks to Amend Contracts with Gazprom The Bulgarian government will insist on amending some of the clauses in the gas transit contracts with Russian Gazprom to meet the EU requirements for competitive natural gas market, said sources of the Ministry of Energy and Economy after the EC declared that it launches a lawsuit against Bulgaria and Romania over failing to obey the gas market rules. The EU requires that every state should ensure access to its network to all third countries on equal footing to observe the fair competition rules. Bulgaria has largely met the EU requirements with the exception of gas transit contracts concluded with Gazprom in 2006.
Source: Standart (25.11.2011)

BEH to select a consultant for the separation of ESO from NEK The Bulgarian Energy Holding (BEH) will seek a consultant to make an analysis on the options for separation of the Electricity System Operator (ESO) from the structure of NEK (National Electricity Company), stated yesterday Deputy Minister of Economy, Energy and Tourism Delian Dobrev during the forum dubbed "The impact of low-carbon investment on the economy". The separation of the Operator should start by the middle of next year. The European Commission has set as final deadline the end of March 2012, but this could hardly happen. The reason for the delay is that the ESO assets were pledged as collateral for NEK's loans. The drafted amendments to the Energy Act will also regulate the separation of the System Operator in order to comply with the EU requirements, explained Dobrev. He expects the amendments to be discussed by the Council of Ministers in early December and the Bill to be debated in Parliament by the end of the month. By the middle of next year, it is expected that the contract clauses, signed with Gazprom for natural gas transit to our country, will be renegotiated. The Russian company is not willing to announce the spare capacity of the pipes in our country under the pretext that it is a trade secret. However, the EU instituted legal proceedings against Bulgaria for the lack of free gas market. According to Dobrev, 90 percent of the EC requirements have already been implemented and the rest will be fulfilled at the beginning of next year. In 2012, a new contract should be signed again with Gazprom for gas supply to our country. However, the negotiations on both contracts are not related, expressed confidence Dobrev. The current contract for natural gas supply expires at the end of 2012 and the negotiations on its resigning are chaired by Bulgargaz.
Source: Class (29.11.2011)

Excise duty on natural gas to be introduced as of next year. For the first time, excise duty on natural gas would be introduced as of 1 January next year, decided the Parliament yesterday at the discussion of the amendments to the tax acts. The excise will amount to BGN 0,85 per gigajoule (GJ). According to experts, the final fuel price will increase by about BGN 0.3-0.4 per liter. Excise duties will not be levied on natural gas used for domestic needs and if the fuel is used for heating farm buildings, the excise duty will stand at BGN 0.10 per GJ. Next year, the price of diesel fuel will also go up by about BGN 0.2 per liter. The rate will enter into force as of the beginning of next year, while methane will be levied an excise duty as of June 1 next year. The UDF (Union of Democratic Forces) declared itself against the introduction of higher excise tax rates. ''Our motive was that 2012 will be a difficult year for the business sector and the population. According to us, there are not sufficient grounds for rising the excise duty rate abruptly, commented to Klassa daily, the MP Kircho Yordanov. ''We could wait until 2013 and if the economic situation improves we could proceed with a gradual increase,'' stated he. The EU directive obliges us at the end of 2013 to harmonise our excise duty rate with the EU average, but nobody forces us to do it earlier, reminded Dimitrov. Leftist lawmakers demanded in their turn that the effect of the flat tax imposition should be mitigated.
Source: Class (08.12.2011)

