Economic ministry will decide what stake of BEH to list on the stock exchange Within a week or two, the economy ministry must decide minority stakes in state-owned energy companies that will be sold on the exchange, said in an interview with newspaper "24 Chasa" Deputy Prime Minister Simeon Djankov. He indicated two options - for a package of Bulgarian Energy Holding shares or shares of "Bulgartransgaz" and Electricity System Operator. Before Christmas, Economy Minister Traicho Traikov explained that it is considered the option of placing 15% of the energy holding the stock exchange. Government's intentions are to retain up to 66% of large energy companies. Intentions are the sale of packages to be implemented by the end of 2012. I think the more attractive it will be BEH, because there is diversification. BEH will arise interest of German and Austrian pension funds," Djankov said. The government will intervene aggressively in the pricing of goods and services to protect consumers. Deputy Prime Minister acknowledged that the financial and economic ministry have few rights, but certain products have higher prices without clear reasons. He did not specify whether the prices of electricity, heating and water, which are fixed by the formal independent State Energy and Water Regulatory Commission, will be subject to interference.
Source: 3e-news (05.01.2012)

Bulgaria Asks Russia for Cheaper Natural Gas Bulgarian PM Boyko Borissov, Economy Minister Traycho Traykov and Bulgargaz CEO Dimitar Gogov had talks with Gazprom CEO Alexey Miller, at which they insisted on Russia's gas giant lowering the wholesale prices of the natural gas supplied to Bulgaria. The Bulgarian statesmen asked for a ten-percent discount, which has already been granted to Germany, Slovakia, France and Turkey. The discount, if granted, is to come into force immediately as amendment to the agreements that expire at the end of the year, and this clause will also be provided in the future direct contract between Bulgargaz and Gazprom Export, which is to be signed by December 2012. "In a month or two it will become clear how much the wholesale price of the natural gas supplied to Bulgaria can be lowered," Mr. Traykov said after the meeting. However, during the talks Miller emphasized that Gazprom would expect something in exchange for the lowered price of natural gas. Alexey Miller did not deny that such a possibility exists but this should be tied to certain engagements on behalf of Bulgaria. For example, this could be the acceleration of the construction and making the final investment decision on South Stream gas pipeline which will ensure Gazprom the exclusion of Ukraine from the route of the natural gas from Russia to southern and central Europe and at the same time opens the opportunity for bigger amounts of deliveries for these countries. Another option for the reduction of the price of natural gas for Bulgaria is that this country allows Gazprom make investments in Bulgarian economy and step on the local gas market, energy experts state. Gazprom has received similar "bonuses" from Germany where the price of natural gas for the households is cheaper than the one in Bulgaria.
Source: Standart (01.03.2012)

