site.btaBulgaria Develops Its Natural Gas Market

Bulgaria Develops Its Natural Gas Market

November 23 (BTA) - While Bulgaria is preparing to liberalize its electricity market completely, it is also beginning to develop a natural gas trading segment, Deputy Energy Minister Zhecho Stankov told a discussion on Monday. Stankov said this will allow the local market to improve and become integrated into those of neighbouring countries.

With the construction of a natural gas distribution hub in Bulgaria, the country will acquire a functioning gas market, he predicted. The government has proposed a concept for the future gas hub in order to fulfill one of its main goals: the goal of diversifying gas supply sources and routes, he recalled. When the project is carried out, the country will have at least three different sources of gas supply and will thus fulfill one of the most important principles of the European energy market. In addition to importing gas from Russia and via the Southern Gas Corridor, it will also rely on local extraction, the Deputy Energy Minister noted.

He pointed out that last week the European Commission included the Bulgarian gas hub concept on a list of projects of shared interest, which means Sofia can expect funding from the EU.

Energy and Water Regulatory Commission (EWRC) Chairman Ivan Ivanov said the liberalization of the gas market is of key importance for the whole society. EWRC is planning changes to ensure that gas traders and suppliers will provide free and non-discriminatory access to the gas network. Every participant will be allowed to conclude bilateral deals for importing natural gas or buy locally extracted gas. The rules which must be set by EWRC should provide for gradual changes leading up to a liberalized market, Ivanov said.

At 47, Bulgaria's gas security supply quotient is the lowest in the EU, he said. Annual natural gas consumption in the country has stayed below 3 billion cubic metres in recent years, compared with over 5 billion cubic metres in earlier periods. Household consumption of natural gas accounts for only 4 per cent of total gas consumption, which is the lowest ratio in the EU. Approximately 71,000 Bulgarian households use this type of fuel, accounting for between 2 and 3 per cent of all households, while in developed Western countries the ratio exceeds 50 per cent.

These facts show that it is necessary to diversify gas supplies, Ivanov said, adding that this can be achieved by increasing local gas extraction and building interconnectors between Bulgaria and its neighbours. The final investment decision on building a gas interconnector between Bulgaria and Greece will be signed on December 10, which, according to Ivanov, will make the endeavour irreversible.

The EWRC Chairman believes that Bulgaria possesses much potential to extract natural gas from local sources. Two of the deposits are deepwater fields in the Black Sea. This increases the importance of the future gas hub, he said.