The Bulgarian government has started talks with Russian state-owned energy giant Gazprom for a reduction of prices stipulated in the existing gas supply contracts, according to Traicho Traikov, Minister of Economy, Energy and Tourism.

Speaking after a Wednesday meeting with Alexei Miller, Chairman of the Board of Directors of Gazprom, Traikov explained that Bulgaria's current gas supply contracts expire in end-2012.

He told journalists that Miller had vowed to honor the request of the Cabinet for a decision on the matter within two months.

The next gas supply contracts would be signed between Russia's Gazprom Export and Bulgaria's state-owned Bulgargaz without any intermediaries, Traikov specified.

He reminded that Wednesday's meeting had provided a confirmation on the part of the Russian company of the agreement sealed in the summer of 2010 for the removal of intermediaries from the supply chain.

Bulgaria's Energy Minister revealed that Bulgaria was also trying to negotiate prices which are partially tied to spot prices of natural gas.

"Generally speaking, this means weakening the link between gas and oil prices," Traikov noted, adding that the trend was already observable all over the EU and Member States were stepping up calls for severing the connection between oil and gas prices.

He concluded by saying that the government and Gazprom planned to wrap up preliminary activities on the South Stream gas pipeline by November, so that Bulgaria could make a final investment decision on the Bulgarian section of the conduit.

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