A debt of BGN 7.2 bn accumulated by state-run companies State-run companies have accumulated a total of BGN 7.2 bn in debt, which is a jeopardy to the stability of the Bulgarian economy, Georgi Angelov, senior economist at the Open Society Institute, pointed out at a discussion called ‘The Economic Situation 2012’. According to him, the liabilities of state-owned firms are a serious obstacle to the development of the country’s economy because most of them hold a dominant position on the domestic market and if these fall into insolvency, the State has to repay debts. Presently, however, the Government has no free resources to operate in such a situation, explained the economist. The National Electric Company (NEK) is the top debtor with aggregate liabilities of BGN 2.17 bn, followed by the National State Railways (BDZ) and the Kozloduy NPP, whose debts amount to BGN 767 mln and BGN 750 mln, respectively. Thus, the liabilities of these three state-run companies alone exceed BGN 3.68 bn. Debts over BGN 0.5 bn have also been accrued by Maritsa Iztok Mines – 2 (BGN 648 mln) and the Sofia Central Heating Utility (BGN 548 mln). The other big debtors with liabilities exceeding BGN 100 mln are: Sofia Airport (BGN 150 mln), Bulgartransgaz (BGN 107 mln), the Sofia Public Transport Company (BGN 164 mln), Port Infrastructure (BGN 175 mln), Maritsa Iztok Mines (BGN 209 mln) Railway Infrastructure (BGN 213 mln) and Bulgargaz (BGN 341 mln). According to Angelov, some financial institutions, such as Municipal Bank PLC and the Bulgarian Development Bank, also have sizable liabilities. However, the structure of banks’ receivables is different and the liabilities of these two financial institutions, amounting to BGN 2.15 bn, are actually reported as attracted funds, specified the economist. According to him, a public register is needed for monitoring these debts. Angelov pointed out that according to data from the end of January 2012, Bulgaria’s aggregate public debt stood at BGN 11.68 bn, out of which BGN 4.92 bn was internal debt. Economists warned that over the next eight or nine months, Bulgaria should repay a total of BGN 3 bn in debt settlement for bonds and deficit. According to Lachezar Bogdanov, Managing Partner at Industry Watch, the Cabinet has to introduce a balanced budget. “Had that happened a year ago, we would not be wondering now how to find BGN 1.6 bn for paying the bonds maturing in January 2013. Bulgaria’s revenues from privatisation are low, its reserves have decreased and it is not clear who will lend us this money,” Bogdanov stated. Dimitar Chobanov, economist and professor at the University of National and World Economy, said that the Government could not raise these funds on the domestic market. A few days ago, the Finance Ministry issued government securities worth BGN 50 mln, but bonds worth only BGN 42 mln were purchased because investors seek higher returns, which the Bulgarian bonds cannot yield. According to Chobanov, seeking financial assistance from the IMF is a realistic option, despite the negative effects which such funding could have. Georgi Angelov also commented on the issue of resorting to the money from the so-called Silver Fund. The decrease of the fiscal reserves from BGN 12 bn in 2008 to BGN 4.5 bn in 2012 is among the main economic problems in Bulgaria. He expressed concern that if money for future payment of pensions was set aside, the fiscal reserve would decrease from BGN 4.5 bn to some BGN 2.5 bn. However, this money cannot be used because of Bulgaria’s commitments to the European Union. Thus, Bulgaria will practically remain without any reserves, the economist pointed out, specifying that such steps would position our country at the bottom in the European Union in terms of amount of reserves.
Source: Class (09.04.2012)

A concession contract for extraction of natural gas from the deposit near Deventsi village, Pleven, developed by the American company Direct Petroleum may be signed within a month. The company has already aquired a positive assessment of environmental impact assessment (EIA), a mandatory step before the signing of the concession contract. The company is to negotiate terms of the contract with the eco ministry. After that, three or four months are necessary for drilling with which first volumes of natural gas will be extracted. The total number of extraction wells that will be made in the deposit is 15-16. In a Direct Petroleum’s preliminary assessment of field in Deventsi about 1 billion cubic meters of gas annually can be obtained, which can cover about half of home consumption.
Source: Capital (14.06.2012)

Turkish Intermediaries to Supply Azeri Natural Gas to Bulgaria Private companies from turkey will probably become intermediaries in the supplies of natural gas from Azerbaijan to Bulgaria. This became clear from a statement of Turkish Energy and Natural Resources Minister, Taner Yildiz, as quoted by local and Azeri news agencies. Mr. Yildiz met with his Bulgarian counterpart Delyan Dobrev in Ankara Wednesday and discussed the ongoing construction of an interconnection between the natural gas networks of Bulgaria and Turkey. The interconnection will supply Azeri natural gas to Bulgaria. As the Standart wrote earlier, Sofia and Baku agreed supplies of at least one billion cubic meters of natural gas per year. Earlier it was considered that the gas interconnection will be constructed and exploited by Bulgartransgaz and Turkey's BOTAS Petroleum Pipeline Corporation. However, at a press conference following his talk with Minister Dobrev Yilfiz said that any private Turkish company may become an intermediary in the supplies of Azeri natural gas to Bulgaria, provided it has obtained the necessary license for such activities from the state regulator in Ankara. With this move Taner Yildiz has turned the tables, as now Turkey, who until not before long was regarded as a mere transit country on the natural gas route from Azerbaijan to Bulgaria, has now secured ten billion cubic meters of natural gas per year from Azerbaijan's Shah Deniz-2 gas field. Thus, Ankara is now planning to become an authorized reseller of Azeri natural gas for Bulgaria.
Source: Standart (03.08.2012)

