Daily Management Review

Bulgaria Signed an Agreement to Build a Gas Pipeline with Romania and Greece


Bulgaria signed an agreement with Romania and Greece on the construction of the connection between the national gas transmission system, known as vertical gas corridor. It is reported by Wall Street Journal, quoting Deputy Minister of Energy of Bulgaria Zhecho Stankov.

Bulgaria Signed an Agreement to Build a Gas Pipeline with Romania and Greece
The new connection will cost about 220 million euros ($ 236.2 million). Commissioning is scheduled for 2018, said the official. Through this tube Bulgaria will buy gas from Azerbaijan and LNG terminals in Greece.

"We finally got a new source of gas, because until now we were completely dependent on a single source - Russia," - said Stankov.

Bulgaria consumes about 3 billion cubic meters of gas per year, 95% of which come from the Russian "Gazprom".

Bulgaria is also working to increase its own gas production: last week launched a tender for the development of deepwater oil and gas sites on the Black Sea coast. In February, the Government of Bulgaria reported that negotiations on the exploration of these blocks are underway with Royal Dutch Shell Plc, BP Plc, Statoil ASA and several other foreign companies.

As previously reported, Bulgaria under unprecedented pressure of the West and particularly the United States, refused to build a very profitable gas pipeline "South Stream". This pipeline was to be built under the Black Sea and deliver gas from Russia to the Balkans and Southern Europe.
The purpose of this construction was to bypass the Ukrainian gas transportation system, which has always used its geography to political and economic blackmail Russia and Europe. However, the project "South Stream" was blocked at the level of the European Commission. As a result, Bulgaria was left with nothing, and now looking for any opportunity to make up its energy deficit.

Also today, the European Commission (EC) has sent to the Russian company Gazprom official list of claims within the European antitrust investigation, launched in 2012.

EC accused Gazprom in the abuse of a dominant position in the gas market. Also, the Commission considers not to conform to the EU system of pricing applied by the company.
According to her, Gazprom is abusing its monopoly position in eight EU countries. "This is Estonia, Hungary, Bulgaria, Czech Republic, Latvia, Lithuania, Poland and Slovakia. The company has used its dominant position in the market to put pressure on EU countries as part of a gas infrastructure in Poland (Yamal) and Bulgaria (South Stream) / "- explained the Commissioner.

However, according to Vestager, Gazprom has set in five EU countries significantly higher gas prices, which are sometimes 40% higher than prices for other states of the European common market.

- We see that Gazprom puts too high a price in 5 countries: Estonia, Latvia, Lithuania, Poland and Bulgaria. In these contracts, gas prices are tied to oil prices," - added Vestager.

Back in 2012, Gazprom also pointed out that "a number of relatively weak economies of the European Union continue to demand unilateral price cuts, and such statements should not be treated differently, as supported by the European Commission subsidies cheap gas in Eastern Europe at the expense of Gazprom. This is an attempt to solve economic problems in the European Union, in particular the new members, Eastern Europe, Russia's expense.

Gazprom have 12 weeks to respond to the official list submitted to it by the European Commission claims.
- Now the company has 12 weeks to respond to the statement, and request an oral hearing to present their arguments, - said the Commissioner. - EC fully respect the rights of Gazprom to protect and carefully consider the comments before making a decision. The direction of the application does not prejudge the final outcome of the investigation.

source: wsj.com