Bulgarian EconMin Too Assuages Natural Gas Shortage Fears

Business » ENERGY | September 25, 2012, Tuesday // 19:32
Bulgaria: Bulgarian EconMin Too Assuages Natural Gas Shortage Fears Bulgarian Economy Minister Delyan Dobrev snubbed reports of a looming natural gas shortage for Bulgaria. Photo by BGNES

After the head of Bulgarian state firm Bulgargaz, Economy Minister Delyan Dobrev has also sought to assuage the fears that the nation might end up with a natural gas shortage in early 2013.

Speaking to reporters in Ruse Tuesday night, Dobrev refuted reports that since Bulgargaz is seeking to utilize Bulgaria's natural gas reserves at the Chiren facility, a shortage will be looming in early 2013.

"Of course, we will have gas, there is no risk, unless, of course there is some large-scale failure of the pipelines, or another gas dispute between Ukraine and Russia as in 2009," Dobrev declared.

He noted that Bulgaria and Russia at present have a contract for gas supplies from Gazprom expiring on December 31, 2012, and that they are going to make a new contract immediately after that.

In his words, Bulgaria and Russia have almost wrapped up the negotiations for that.

"With respect to the Chiren storage facility – we are using its reserves every year. It is filled up during the summer, and depleted over the winter, this is a standard procedure. But there is no word of a gas shortage, this is absurd," Dobrev added.

According to an earlier report, in order to take full advantage of the 11% discount in natural gas prices that Russia's Gazprom provided to the Bulgarian government for the period until the end of 2012, Bulgargaz will be ordering less natural gas from other suppliers or intermediaries demanding a higher price, and will be using a greater amount of gas from Bulgaria's only storage facility than it usually does.

The Chiren storage facility at present has about 380 million cubic meters of natural gas; by the end of 2012, Bulgargaz plans to draw 210 million cubic meters, or 55% of the total amount, from there; thus, in January, Bulgaria will end up with a shortage in its gas reserves.

According DKEVR head Angel Semerdzhiev, the depletion of the Bulgarian natural gas reserve will not be a problem once the government signs its new supply contract with Russia's Gazprom.

Semerdzhiev has pointed out that Bulgargaz has run a loss of BGN 250 M because it has been selling natural gas to Bulgarian consumers cheaper than it has been buying it from Russia.

"We all hope that at the beginning of 2013 Bulgargaz will have such prices for Bulgarian consumers that it will be able to cover much of the loss," he said.

In his words, the depletion of the Chiren facility is part of Bulgargaz's policy because it will be able to use cheaper gas; at the same time, he expects that the new supply contracts with Gazprom will offer Bulgaria even cheaper gas.

Semerdzhiev said Bulgaria's heating utilities could use alternative fuels so even in the event of a natural gas shortage there would not be a problem with the heating in the winter.

During its meeting on Wednesday, DKEVR is expected to approve a 0.67% reduction in the price of natural gas in Bulgaria as of October 1, 2012.

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Tags: natural gas, gas supplies, storage facility, Chiren, DKEVR, State Commission for Energy and Water Regulation, Angel Semerdzhiev, Russia, Gazprom, Bulgargaz, Delyan Dobrev, Economy Minister, Dimitar Gogov
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