Let us state the publicly known facts and try to assess the business merits of the deal. Bit by bit, slowly and systematically, so that even non-experts can understand. We have a standing valid gas transit contract between Gazexport and Bulgartransgaz, using the current Trans-Balkan Pipeline, until 2030 with “secure” revenues of $ 1.2 billion. This is not the total contract amount, just the ‘ship or pay’ segment, accrued until the end of the contract. This is regardless of whether Gazprom decides to end transit through Ukraine, to take up alternative routes through Turkey, Germany or the North Pole. Cash in hand. Or almost. Giving up on these receivables is a condition sine qua non, set by Gazprom, if we want to enter into the new venture
Electricity price hiccups over the last two months seemed timely to attest the required price assumptions for the financial model of the Belene NPP. These days, prices have returned to normal levels, but the idea of higher electricity prices, at par with revenue projections, gained some ground – ostensibly the free market at work. There is a lot in common between the procedural patterns behind the Belene NPP and the Balkan Gas Hub. Most of the activities only nominally happen in the open – formal tender procedure, the rite observed, the end – terms agreed in advance. There is no true competition, no market interplay, no real public scrutiny, just political expediency. Summarizing the main features of the applied policy line in pursuit of a lighter version
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The issue of why the EC imposed an unprecedented fine of 77 million euros on the Bulgaria Energy Holding (BEH) and its subsidiaries, Bulgartransgaz and Bulgargaz, is quite extensive, and a single angle of analysis could hardly tell the whole story. I will focus on a more holistic approach, answering questions about matters on which the audience has been kept in the dark or misled by “experts” serving the culprits consciously/for a reward/ or through incompetence or naivete. 1. Attempts to subdue the real issue, as stated in the EC’s investigation, and direct criticism to the complainant, Overgas, are irrelevant and decry nervousness. The benefits of the EC decision will be shared by all customers and players in the gas market, not just Overgas. Following this decision of the
Shortly after President Aliev inaugurated the first phase of the Southern Gas Corridor and announced the opening of the TANAP pipeline on June 12th, Russia beefed up its wartime machine to block competition to its gas supplies in Turkey, Greece and Bulgaria. The timing of the agreement between the Turkish government and Gazprom on the onshore segment of Turkish Stream matched to the day the news from Azerbaijan. Ostensibly, this a legitimate defense of Gazprom’s market shares, having already lost substantial chunks in the diversified market of Turkey and Greece – where it accounts for 50-60% of the gas imports. When the periscope moves on to Bulgaria – the bounty is a complete and seemingly durable monopoly. Yet, even in this small market, the Russian state company has
It is strange to watch that the Bulgarian Energy Holding has opted to push the limits of the patience of the European Commission’s anti-trust body whereas Gazprom has chosen reconciliation. Concurrently, Russian media are singing praise for Bulgaria, as the only EU member in the CEE that has formally voiced support for Gazprom’s commitment letter – to be used as the basis for a case resolution. The Directorate-General for Competition is conducting a parallel investigation into BEH on its abuse of a dominant position, which is reminiscent of the case against Gazprom. Easy comparisons might be misleading but rather interesting and revealing.1 The scale of the two cases is incommensurate. There are many nuances, yet the matrix is identical. What is most important – the comparison