Chevron and KazMunaiGaz demand shares in the oil pipeline to Greece“The American Chevron company and the Kazakh KazMunaiGaz company are interested in acquiring shares in the Burgas-Alexandroupolis oil pipeline for many years,” explained to Klassa daily Plamen Rusev, former Director of the Bulgarian branch of Trans-Balkan Pipeline. The reason is that they are the owners of the oil, which will be transported via the pipeline. Chevron is interested in the project, as the company holds a 15% stake in the Caspian Pipeline Consortium (CPC). The KazMunaiGaz company owns another 20% in it. The capacity of the CPC had to be extended and additional quantities of oil from it to be transported via the Burgas-Alexandroupolis pipeline. "Currently, there is no need for additional quantities of oil in Europe, which slows down the expansion of the CPC. Therefore the construction of the pipeline to Greece may be temporarily suspended,” Rusev said. He added that the best solution for Bulgaria was to sell its share in the project. "By doing so, the State will not lose from the implementation of the project, but will receive the fees for land use and for oil transportation,” Rusev said. “Bulgaria's refusal to participate in the Bourgas-Alexandroupolis project is an internal political decision related to Minister of Finance Simeon Djankov,” Rusev explained for BNR. The transcript of the Government’s meeting reveals that the Ministry of Finance has given up the project because of the conditions of the proposed bank loan needed for its realisation. According to the financial consultant, Societe Generale, the only way for the loan to be granted is the credit to be paid by revenues from the oil pipeline. “The Russian consortium, however, did not agree because this would mean the pipe to work with high tariffs, making it uncompetitive,” Djankov explained. According to him, the credit can be borrowed, if the pipeline is controlled by the Russian Transneft Company. Transneft, together with two Russian companies, held a 51% stake in the project company. “In such a case, Transneft will be both a lender and provider of oil and will have full control over the project. The company proposes to implement the project, but under conditions different from the already agreed,” Djankov explained. According to Rusev, however, the company has offered to finance the pipeline at twice lower interest rates and over twice longer period and the Greek side has accepted this principle. According to the expert, the approval of the Environmental Impact Assessment of the pipeline has been delayed due to bureaucratic reasons. No comments to this article. Add the first one.
Source: Class (12.12.2011)

Gas near Deventsi Is Better than Russian The natural gas discovered near the village of Deventsi, northern Bulgaria seems to be of better quality than the Russian gas, according to the first samples taken from the field, much to the pleasure of US petroleum experts. Not far away from the village a probe was taken from about 6km depth, some four years ago. At the layer of the 4740th metre the US experts discovered dry, high caloric gas rich in condensate without water or hydrogen sulphide alloys and under great pressure. On Saturday Bulgaria’s Minister of Economy, Traycho Traykov predicted that the gas deposits near Deventsi discovered by the US Company Transatlantic Petroleum would lower the gas price by about 30%. By now the field in Deventsi is believed to hold about three billion cubic metres of gas but these quantities may very well be twice bigger. If environment experts complete checks by the end of the year and prove the deposit exploitation would not endanger the nature, the Direct Company will receive concession for industrial exploitation and the gas from the deposit near Deventsi could begin being extracted in the middle of 2013.
Source: Standart (12.12.2011)

SEWRC: Natural gas prices to increase by up to 5% “There is no reason for gas prices to be increased by nearly 18%, as requested by Bulgargaz,” said Chairman of the State Energy and Water Regulatory Commission (SEWRC) Angel Semerdjiev yesterday. The expected price increase of natural gas remains in the range of 5%. This means that a change in the price of heating energy is not likely to take place as of 2012. Semerdjiev admitted that Bulgargaz has to receive income for the fourth quarter but did not specify the amount due. SEWRC intends to reduce the trade surplus charges of the company and to increase the extraction of gas from the underground natural gas storage facility Chiren UGS in order to offset the price increase. Semerdjiev explained that the fuel extracted by Melrose Resources JSC in the Black Sea and purchased by Bulgargaz has become more expensive but that the price increase is insignificant. He added that local gas production is 30-40% cheaper than imported Russian fuel. The gas from the Deventsy gas field, near the town of Pleven, is also expected to be cheaper as of next summer. Meanwhile, Deputy Minister of Economy, Energy and Tourism, Delian Dobrev, stated that drilling sites for shale gas are likely to appear in the country after 4 years at the earliest. The sale of state-owned shares in the EVN Bulgaria Electricity Distribution and EVN Bulgaria Electricity Supply companies will be initiated on December 21, announced yesterday officials from the Agency for Privatization and Post Privatization Control. It comes down to the 33% state-owned stake, comprising 51,612 shares in the distribution company and 62,106 shares in the supply company. Experts from the Bulgarian Stock Exchange announced that the minimum price per share of EVN Electricity Distribution stood at BGN 1373,92 and the shares of EVN Electricity Supply will be sold for BGN 120,31 each. This means that the State expects to receive at least BGN 78.5 mln from the transaction. The estimated value of EVN Bulgaria Electricity Supply is lower because the company owns fewer assets and has reported poor financial results.
Source: Class (14.12.2011)