More players enter the transit of gas Monopoly of Russian suppliers of gas through transit pipes in Bulgaria will fall. This is provided in a project for a contract between the transmission network operator Bulgartransgaz and potential buyers of spare capacities. The type document has been put for public consultation and suggestions are accepted until 25 August. Bulgartransgaz allocate capacity for transit of gas through the "first said - the first received" principle. Preference will be given to the state-owned Bulgargaz. Currently the majority of capacity is held by the Russian-Bulgarian company Overgas (50% owned by Gazprom). Many industrial companies complained in Brussels and last year the European Commission started an infringement procedure against Bulgaria. Capacities will be given for month, quarter, one year or more. The condition is to have equal amounts of free entry and exit of the network. Only they can be transferred. If the document is approved before the end of the year, traders besides Overgas in practice can only benefit 9 million cubic meters of spare capacity. The reason is the mismatch between the physical volumes of the inlet pipe from Romania and the three exit pipes to Turkey, Greece and Macedonia, and in the reserved amounts of the subsidiary company Gazprom for this year.
Source: Trud (14.08.2012)

"This week was the ground-breaking of the Bulgaria-Romania Gas Interconnection, a priority project for us at the moment. Unlike Bulgaria, whose sole source of natural gas till now has been Russia, our neighbor's transmission system is also connected with Hungary's network," Kiril Temelkov, Chief Executive of Bulgartransgas, told BNR. "The pipeline will give our system access to new energy sources. The project is scheduled to be completed and ready for operation by May 2013, with the section of the pipeline running above the ground possibly ready ahead of schedule. Construction works on all parts of the pipeline on the territory of Bulgaria and Romania are being carried out simultaneously which calls for coordination between Bulgartransgas and its Romanian partner in the project. This approach will allow the interconnection to start operation in May 2013," Temelkov explained. The Government's policy is aimed at integrating the natural gas transmission systems of Bulgaria and its neighbors. Temelkov said he had no concerns about the gas transmission network during the winter. "If there are disruptions anywhere in Europe, Bulgaria, as part of the European network, may find itself in a more difficult situation. Since the crisis in the beginning of 2009 the relationships in the sector have become more complicated but there hasn't been another case of decreased or completely cut gas supply to our clients," Temelkov elucidated.
Source: Class (20.08.2012)

Turkish company Setgaz will indeed build a connection between the gas networks of Turkey and Bulgaria, but it will be separate from the one to be constructed by Bulgartransgaz, stated the latter company. Thus Wednesday Bulgargransgaz confirmed reports that the Bulgarian cabinet has already concluded an agreement with Setgaz Dogalgaz for the construction of a gas pipe from the Turkish network on to Stara Zagora in Bulgaria. "We know of Setgaz's intentions to build the pipeline. We have expressed our desire for the connection to be operated by Bulgartransgaz once being constructed," stated the Bulgarian company. Bulgartransgas further said it supports all investments that could contribute to increasing Bulgaria's security and independence in terms of natural gas deliveries. The company however adds that Setgaz's project has a different concept and route from its own. Bulgartransgaz has nevertheless explained that the second connection will in no way affect its own project. Bulgaria hopes to have its connection to Turkey's gas system ready before the end of 2014. The country has embarked on building system links to neighboring Turkey, Greece and Romania to decrease energy dependence on Russia, which currently supplies it with some 90% of its natural gas demand.
Source: money.bg (13.09.2012)

Bulgarian Energy Holding (BEH) announced a competition for rating agency. The mega company involves the largest state-owned energy companies - NPP Kozloduy, NEK, TPP Maritza East 2, Mines Maritsa Iztok, Bulgargaz, Bulgartransgaz and Bulgartel. The money from the issue will be used to help the two troubled companies - NEK and Bulgargaz. The announced competition for rating agency is divided into two stages - credit rating and its transformation into issue. The first phase should be completed at most for two months, and the second – for a month and a half. The competition can be entered only by agencies, which over the past three years have performed at least 3 successful agreements on rating energy companies with a turnover of at least EUR 1 billion. Furthermore, their previous guarantors must have successfully issued bonds for a minimum of EUR 250 million.
Source: Trud (17.09.2012)

