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Gazprom Doesn't Barter with Bulgaria
Bulgaria will enter the European Union on January 1 with guaranteed supplies of Russian gas through 2030. In exchange for a very slow transition to market pricing, Bulgaria agreed to give up a barter plan for settling transit accounts. In the first quarter of next year, Bulgaria will receive natural gas for $91 per 1000 cu. m. Only in 2012 will the price hit $245, that is, 95 percent of the current market price.
Bulgarian Prime Minister Sergey Stanishev signed a package of documents during Gazprom head Alexey Miller's visit to his country. They included documents concerning Russian-Bulgarian gas relations and transit of gas to Turkey, Greece and Macedonia. The contracts on gas delivery and transit that were to expire in 2010 were extended to 2030 and, mostly importantly for Gazprom, Bulgaria will not settle transit accounts on a barter basis. The volume of transit gas is due to increase from 12 billion cu. m. this year to 17.8 billion cu. m. in 2015. This year, Gazprom provided the country with 4 billion cu. m. of gas at $83 per 1000 cu. m. as payment for transit fees. It supplied another 3.1 billion cu. m. at $257 per 1000 cu. m. as well.
Negotiations with Bulgargas were hard going for the last year and a half. At the beginning of the year, Gazprom demanded that Sofia share transport and delivery contracts, as it had done in Ukraine and the Baltic countries. That would allow Gazprom to equalize sales prices and increase its profits. Bulgarian authorities refused to convert barter transit to money and even threatened to go to international arbitration. Their contract foresaw barter until 2010.
The route of the so-called South European Gas Pipeline is still being agreed upon among Serbia, Bulgaria, Romania, Hungary and Austria. All of those countries are hoping to receive several billion additional dollars per year in transit fees. Gazprom agreed yesterday to take Bulgaria's interests into account in that matter and possible build underground reservoirs in that country. Bulgarian Minister of Economic and Energy Rumen Ovcharov said that Bulgaria will derive $785 million in income from gas transit this year, $3 billion in 2102 and $5 billion in 2030.
Sofia also agreed to give its share in the construction of the Bourgas-Alexandroupolis oil pipeline to Russia. Gazprom Neft is involved in that project. In return, Gazprom agreed to invest in Bulgarian electricity. Gazprombank won and tender to construct an atomic power plant in Belen. Now it will buy the plant after its completion.
www.commersant.com
All the Article in Russian as of Dec. 19, 2006
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