Overcharged Banks Complain of Sofiiska Voda Water utility Sofiyska Voda has been overcharging bank offices by BGN 0.20 per cubic meter, the water treatment tariff for industrial enterprises, said Milena Milanova, member of the State Commission for Energy and Water Regulation (DKEVR) on Tuesday. In her words, the violations were revealed during a random check and the utility company was issued a statement of offence worth BGN 200 000. The DKEVR member cautioned that the inspection would continue and the utility could face further penalties. She specified that Sofiyska Voda had been imposed the minimum penalty, while the maximum fine amounted to BGN 500 000. Milanova advised consumers to take a closer look at the water treatment fees on their bills and to report irregularities and claim their money back.
Source: Standart (14.12.2011)

Bulgaria to receive natural gas from Cyprus, but only after the construction of a gas terminal in Greece Bulgaria will be able to receive liquefied natural gas from deposits in Cyprus, but only after the construction of a gas terminal on the Greek coast. The news was released after the meeting of Minister of Economy, Energy and Tourism, Traicho Traikov, and Minister of Foreign Affairs of the Republic of Cyprus Dr Erato - Kozakou Marcoullis, who was on an official visit to Sofia. They discussed options for cooperation in the energy field. Minister Traikov presented the development of the project for the construction of a gas connection between the towns of Stara Zagora and Komotini. His Cypriot counterpart provided details on the study of an American company on the potential for production of natural gas in the shelf of the Mediterranean Sea. According to preliminary data, there are about 9 trillion cu m of natural gas in the sea around Cyprus. “If these results are confirmed, Cyprus will be able to export natural gas,” announced Minister Kozakou Marcoullis. This will provide an opportunity for the diversification of supply in the South Gas Corridor. Sources of gas will not be found in Asia alone, but in the new European deposits as well. Meanwhile, experts and environmentalists held a heated debate yesterday about the benefits and dangers in the extraction of shale gas in the country. "Bulgaria must investigate what kind of deposits of shale gas it has, but if it comes down to extraction, this will boost the entire economy and will make Bulgaria energy independent," said Dimitar Ivanov, Chairman of the Centre for Study of the Balkans and the Black Sea Region. According to him, it is a criminal act not to explore the potential of Bulgaria for production of shale gas, while paying a high price for imported natural gas because of the monopoly position of Gazprom in terms of the gas supply to our country. "Energy independence cannot be based on finite resources and soil pollution,” argued Borislav Sandov from the Greens party. According to him, the diversification must be achieved by using connections for liquefied gas with neighbouring countries and the development of renewable energy sources.
Source: Class (16.12.2011)

Natural gas prices may rise by 4.5% as of 2012 The State Energy and Water Regulatory Commission (SEWRC) has proposed a 4.53% increase in natural gas prices as of 2012. According to the report of the regulator, gas prices will be hiked by BGN 26.92 per 1,000 cu m and gas will cost BGN 621.29/1,000 cu m, VAT excluded. “The decision of SEWRC’s expert panel is not final,” explained Angel Semerdjiev, Chairman of the Commission. SEWRC has demanded additional documents from Bulgargaz in order to determine the price hike of the fuel. At the beginning of December, the state-run company insisted on a price increase of almost 18%. “Bulgargaz’ receivables from non-disbursed proceeds for 2011 exceed BGN 100 mln and the company will be compensated,” added Semerdjiev. SEWRC is also expected to reduce the company’s trade surplus to about 1%. The Commission explained they had not yet received a document requesting an increase of the gas supply from Melrose Resources, which extracts fuel near Kavarna. It is not evident from the report what portion of the price increase is a result of the contracts signed between Bulgargaz and Gazprom. “Even if a correction becomes necessary, the price increase will not exceed 5%,” stated Semerdjiev. According to SEWRC, central heating prices in the country will not rise as of January. Semerdjiev said that heating utilities will not change their prices in the middle of winter despite the planned price increase of natural gas. The companies will have to compensate for the more expensive gas by resorting to their profits.
Source: Class (21.12.2011)