Bulgartransgaz to invest ˆ650 mln in gas transmission infrastructure Bulgartransgaz plans to invest nearly ˆ650 mln in the development of gas transmission infrastructure over the next 10 years, 3E-news.com posted, citing CEO Kiril Temelkov who presented to journalists the ten-year investment plan of the company at the Golden Sands Black Sea resort. “The large-scale investment is aimed at ensuring reliable and secure infrastructure for gas flows into and through Bulgaria and diversification of the sources and routes of gas supply,” specified Temelkov. He added that the investment will be ensured by own funds of Bulgartransgaz, grants schemes and attracted external financing on a project basis. The interconnector links with Greece, Turkey, Serbia and Romania with a total capacity of 8-15 billion cu m and a total length of 300 km will absorb ˆ117 mln. Some 272 km of new routes will be built that will make the access to gas available to regions. Their total capacity will be approximately 2.5 billion cu m of gas and these will cost ˆ49 mln. The expansion of the transmission network will cost ˆ250 mln and, within five years, the capacity of the gas depository in Chiren will be doubled from the current 550 million cu m to 1 billion cu m of storage and up to 10 million cu m for injection and extraction. According to Temelkov, this will cost the company some ˆ200 mln. The capacity of Chiren is not being completely used at present and cannot be used without an extension of the depository. Gas from Chiren is now offered on the Bulgarian market but, after the expansion, it will be marketed in the entire region.
Source: Class (01.10.2012)

The South Stream gas pipeline enters our territory at Provadia The South Stream project, which will carry gas from Russia to Austria, will be the second entry point in Bulgaria's transit system. It is expected to be located in the region of Provadia. This was announced on Sunday by Kiril Temelkov, CEO of Bulgartransgaz. According to him, this is the closest point at which the new system will approach the existing pipe carrying transit "blue fuel" from Russia to the rest of the Balkan countries. On November 9 this year, it will be decided on the start of the infrastructure 's construction. It is expected that this will result in a new entry point on Bulgarian territory. It is also expected to be ready around 2015, Temelkov made it clear. Changes in the contract for transit transfer of gas from Russia to the rest of the Balkan countries may also be made then. According to Bulgartransgaz's CEO, these changes will be defined by the market. He reassured that whatever happens, it will not lead to a situation in which gas pipes, located on Bulgarian territory, will remain unused. It also became clear that Russia wants to buy gas from Bulgaria. Interest is shown in relation to Bulgaria's plans to expand its gas transmission system and to build intersystem connections with Turkey, Greece and Romania, as well as with the construction of the Nabucco West pipeline. It will carry gas from Azerbaijan to Central Europe.
Source: Class (02.10.2012)

The revenues of the Bulgarian Energy Holding (BEH) JSC for the first nine months of 2012 were double the amount for the same period of last year, showed the published financial report of the Finance Ministry. The gross profit for January-September is almost equal to the revenues, totaling BGN 560.86 mln, while last year’s profit before taxes was BGN 235.1 mln. The gross profit of Bulgartransgaz for the period amounted to BGN 94 mln, up from BGN 83 mln last year. The Kozloduy NPP concluded the first nine months of 2012 with a pre-tax profit of BGN 142.6 mln, compared to BGN 178.2 mln for the same period of last year. The company’s revenues amounted to BGN 655.1 mln, registering a slight decrease of 2.4%, compared to the same period of 2011. Proceeds from electricity accounted for the largest share (95%) in the structure of revenues from the overall operation of the plant. These decreased by BGN 25.75 mln (4.03%), mainly due to the 3% drop in the electricity sold during the period, compared to 2011. The costs incurred for the activities of Kozloduy NPP amounted to BGN 515.4 mln. For the first nine months of 2012, another company of BEH – the National Electric Company (NEK) accumulated a loss of BGN 77.2 mln, compared to a profit of almost the same amount for January-September 2011. This is due to the low selling wholesale prices of electricity on the regulated market, as the company has already warned. However, after the hike of electricity prices as of July 1, 2012, NEK posted a profit for Q3 of the year, as per preliminary data.
Source: Trud (05.11.2012)

Duel for BGN 120 million Two companies are fighting for one of the largest orders in both the state and the gas sector in recent years. It's worth BGN 120 million, with which Bulgartransgaz will modernize six compressor stations - four of transit and two of the national systems. The order is interesting not only for its huge size - it can be uplift for the coming construction of the South Stream – the winner company will easily prove experience in implementing large projects alike. There is another key feature - the procedure is shrouded in silence. Unlike large orders and other highway projects funded by EU programs, the information for the one of Bulgartransgaz is scarce. Journalists were allowed only to the original offer submition. From then on, there is no public disclosure that five of the seven candidates are eliminated or which persist, or when the bids are submitted, although it may not be required by law. A way of direct negotiation has been chosen, instead of competition with transparent prices and methodology, which adds flavor to suspicion. Although the initial documents were filed by seven candidates, only Glavbolgarstroy and consortium Advance - Vodstroj Engineering between Advance Engineering, related to Cyril Domuschiev, Vodstroj 98 and Enemona were allowed to participate.
Source: Capital (07.11.2012)

