site.btaAssociation of Bulgarian Employers' Organizations Calls for Talks with Gazprom on New Natgas Supply Contract

In a letter to Prime Minister Kiril Petkov, Finance Minister Assen Vassilev and Energy Minister Alexander Nikolov, the Association of Bulgarian Employers' Organizations (AOBR) has indicated that the Bulgarian State is obliged to ensure the country’s energy security as Bulgaria is the only EU member to have an expiring natural gas contract with Gazprom Export OOO, the Bulgarian Industrial Association said in a press release here on Wednesday.

On March 19, Deputy Prime Minister and Finance Minister Assen Vassilev said that, amid Russia’s invasion of Ukraine, Bulgaria cannot hold talks with Gazprom to renew the agreement on natural gas supplies which expires shortly, and will be looking at alternative supplies, such as gas from Azerbaijan. However, the Azeri gas price would be higher than the Gazprom contract price, according to Vassilev and Energy Minister Alexander Nikolov.

AOBR considers it compulsory for the state-owned gas supplier, Bulgargaz, to take actions for renewal of the long-term natural gas supply contract through a letter by proposing conditions for a new contract, which will not revoke actions for capacity reservations or using alternative sources of supply.

Bulgargaz should become directly involved in the actions on the regional gas markets by obtaining a license to trade on the Balkan and EU gas markets, thus becoming an actual natural gas trader, who works in the interest of Bulgarian consumers, the Association added.

Bulgaria’s contract with Gazprom will expire in 2022, AOBR recalled, expressing concern that some government members have told the media that the country will not hold talks with Gazprom on a new contract. Not holding talks will make long-term business planning impossible. The business environment will become unpredictable, discouraging investments, especially since there are no agreed quantities and capacity, nor clarity on how much it will cost Bulgarian consumers, AOBR said.

In the Association’s view, government’s decisions on the security of energy supply should also be economically justified. The business sector supports the idea of diversification of gas supply but considers security and continuity of supply to be of key importance to preserve the competitiveness of Bulgarian economy, AOBR also noted.