Банкеръ Weekly

Briefs

OVERGAZ: BULGARIA CAN BE GASIFIED IN 10 YEARS

Bulgaria can be gasified in maximum ten years' time, but this would require a normal legal framework and the presence of other companies competing with Overgaz, Sasho Donchev, Chairman of the Board of Directors and Executive Director of Overgaz Inc, said.
Overgaz Inc. marked its tenth anniversary, holding various events in the last days. One of them was the fifth seminar on Natural Gas: Present and Future organized last Tuesday.
Overgas has the ambition to control 30 per cent of natural gas distribution in this country, Donchev said. The company holds 23 of the 31 licenses issued to gas distributors in Bulgaria. So far it has invested USD50MLN in the construction of urban networks for gas distribution, which makes it the largest investor in the gas sector, company officials said. The construction of a network branching facility to supply gas to a household user costs the company about USD750.
There are some 1,200,000 households near the pipelines of the gas distribution network. They were included in a project of Overgaz for the gasification of Bulgaria developed in 1995, Donchev recalled. In his opinion, household gasification has not made any progress because there are not differentiated prices for gas users. If a price for household users were introduced now, it would be about USD250 per 1,000 cubic meters of gas, i.e. twice as cheap than electricity, Donchev said. According to him, the energy law does not help the activities of any energy enterprise in this country.
Bulgaria consumes the cheapest gas in Europe, Donchev emphasized. I do not think that Rem Vyakhirev's removal will change the attitude of Gazprom to Bulgargas and the other Bulgarian partners, he said. The gas transit rate is high enough. In his words, Bulgargaz gas must have the right to discuss and propose amendments to the contracts. Changing the pricing methods, however, does not necessarily mean a price reduction, he noted.

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