Bargains with Bulgaria may change South Stream’s routeBulgaria has decided to take maximum profit from its approval to shelter the pipes of the South Stream gas pipeline, RBK Daily comments.
Sofia insists for Gazprom to hike the transit fee on the territory of Bulgaria. In fact, the Russian gas monopolist has its own trumps, too. If Bulgaria asks for an unacceptable price, Moscow may ignore Sofia, redirecting South Stream’s pipes to Romania.
The current fee for the natural gas transit to Turkey, Greece and Macedonia is too low, Bulgarian Minister of Economy, Energy and Tourism Traycho Traykov said during the meeting with Gazprom CEO Alexey Miller. However, Traykov did not specify how much the transit fee should be increased.
According to information released from the press office of the Bulgarian government, the issue around the cost of the transit has been raised by Bulgaria Prime Minister Boyko Borisov.
The fee should be reexamined in the context of the South Stream project in a way that will not harm Bulgaria, the government remarked. At the moment, Gazprom pays a transit fee of USD 1.7 per 1,000m3 of gas per each 100km through the territory of Bulgaria. The fee paid to Ukraine for the same service, for instance, runs to USD 2.78/1,000m3/100km. However, Kiev got a higher fee at the expense of market price for the natural gas.
By the way, according to data of the Secretariat of the Energy Charter, in 2006, at the expense of the low transit fee, which was then at almost the same level (USD 1.67), Gazprom has been making certain discount for the gas to Bulgaria.
It used to pay for the transit service with gas at the price on only USD 83/1,000m3. This way the disagreement over the transit fee should be connected to the price of gas, which means it may turn out to be as severe as the one with Ukraine.
We should also notice that in the future Gazprom will continue holding the monopoly over gas deliveries to Bulgaria, which strengthens its position in the negotiations, said Alexander Nazarov, senior analyst at IFC Metropol.
By the way, it is not right to examine this case as a life-and-death issue. For instance, hiking the transit fee to Ukrainian levels will cost Gazprom up to USD 60 million per year. At the background of the total report on Gazprom’s expenses, which run to USF 5.5 billion for nine months, this USD 60 million does not seem as a very significant sum.