Bulgaria has found itself in a critical situation after Russian natural gas supplies were cut off altogether on Tuesday morning. Russia is the chief source of natural gas for this country, with small amounts available at a local gas storage facility and little more extracted at a local gas deposit.

Prime Minister Sergei Stanishev described Bulgaria as a hostage in a dispute between Russia and Ukraine and President Georgi Purvanov said that this country is likely to suffer the worst impact as it has no alternatives for gas supply.

The Prime Minister called an emergency meeting with his Economy and Foreign Ministers on Tuesday morning to consider the situation. The three later met with President Georgi Purvanov at the latter's request. The Prime Minister, the President and Foreign Minister Ivailo Kalfin held emergency talks with their counterparts and with EU officials. The Economy and Energy Ministry set up a task force to address the crisis.

The President convoked a meeting of the Consultative Council on National Security for Wednesday.

The chronology

Gas supply to Bulgaria's gas pipeline operator Bulgargas via Ukraine and Romania was halted at 3.30 a.m. local time on Tuesday, the Economy and Energy Ministry said. Gas transit to Greece, Turkey and Macedonia through Bulgaria was also disrupted.

To map out measures to cope with the situation and avoid industrial accidents, Economy and Energy Minister Dimitrov convened the Council for Security and Crisis Management with his Ministry. The Council set up a task force headed by one of the Deputy Ministers, to monitor and analyze the situation.

Dimitrov said that Bulgaria has started pumping 4.3 million cu.m. of gas from the Chiren gas storage facility. This is the maximum amount that can be pumped daily and it is expected to meet users' minimum demand.

Emerging from an emergency meeting with Foreign Minister Ivailo Kalfin, Economy and Energy Minister Dimitrov and Bulgargas CEO Dimiter Gogov, Prime Minister Stanishev said that the Chiren gas storage facility has a reserve of 570 million cu.m. which makes it possible to pump about 4.5 million cu.m. a day, or one-third of the normal consumption in the winter season which is 12 million cu. m.

In the Prime Minister's words, the top priority of the cabinet is to ensure heating for the population, for hospitals and schools. Economy and Energy Minister Dimitrov said that everything possible is being done to weather the impact of the crisis on common people.

Dimitrov said he hoped that the issue would be resolved within hours and normal supplies of gas to Bulgaria would be resumed.

Acting on instructions from the Economy and Energy Ministry, regional heating utilities nationwide have started preparations for switching to alternative fuels, such as heavy oil. A plan has been evised for redistributing the available quantities of gas so as to ensure the operation of the regional heating utilities and production facilities whose workcycle cannot be interrupted. The Economy and Energy Ministry called on all gas users to limit gas consumption and, where possible, switch to alternative energy sources.

The Emergency Situations Ministry has undertaken measures to avoid industrial accidents resulting from the disrupted gas supplies.

Bulgargas CEO Dimiter Gogov told a news conference that he does not know why all supplies of Russian natural gas had been cut off, nor when they would be resumed. He said the quantities of gas in the Chiren gas storage facility would last for a few more days. Gogov said that the hourly and daily amounts of gas pumped out from Chiren are larger than any other year. Gogov said that a schedule was being prepared for what he described as "voluntary" reduction of gas consumption in Bulgaria.

Gogov said that as soon as the crisis is overcome, the damage would be evaluated and compensation claims would be submitted to the suppliers.

PM Talks to Russia, Ukraine, Gazprom, EU

At a news conference in the afternoon, Prime Minister Stanishev said he had spoken to Russian Prime Minister Vladimir Putin and told him that Bulgaria had always been fair to Russia and Gazprom, and that he expected "everything necessary to be done to make sure Gazprom performs its obligations to Bulgaria".

Stanishev also talked to Ukrainian Deputy Prime Minister Grigori Nemirya and Gazprom CEO Alexei Miller.

During his talks with the Russian side, Stanishev was informed that all amounts of gas for transit are delivered to the border with Ukraine and that between January 1 and 5, Ukraine diverted about 65 million cu.m. of the gas designed for transit, causing a drop in Russian deliveries by as much.

Stanishev was assured by the Ukrainian side that they would do everything to discharge their duties. According to data provided by the Ukrainian side, the gas delivered by Russia was 210 million cu.m. less compared with the previous days, Stanishev said.

"To us, this is a question concerning the relations between the two countries, and Gazprom has an obligation to supply the gas designed for Bulgaria to the Bulgarian border," Stanishev said. He added that it is unacceptable to hold Bulgaria and other European countries hostages and make them victims of a dispute which is of economic, commercial and, to a considerable degree, of political nature. "This country has always paid its bills and honored its contractual obligations and has the right to expect the same in return."

Putin informed Stanishev about the talks between Gazprom and the Ukrainian state company Naftogaz. In his words, the Russian side proposed very good conditions for the deliveries of gas to Ukraine - at a price of 250 US dollars per 1,000 cu.m. "This is much lower than the European average," Stanishev observed.

Ukraine refused to accept the conditions, including a proposal for an alternative approach such as joint export of gas to Western Europe as a means of compensating the Ukrainian side.

"The other point at issue is Ukraine's insistence to have an intermediary, while Russia does not want to have an intermediary," Stanishev said.

He said he would propose that independent observers be sent to verify the amounts of gas reaching the border between Russia and Ukraine. He added that the Russian side is ready for that.

According to the government press office, Bulgaria will make an official proposal about the independent verifying officers at a EU foreign ministerial on January 8-9.

On Tuesday evening, Stanishev spoke on the phone to European Commission President Jose Manuel Barroso and informed him about "the difficult situation in Bulgaria after the unprecedented total cutoff of gas supplies to Bulgaria", said the government press office. The Bulgarian government leader reportedly said that unlike Greece and Romania, this country has no alternative sources of natural gas - other than a local gas storage facility - which places it in an extremely difficult situation.

President speaks to Ukrainian counterpart

President Purvanov talked in the evening on the telephone with his Ukrainian counterpart Viktor Yushchenko, Purvanov's press secretariat said. He was quoted telling the Ukranian President that while a number of European countries were getting reduced gas supply from Ukrainian territory, Bulgaria and its neighbours had been cut off altogether. Bulgaria is worst off because, unlike the other affected countries of the region, it has no alternative options and its domestic reserves are modest, so the crisis caused by suspended supply may assume large proportions, the Bulgarian President said.

For his part, Yushchenko briefed Purvanov on the volumes of gas pumped to the Ukrainian border from Russia and transited to the European countries.

The two state leaders noted that since there was a discrepancy in figures on the gas pumped to Ukraine, it was important to have independent monitoring at the gas traffic control points.

Purvanov called for resuming gas supply to Bulgaria, be it in smaller volumes, and Yushchenko promised to talk to Naftogaz's management about finding a solution in the near future.

The Ukrainian President confirmed his participation in the Sofia summit in April on "Natural Gas for Europe: Security and Partnership", which will look at energy security matters from a strategic perspective, the presidential press secretariat said.

Source: BTA