Azerbaijan Bulgaria's Real Alternative to Russian Gas - Minister

Business » ENERGY | July 3, 2010, Saturday // 12:22
Bulgaria: Azerbaijan Bulgaria's Real Alternative to Russian Gas - Minister Bulgarian Economy Minister Traikov (front middle) pictured signing a memorandum for cooperation with his Azerbaijani counterpart with the two countries' Presidents in the background in November 2009 in Sofia. Photo by BGNES

Azerbaijan is the “real alternative” natural gas supplier for Bulgaria, which gets almost 100% of its gas from Russia at present, according to Minister of Economy, Energy and Tourism, Traicho Traikov.

“The main question about Azerbaijani natural gas is how to bring it to Bulgaria. This can be done through compressed and liquefied natural gas terminals through the Black Sea. It will not make it more expensive than the Russian gas,” Traikov told Darik Radio Saturday commenting on the matter in the wake of a visit of Bulgarian President Georgi Parvanov to Azerbaijan over the week.

Traikov pointed out that Bulgaria consumes about 4 billion cubic meters of natural gas annually, and expects to start receiving about 1 billion cubic meters of gas from Azerbaijan.

In his words, it is up to the state gas companies of Bulgaria and Azerbaijan to hammer out the technical details about the future exchange. Thus, it is still uncertain if Bulgaria will be able to receive its first Azerbaijani gas supplies in 2011.

“If the upcoming winter is cold, I will be very happy because this will be good for skiing. But Bulgaria won't be left without natural gas, don't worry,” said the Economy Minister while also reiterating his comments from earlier this when that the 25% natural gas price hike in Bulgaria as of July 1 is to be blamed primarily on the contracts with Russian supplier Gazprom renegotiated in 2006 by his Socialist predecessor Rumen Ovcharov.

“We want to operate in a market environment. Thus, when the Russian gas becomes pricier for Bulgaria, it should also be more expensive for Romania and the other way around. There is no other country like Bulgaria relying 100% on Russian natural gas supplies,” said Traikov after he and Prime Minister Borisov had made it clear earlier that the Cabinet was going to seek to renegotiate the terms of trade with Gazprom in order to reduce the prices, and to eliminate the three intermediaries between state company Bulgargaz and the Russian company.

“The gas supply contracts with Gazprom are not 100% secret because there are some people directly operating with them who can see them. However, we cannot publish them on the Internet because the contracts state that this can be done only with the agreement of both sides. The Russians don't want to make them public. We are going to provide for mechanisms to make the Bulgarian more informed about the gas deals,” explained the Minister.

He reminded that on Tuesday, June 6, Russia's Deputy PM Viktor Zubkov, and the Vice CEO of Gazprom Alexander Medvedev will be coming to Russia for energy talks, a visit agreed upon on Friday by Bulgarian PM Boyko Borisov and Russian PM Vladimir Putin in a telephone conversation.

Traikov also said that Bulgargaz should start use hedging in order to insure itself against risks, and that the state gas company will be able to do so from now on because the government had made an agreement on this matter with the State Commission for Energy and Water Regulation (DKEVR).

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Tags: Gazprom, Russia, Russian gas, natural gas, gas supplies, azerbaijan, Traicho Traikov, Economy Minister, LNG, liquefied natural gas, Bulgargaz, Viktor Zubkov, Vladimir Putin

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