Bulgaria's Energy Group BEH plans SEE Expansion
Bulgarian state-owned energy group Bulgarian Energy Holding (BEH) plans to expand to neighbouring Southeast European (SEE) markets through joint ventures as a step tobecoming a regional leader in the coming years, senior company officials said.
In the future BEH will also move to participate in well exploration in gas-rich countries, the group's chief executive officer Galina Tosheva told SeeNews in a recent interview.
BEH's expansion strategy will be initially focused on the Macedonian market after which the group will move on to other SEE states, Tosheva said. "Macedonia appears to be very interesting - the [energy] sector will develop very fast from now on, they [the Macedonian authorities] have already announced tenders for hydropower plants and cogeneration units."
"What we initially plan is participation in joint projects, "BEH's board chairman Boris Pekov told SeeNews in another interview. Talks are under way on a cogeneration unit project in a neighboring country, in which BEH's gas company Bulgargaz could participate, he added without elaborating.
Last year the former Bulgargaz Holding, which was later incorporated in BEH, said it planned to team up with France's Dalkia in a project for the construction of a cogeneration facility in Macedonia worth some 100 million euro ($128.2 million).
There is no progress on this project, Pekov said.
At a later stage, BEH considers expanding to Albania and Serbia.
"Talking about[expansion in] the region - this means initially Macedonia, after that Albania, as for reaching Albania we would need a direct connection to it," Tosheva said.
Serbia could also come into the group's focus, Pekov added.
The holding group's plans for each country will depend on that country's energy priorities, Tosheva explained.
Parallel to itsexpansion in SEE,BEH plans to implement projects worth some 900 million euro in Bulgaria over the next two or three years. The projects are aimed at expanding the country's electricity and gas infrastructure, and their goal in the short term is to diversify Bulgaria's gas supplies, which come almost entirely from Russia via Ukraine.
The list of BEH's top projects includes the construction of a gas interconnection line between Bulgaria and Greece worth 125 million euro, and a gas interconnection line between Bulgaria and Romania worth 30 million euro; construction of a terminal for liquefied natural gas estimated to cost 500 million euro; extension of the capacity of Bulgaria's sole gas storage facility at Chiren expected to cost 250 million euro; construction of a gas storage facility in Galata worth between 200 million and 300 million euro; research of Bulgaria's natural gas potential for extraction, and the construction of a second electricity transmission line to Greece.
BEH will also focus on strategic projects such as the 3,300 kilometer Nabucco pipeline, planned to carry 31 billion cubic meters of Caspian natural gas to Europe; the South Stream gas pipeline project, designed to carry Russian gas from Novorossiisk port to Bulgaria's port of Burgas via a 900 kilometers pipeline under the Black Sea; and the construction of the 2,000 megawatt nuclear plant Belene, on the Danube.
The group is also interested in drilling for gas, both at home and abroad, Tosheva said.
"However, participation in the development of deposits is not that easy and is quite a long process, an agreement with the local owner is needed, we are working in that direction," she said and added that talks with Azerbaijan are under way.

FINANCIAL GOALS

BEH's consolidated revenue is expected to reach 5.977 billion levs in 2009, up from preliminary 5.684 billion levs in 2008.
The group sees its consolidated pre-tax profit tripling to 471 million levs this year.
"This [three-fold rise] is based on efficiency improvement, cost cuts, bigger profit from investment projects, the synergy effect, as a whole, which will be achieved within the companies in the group," Tosheva said.
She, however, added that these projections were made before the start of the financial and economic crisis last year andcould be revised.
BEH, whose total assets are estimated at 9.7 billion levs ($6.36 billion/4.96 billion euro), incorporates assets of Bulgaria's sole nuclear power plant Kozloduy, gas company Bulgargaz, gas transmission system operator Bulgartransgaz, telecommunications operator Bulgartel, power grid operator NEK and its entirely-owned system operator ESO, coal-fired power plant Maritsa East 2 and the Maritsa East coal mines. Bulgaria's third largest energy company - the debt-ridden heating utility of the capital, Toplofikatsia Sofia, too is expected to become part of BEH after the state took full control over the company last year.