site.btaEx-Energy Minister Traikov: "Bulgaria Should Become Part of Southern Gas Corridor"

Ex-Energy Minister Traikov: "Bulgaria Should Become Part of Southern Gas Corridor"


Sofia, February 24 (BTA) - Former Energy Minister Traicho
Traikov said in a BTA interview that Bulgaria should become part
of the Southern Gas Corridor carrying natural gas from
Azerbaijan to Europe. "In the current situation, which is so
dynamic as the cards are being redealt, it is almost compulsory
for Bulgaria to seek a new place for itself," Traikov said,
commenting on an idea to build an international gas hub in
Bulgaria. The ex-minister currently sits on the Citizens' Board
of the Reformist Bloc.

He believes that, up to a certain moment, Bulgaria was in a
position to derive economic benefits from the South Stream gas
pipeline which would carry Russian natural gas to Europe.
Eventually, due to the way the negotiations were conducted and
because the project grew more expensive, it became unlikely that
the project company in which Bulgaria held a 50 per cent stake
would gain anything from the venture, he said.

Creating a gas hub near the Bulgarian seaport of Varna requires
a liberal energy market in the country, which means trading
rules. It also requires gas storage facilities and diverse
sources of gas. "If you have multiple suppliers and storage
facilities, you can choose the best moment - when to buy gas and
from whom - in order to make profit. It also takes
infrastructure," Traikov said. According to him, the
infrastructure in Bulgaria is relatively good, the country has a
gas storage facility and a liberal market. However, Turkey has
the advantage of using multiple sources of gas. In other words,
Bulgaria and Turkey possess the necessary things to varying
degrees, he said.

"We can expect to receive Azeri gas when we have the required
infrastructure. Until recently, that was the most feasible
alternative to Russian gas. Other possibilities have also
emerged in recent years, but I think it is imperative to create
the Southern Gas Corridor, and then Bulgaria will certainly not
be left out," Traikov said.

There is not much interest in Bulgarian gas and oil reserves.
This is partly due to the current market situation, with large
oil and gas companies putting off new projects and cutting down
on expenses to handle oil price fluctuations, he said. "But our
reserves are a national asset and they should be offered at the
right moment to the right investor," he said.

In the case of the Khan Asparouh operation in the Black Sea, it
was fortunate that the competitive bidding procedure started at
the right moment and a good investor was selected, he noted. The
investor is an international consortium which includes France's
Total, Austria's OMV and Spain's Repsol.

The concession royalties which gas operators pay to the
government are actually a way of getting gas at no cost, because
the government uses the royalty money to buy gas, Traikov
explained. Besides that, the price at which gas producers in
Bulgaria sell their output is defined in relation to the price
of imported gas. In the case of Melrose Resources (eventually
superseded by Petroceltic), it was agreed that the price of gas
which the company extracts in three gas fields near Varna should
be 30 per cent lower than that of imported gas, Traikov said.