Банкеръ Weekly

Briefs

OVERGAS TO BECOME NATIONAL MONOPOLIST IN GAS DISTRIBUTION SECTOR

The first consumers of natural gas in Sofia will be included in the gas distribution network in October 2004, the Deputy Executive Director of Overgas Svetoslav Ivanov promised during the 2004 Investment Forum. After long legal disputes, in October 2003 Overgas was at last granted by the State Commission for Energy Regulation a 10-year licence for gas distribution in the capital city. The company which in fact represents Gazprom in the contract for gas deliveries to Bulgaria, already holds 26 licences for the construction of gas distribution networks in our country. Its ambitions are that by the year-end the number of its permissions should exceed 30, including licences for the six biggest Bulgarian towns, Mr. Ivanov specified. Thus, Overgas will become a national monopolist in the gas distribution sector, experts in the branch said. EUR10MN will be invested in the construction of a low pressure network in Sofia this year. The first 3,000 consumers in the capital will get 10,000,000 cu m of gas through the 175-km-long pipes. During the first stage the network will include the suburbs from Suhodol to Gorublyane. Construction will begin in end-April and will last till November. In September-November the network will span in the section between Tsar Boris III boulevard and the Malinova Dolina suburb. After gas supply to the southern arc is installed, pipes will be laid in the northern residential quarters of Hadji Dimiter, Stefan Karadja, Suhata Reka, Levsky, Poduyane and Metalurg. Gas will also reach the villages of Lozen and German. The total length of the gas conduits will be about 1,150 km. The entire project is worth EUR49.4MN, and we intend to invest another EUR38MN by the year 2013, Mr. Ivanov said in front of the BANKER weekly. We'll invest part of the profit of Overgas Inc. and we'll be seeking to attract more funds. Within a few weeks negotiations with Bulgarian banks for additional guarantees and for crediting of end consumers will be completed, Mr. Ivanov explained. Meanwhile, it became clear that the project of Overgas for gas supply to the towns of Veliko Tirnovo, Gorna Oryahovitsa and Lyaskovets, has won the tender, organized in connection with the memorandum between the Bulgarian and the Dutch government for reducing the hothouse gases in the atmosphere. The contract will be signed on April 26. According to preliminary information, by the year 2012 the Netherlands will buy some 350,000 tons of carbon emissions and part of the paid sum will be invested by Overgas in the gas distribution network on the territory of the three towns. Currently, the price of carbon emissions is about USD5/ton on average.

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