Bulgargas CEO Sees 2-4% Drop in Natural Gas Price

Bulgargas CEO Sees 2-4% Drop in Natural Gas Price

The price of locally produced gas will be slightly lower as of January 1, 2011, Dimiter Gogov, CEO of Bulgargas, said in an interview for the Monday issue of the "Monitor" paper. "Given that Russian gas charges are expected to rise due to the more expensive oil, our goal is to avoid a markup of the price for Bulgarian consumers. Even more, it is very likely to decrease by 2 to 4 per cent," he added.

Gogov voiced hope that the negotiations with Gazprom will eventually result in an updated price of natural gas that would ensure higher competitiveness of Bulgarian producers running on gas. Serious talks are in store regarding the price setting formula, Gogov said further. Two key components - quantities and price formation - will be at the basis of these talks. These issues will be discussed at the next meetings, the first of which is scheduled for the current week and will be held at company level.

During their latest meeting the sides discussed the signing of a new agreement. According to the existing arrangements, the document should be finalized by the middle of 2011. The contracting party on the Russian side will be Gazpromexport, being the only licensed Russian company for the export of natural gas.

Gogov said that Bulgargas will report a loss by the end of the financial 2010. There is no way to compensate for all negative events of the past year, he explained. However, profit is expected to be posted in the fourth quarter. The quantities that are expected to be yielded from the new deposits near Kaliakra and Kavarna will be 70 million cu m rather than 100 million, as projected. This is due to the late launching of the gas production activities, Gogov specified.

Source: BTA

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