Bulgaria Rejects Gazprom Price Hike
Gas to Turkey, Greece, and Macedonia is piped via Bulgaria (epa)
Energy and Economy Minister Rumen Ovcharov said today the offer is "unacceptable." Gazprom officials were not available for comment as today is a public holiday in Russia.
Bulgaria's domestic consumption is almost totally dependent on Russian gas. The country is also a transit route to its neighbors Turkey, Greece, and Macedonia.
Bulgaria now pays one price for direct deliveries -- according to the energy minister, $257 per 1,000 cubic meters -- and gets cheaper gas in exchange for transit.
Bulgarian officials say Gazprom is pushing Bulgaria to switch to a system under which it pays transit fees in cash and Bulgaria buys all its gas at market prices.
A row over gas prices led Russia to cut off supplies to Ukraine on 1 January. The dispute was resolved with the signing of a new five-year deal three days later.
EU Impact
The issue could affect the EU directly, as Greece, a member state, receives 82 percent of its gas from Russia -- via Bulgaria.
European Commission (EC) spokeswoman Krisztina Nagy said yesterday that it was not clear if the EU could do anything to support Bulgaria, which is scheduled to join the EU next year.
Johannes Laitenberger, chief EC spokesman, said the commission meeting on 11 January will examine the "lessons to be learnt" from the Russian-Ukrainian spat.
However, Laitenberger stressed that the EU executive is currently only empowered to draw up suggestions for a future joint EU energy strategy. All member states, he said, are separately responsible for making their own arrangements.
The EC has been careful over the past week to characterize the Russian-Ukrainian dispute as a "bilateral matter."
An EU diplomat, who requested anonymity, said it was a "fact of life" for the EU that it has to avoid jeopardizing energy supplies from Russia, on which it is heavily dependent.
The diplomat said there was an element of "quid pro quo" about the EU's reluctance to criticize Russia's strong-arm tactics. The official also said the absence of a joint EU energy policy allows Russia to play off member states against one another.
Click on the map for an enlarged image.
- Ukraine consumes 70 billion cubic meters (bcm) of gas per year. It produces 20 bcm of its own gas, has a signed contract to import 40 bcm from Turkmenistan, and in 2005 was getting 29 bcm from Russia as payment for transit of Russian gas.
- Ukraine sells some 7 bcm of gas a year to the West and places some in underground storage facilities. These facilities can hold 34.5 bcm.
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Ukraine is the sixth-largest consumer of gas
in the world and uses more gas than Poland, the Czech Republic, Hungary, and Slovakia combined.
- Russia has proven gas reserves of 47 trillion cubic meters (tcm) -- the largest in the world ahead of Iran and Qatar.
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Russia sells approximately 160 bcm to Europe each year.
By 2015, Europe is expected to import 300 bcm, or 40 percent of its projected needs from Russia.
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Russia's Gazprom is the world's largest gas company.
It is the only company allowed by Russian law to export gas outside the borders of the CIS. It also owns the gas-transportation system and most of the gas fields in Russia.
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The Russian state is Gazprom's majority shareholder
, with a 51 percent share. The company's ownership rights changed as of the beginning of 2006, with Gazprom stock being sold on the open market. The Russian state, however, will continue to hold the majority stake.