Bulgaria Joins the Club of Big Gas Players Bulgaria now ranks among the big gas players. This has become possible after the country took its final investment decision on the construction of the Bulgarian sector of the South Stream pipeline. The document was officially inked in the Granite Hall of the Council of Ministers by CEO of the Bulgarian energy holding Mihail Andonov and Chair of the Gazprom Directors’ Board Alexey Miller. “This decision makes Bulgaria one the biggest transitors of natural gas in Europe; 63 billion cub.m/y of gas that will flow via Bulgaria to the West will make Bulgaria one the biggest gas players on the Old Continent, Miller said after putting his signature under the document. He added that now a gas supply crisis, similar to the one occurred in 2009, are ruled out in Bulgaria. “The South Stream pipe guarantees that Bulgaria will always be able to divert gas for its needs and the Bulgarians will never remain in the cold,” PM Boiko Borisov commented. The Premier said further that the negotiations were tough, especially when it came to setting the price in the new agreement. The parties started negotiating late Thursday evening right after Moscow’s “heavy artillery” arrived in Sofia. To the Bulgarians’ surprise Miller brought along his deputy Alexander Medvedev. “We have put in great efforts to get rid of the three intermediaries in gas supplies to Bulgaria. We have been wasting millions on them at the expense of the Bulgarian consumer. We have been discussing this particular topic till morning,” Borisov said.
Source: Standart (16.11.2012)

On 1 January 2013 the Bulgarian gas market can witness serious changes. However, they are not caused by the new long-term contract with Gazprom. Or at least it would not be directly responsible for them. Most likely since the beginning of the year Overgas, the subsidiary of the Russian gas giant in Bulgaria, will begin to supply gas, avoiding the former monopoly of Bulgargaz. Until recently this was impossible because the state and its two gas companies impeded in every way the entry of a new player. Last week CEO of Bulgargaz already signaled the change, saying that the company has no obligation to supply to Overgas. "How they will provide gas is not my place to comment," he said. Deputy Executive Director of Overgas Inc. Svetoslav Ivanov confirmed that by the end of the year the company will contract with Bulgartransgaz and since the beginning of 2013 will be able to supply gas to its customers, which until recently was purchased from state monopoly Bulgargaz.
Source: Capital (26.11.2012)

Bulgaria to Renegotiate with Moscow Gas Transit to Greece The Bulgarian government will renegotiate with Moscow the agreement on the transit of Russian gas to Turkey and Greece via the pipeline of Bulgaria's Bulgartransgaz. The reason are the new requirements to gas transit grids set by the EU. According to the new EU rules, all pipes' owners have to declare their vacant capacities and to offer opportunities to all gas traders to transit the corresponding volumes of natural gas. Currently, however, only Russian gas is flowing through the Bulgarian pipes to the country's southern neighbors. If no agreement complying with the EU requirements is reached between Sofia and Moscow by January 1, 2017, Bulgaria will terminate the agreement concluded in 1986, the Council of Ministers reported.
Source: Standart (20.12.2012)

The state-run Bulgarian Energy Holding (BEH) expects to post a profit of some 36 million levs ($24.4 million/18.4 million euro) this year on gross revenue from sales of 6.46 billion levs, the company’s chief executive officer said on Thursday. The company plans a bond of no less than 350 million euro ($465.1 million) in 2013 and expects to be assigned a credit rating by Fitch by the middle of January before proceeding with the issue. It has not been decided how the proceeds will be spent, Mihail Andonov told a press conference in Sofia. BEH (www.bgenh.bg) incorporates assets of Bulgaria's sole nuclear power plant Kozloduy, gas monopoly Bulgargaz, gas transmission system operator Bulgartransgaz, telecommunications operator Bulgartel, NEK and its wholly-owned system operator Electricity System Operator, coal-fired power plant Maritsa East 2 and the Maritsa East coal mines. The company’s assets equal 12.8 billion levs while its capital is 8.84 billion levs. About 22,600 people work for BEH.
Source: Capital (21.12.2012)