0 - Highlights

- The basic problem of Bulgaria in the energy sector is the existence of a huge and inefficient industry sector.

- In 1995, the Government adopted a new Strategy for development of the Energy Sector of the Republic of Bulgaria during the period 1995 till 2010 and in the long term till the year 2020. The main objectives are an optimal and efficient development of the energy sector, based on domestic and imported energy sources, and a profound change of the structure of the energy balance towards natural gas.

- Development of the natural gas sector is seen as an important contribution to the energy strategy. The share of natural gas in primary energy consumption is expected to reach 30-35% by 2020, compared with 17% today.

- The Bulgarian gas industry is dominated by Bulgargaz Plc, the state-owned gas company, which holds a monopoly on the transmission and distribution of natural gas throughout the country.

- After 1990, many private and joint stock companies appeared on the gas market in Bulgaria. Some of them are: Topenergy, Overgas, Eurogas, Energoproect, Gasagroterm, Gasenergo etc. These companies bid on distribution rights in various municipalities. To date, there is little distribution to the residential and commercial sectors and gas distribution is mainly to the industrial customers and to district heating.

- Up until the summer of 1997, Overgas has been the only local distribution company active on the domestic market. The fall of 1997 should be marked by domestic gas flowing to several municipal buildings in the city of Stara Zagora.

- During the summer of 1997, Overgas stated that they intend to pursue demonstration project in Bankya, Russe and Lovech.

- Bulgargaz is also wishing to establish themselves in the gas distribution sector. A small demonstration project of domestic gas distribution has been operating in Botevgrad for the past few years.

- Since 1990, there has been political turmoil in Bulgaria. There has been 7 or 8 changes in government and with each change, new people and new policies are introduced. The energy sector is amongst the most affected by the political environment. In spite of these turbulent times, energy efficiency, the increased use of natural gas as an energy source, and the expansion of natural gas into the residential sector has always been in the priorities of each of the governments.

- Progress in adapting the gas industry to a market economy has been slow. Many of the key elements of a legal and regulatory framework are still lacking. The gas pricing and the introduction of a regulatory framework in the gas industry are the most pressing issues.

- There is only one uniform, market-value based gas price, monthly adjusted by the changes in the Mediterranean fuel oil (3.5 per cent sulfur content). This method of price setting does not produce a real market-based natural gas price. There are proposals to create price and tariff systems for selling gas to final commercial and residential consumers.

- Gas demand increased 22% in 1995 to 6 Bcm. Natural gas is supplied only to the industrial sector and the producers of heat and electricity.

- Natural gas demand is expected to reach 8-9 Bcm in 2010. There are plans to gasify urban areas and supply gas to the commercial and residential sector. This gasification development depends on the establishment of an appropriate regulatory framework and a new gas pricing policy.

- Bulgaria could become a gas distributing centre for the Balkans in the future. At present, Bulgaria is able to transit 11 Bcm/year, but throughput in 1995 was only 6 Bcm to Turkey. This strategic role will grow in the future with new transit lines to Greece, Macedonia and Serbia.