Bulgaria Trades Off South Stream Progress for Cheaper Russian Gas

Business » ENERGY | March 31, 2012, Saturday // 00:48| Views: | Comments: 0
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Bulgaria: Bulgaria Trades Off South Stream Progress for Cheaper Russian Gas Bulgarian EconMin Dobrev (left) with PM Borisov. Photo by Sofia Photo Agency

Russia has agreed on an 11% natural gas discount for Bulgaria in exchange for a faster construction of the Bulgarian section of the South Stream gas transit pipeline.

This information has been revealed by Bulgarian Economy and Energy Minister Delyan Dobrev, who spoke together with Bulgarian Prime Minister Boyko Borisov at a news conference shortly before midnight on Friday.

Dobrev had just arrived from a one-day trip to Moscow where he went for high-profile talks with senior Russian officials over the Bulgarian government's decision to terminate the joint project for the construction of the 2000 MW Belene NPP by Russia's Atomstroyexport, and over the negotiations for the prices of Russian gas supplies to Bulgaria.

On Wednesday, the Borisov government decided to give up on the controversial Belene project, terminating the contract with the Russians.

Dobrev admitted that Gazprom's 11% discount in Russian gas prices for Bulgaria is only for a 9-month period – from April 1 till the end of 2012, and that nothing has been negotiated for the Russian gas supplies to Bulgaria after the end of the year.

In exchange, Bulgaria has committed to speeding up the construction of the Russian-sponsored South Stream pipeline since on January 1, 2013, the EU is introducing new requirements for the access to energy networks.

South Stream, where Gazprom is a participant together with Western European companies BASF, Eni, and GDF, will transport Russian gas to Southern and Central Europe via Bulgaria, circumventing Ukraine.

Bulgarian Economy Minister revealed there was much haggling over the gas price discount with Gazprom in Moscow.

At the same time, however, the Bulgarian consumers will not feel any result from the discount since the Bulgarian gas monopoly Bulgargaz already requested a 26% price hike but the state regulator DKEVR approved a hike of only some 13%.

"We will provide faster and shorter terms for the construction of South Stream because the faster we launch and install a meter, the better," Bulgarian PM Borisov said late Friday night, adding that South Stream and its rival Nabucco will turn Bulgaria into a key natural gas distribution hub.

During his talks in Moscow Friday, Bulgaria's Economy Minister has agreed with the Russian state nuclear corporation Rosatom that the first 1000 MW unit produced by its subsidiary Atomstroyexport will be installed in the existing Bulgarian NPP at Kozloduy as a seventh reactor, and that a second 1000 MW reactor can be negotiated as an 8th reactor at Kozloduy.

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Tags: Delyan Dobrev, Russia, Moscow, Gazprom, Atomstroyexport, Rosatom, Belene NPP, Nuclear Power Plant, Kozloduy NPP, natural gas, Russian gas, gas supplies, Boyko Borisov, Economy Minister, Prime Minister, South stream, gas transit pipeline, Nabucco
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