There is a political decision in Russia for Gazprom not to work with us

There is a political decision in Russia for Gazprom not to work with us

Also, the gas we have for September was almost 100% contracted by the previous government. And you saw the new price on the regulated market is significantly higher than it was in August. So just getting gas at any price or from any source does nothing for the economy. We will literally close the schools if we keep this up and the kids will have no place to study all winter long because the schools will stay cold.

Don’t you think you’re exaggerating?

I’m not exaggerating.

But Bulgaria is not so dependent on gas – 10-15% of the total energy mix depends on the fuel? Countries like Germany are much more dependent on gas as their industry and households are highly dependent.

Yes, but look at GDP per capita and people’s wages. People in Germany have higher wages, they can pay higher prices even if they don’t like it. But people in Bulgaria receive around 350-400 euros salary (the average net salary according to NSI data is 670 euros – footnote). Pensioners receive a 150 euro pension (the minimum pension is 235 euros – ed.). Imagine if you have to live on 150 euros, you have to pay for all your needs for food, clothes, heating, all utilities. Many people in Sofia say “we are ready to pay a higher price for gas, as long as it is not from Russia”. And I understand them, they have the means to do it. But this is a very small percentage of the population in Bulgaria (about 25% of the country’s population lives in Sofia – note ed.). And we must provide for those who are vulnerable, such as children and municipalities. They have budgeted their heating season based on the previous year, now we are not talking about a 15-20% price increase, but three-four times higher prices. So the municipalities have no means to adjust to this inflation, only to stop the heating in the schools. I invite all journalists and all these people who go to protests to talk to the municipalities if they really want to understand the issue, because it is very easy to speculate and say “you are going back to Russian gas”.

I know all the negative consequences of returning to Gazprom. They can stop the submission for any reason – political or technical. There are penalties that can make the contract unenforceable. Of course, we know this and consider all these risks. But if I can get that gas, which is already negotiated, at the right price, that will help the whole mix.

But the price (of Russian gas) is calculated based on stock market prices?

The price is tied to the exchange. But it is also partly tied to oil. This makes it significantly cheaper than gas, which is completely tied to the gas exchange – in this case, it is the case with liquefied gas. It’s also pipeline gas, which means we don’t have to provision slots, think about transit, think about swaps.

You said at a press conference that it would not be easy to negotiate with Gazprom because of the actions of the previous cabinet?

Yes.

And that you have to “compensate” for it. What do you mean? And what are you willing to do to bring Gazprom back?

We cannot offer anything to Gazprom. I just hope they have gas to sell. And they have a contract to fulfill. And they are ready to do it. The previous government reacted very emotionally. Okay, we don’t want Russia, we don’t want Gazprom either. This was possible in the summer, when gas is not needed for heating. Now in winter the outlook is completely different.

One of the events you mention is the expulsion of the 70 Russian diplomats – do you think Bulgaria should take them back to please Gazprom?

I do not think so. We should not compensate or make a political move to please Gazprom and make it happier and more compliant. We have not discussed and do not propose anything of the sort. But I would be happy to see less tension overall between the two sides. Now, why do you need a European country that is at loggerheads with Russia that is behaving aggressively towards Ukraine? Why does Europe need Bulgaria to be in a position to anger Russia with any actions and bring danger to the entire European Union? Because if Bulgaria is attacked, no matter what the reason, it is an attack against NATO and against the European Union. Then why will Bulgaria threaten the security of the whole of Europe? Historically, whether we like it or not, Bulgaria is closely connected with Russia.

But Bulgaria is a member of the EU. And you have the desire to take a step towards something that the EU does not want, and to break the sanctions?

Where are you from?

Germany.

Germany. So why is Germany complaining that Russia has stopped gas supplies for routine maintenance until September 3rd? Why? Germany must be very happy! Russia cut off the gas. That’s it. You are far from Russia! You no longer use Russian gas. Why are all your government, business, journalists complaining, calling Russia an unreliable supplier and not delivering the promised gas? Do you feel that gas supplies will not resume after September 3rd? Why then does Germany buy Russian gas? Why does France buy Russian gas? Why is Greece buying Russian gas? It’s very easy to be black and white. I’m all for diversification and security (on September 5, Russia finally stopped the supply through “Nord Stream 1” while the sanctions are in force – note ed.).

But you are trying to make a big “turn”.

We haven’t made any turns. We have already contracted this gas. All we need is to get the agreed gas. We are not discussing new contracts. We do not discuss extensions. We are not discussing increasing volumes. In the meantime, we are securing a variety of supplies from around the world, which will eventually make supplies from Russia unnecessary from next year. If we manage to do everything we planned and secure gas from Turkey and Greece. And after securing the slots, to negotiate a stable supply of LNG from a producer, not from intermediaries, but from companies such as Cheniere, Sempra, European Totale Energie, Shell. These are reliable companies that produce large quantities of gas, so we can rely on them. Then we can say that we have diversified and we can stay away from Russia.

What makes you think it will be more profitable than it is now?

If we work properly, we can negotiate large quantities. And what we are actually trying now is to connect with the neighboring countries. And with the help of the European Commission, we would like to try to organize a tender for the whole of South-Eastern Europe. If we manage to do this, gas will be supplied to all countries and then we will be talking about a completely different volume than the one we are looking for for Bulgaria. Bulgaria is a small market.

In addition, a few days ago we increased our capacity at the LNG terminal now under construction in Alexandroupolis. This will give us access to LNG at a very low transit and slot cost. So from 2024, roughly a year from now, we will avoid expensive transit supplies and regasification.

When will the interconnector with Greece for Azeri gas be ready?

It is scheduled to go into commercial operation in October, it should be completed – the plan is to have everything completed in mid-September. There are some mandatory tests and certifications. So on October 1, we should be able to receive gas through the interconnector, which is very important for us, because it not only increases capacity, but further reduces the price of gas from Azerbaijan.

Why did you delay the entry of the Interconnector Supervisory Board?

Don’t delay from us. This was done on the first day when we entered this office, there was an indication that there were errors in the documents relating to the name of one of the persons. So what we tried to do is correct one of the documents and resubmit it. But this mistake has been made in other documents as well. And the agency basically said you can’t fix everything and the paperwork would have to come back. All these errors were corrected a few days later

Why would people think we want to stop the interconnect? I mean what’s the use of stopping the interconnect?

Because this will necessarily return us to “Gazprom”? It will not help in any way to return to Gazprom. All the quantities that we should receive from Azerbaijan, we receive them now, but at a higher price.