Private Investor to Take 49% from Maritsa-iztok 2 TPP A private investor may take up to 49% from the biggest thermal power plant in Bulgaria - Maritsa-iztok 2, Bulgaria's minister of economy, energy and tourism, Traycho Traykov, stated. In 2012, different in size minority shares from the state-owned energy companies may be privatized. A privatization strategy is being presently worked out. Bearing in mind the plans for the construction of new capacities in Bulgaria's biggest TPP - Maritsa-iztok 2, the state-owned shares may be reduced to 51% as there is an idea that the rest 49% be given to a private investor. "Only Kozloduy NPP will stay 100% state-owned," Minister Traykov is explicit. "The rest of the big state-run energy companies like the National Electric Company, Bulgargaz, Electricity System Operator may sell up to 34% of their shares but Bulgaria's state should keep its control on them," Traycho Traykov added.
Source: Standart (23.12.2011)

Russia might withdraw from the construction of the South Stream gas pipeline Russia might withdraw from the implementation of the project for the South Stream gas pipeline if the outcome of the negotiations with the Ukraine prove to be disadvantageous to Moscow, stated on Monday the Head of Russian Gazprom, Alexey Miller, quoted by Russian news agencies. If Russia gains control over the Ukraine's gas transmission system, the South Stream gas pipeline will simply become unnecessary, commented gazeta.ru. The implementation of the South Stream project depends on the outcome of the negotiations with Kiev since the project terms and conditions "have always been bound" with this country, acknowledged Miller to Interfax. According to him, the pipeline was designed as an alternative to the Ukrainian tube which transmits two-thirds of the gas exported to Europe by Gazprom. Ukrainian officials confirmed for the website that Kiev is ready to sell the Ukranian gas pipelines to Moscow and argued that the preservation of these assets is not the grand project for the Ukraine. According to the e-edition, this is the first time when Russia has admitted that it might withdraw from the South Stream project if it improves its economic relations with the Ukraine. A month ago, Gazprom decided to change its initial plans for the construction of the gas tube, after it gave up its intention to build a gas pipeline connecting Greece and Italy. Instead, Gazprom representatives announced that they will construct another conduit, which will not end in Austria, but rather fork t owards Northern Italy. At the moment, the pipeline's construction, which is expected to cost around ˆ15 bn, includes Bulgaria, Serbia, Greece, Hungary, Austria, Slovenia and Italy. The construction project intends for the pipeline to be laid underwater in the Black Sea and the end point should be the Bulgarian sea coast in the area of Varna.
Source: Class (28.12.2011)

Deferred payment on fuel negotiated between Bulgargaz and Moscow “Bulgaria was granted a concession by Russian company Gazprom for the payment of natural gas supplied to the country,” announced Alexander Petrov, Director of a Department at Bulgargaz. According to him, after negotiations between Gazprom and Bulgargaz, new terms for effecting payments to suppliers were agreed. However, Bulgargaz representatives declined to give further details. Until now, Bulgargaz paid for natural gas in advance every month and received payment for fuel consumed no later than 40 days of delivery. Bulgargaz expects to end 2011 with an accounting loss of BGN 76 mln. The company has also delayed some of its payments on loans to persons other than those supplying natural gas to the country. Petrov explained that these credits amount to BGN 130 mln and these are being repaid in parts. “The State Energy and Water Regulatory Commission (SEWRC) has not recognised expenses of BGN 150 mln which Bulgargaz will incur for the extraction of natural gas by the end of March 2012,” explained Petrov. SEWRC’s Chairman Angel Semerdjiev said that these costs will be deducted after the company incurs the above. The company explained that it has supplied less fuel to the gas storage facility near Chiren in order to minimise the price increase forecast. Semerdjiev added that he is not worried about the financial situation of Bulgargaz, at present, and the company might post a profit.
Source: Class (28.12.2011)