Bulgarian gas price to rise gradually

Dec 19, 2006 01:00 AM

Bulgaria and Gazprom on signed a new gas deal that is expected to lead to a gradual increase of gas prices for the country.
Gazprom CEO Alexei Miller said the new deal would be in force until 2030 and would "mark the end of the barter trade, which belongs to the past, and introduce transparent market rules."

Bulgaria's previous gas pact with Gazprom comprised two agreements -- one for direct deliveries and a gas-for-transit agreement, under which Bulgaria was able to buy gas at a reduced price of $ 83 in exchange for allowing Gazprom to use Bulgarian pipelines to ship gas to Greece, Turkey and Macedonia. With the new arrangement, the gas-for-transit deal will gradually be abandoned; Bulgaria will pay cash for its gas deliveries and receive a transit fee from Gazprom.
"Until January 2013, Bulgaria will enjoy a transitional period that will allow Bulgarian users to prepare themselves and will make the change painless," Miller said after signing the deal.

Bulgaria's economy and energy ministry said prices would rise "smoothly from April next year until the end of 2012." The Bulgarian economy and energy minister, Rumen Ovcharov, said that by accepting the price increase, Bulgaria managed to secure itself long-term income from gas transit.
Miller said guaranteed transit volumes were agreed at 17.8 bn cm of gas per year, with an option to ship another 5 bn cm annually "depending on the demand for Russian gas in southern Europe and Italy."

Source: The Moscow Times
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