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Last Updated: Friday, 6 January 2006, 13:43 GMT
Bulgaria in Russia gas supply row
 Central European Gas Hub in Baumgarten near the Austrian-Slovakian border
Bulgaria relies on Russia for gas imports
Bulgaria says it has become embroiled in a tussle with Russia over the price it pays for its gas imports.

Energy minister Rumen Ovcharov said Bulgaria was refusing demands to change its gas supply contracts with Russian state-run energy firm Gazprom.

Switching the contracts would effectively raise the price Bulgaria pays for its gas imports from Russia.

The news comes days after Russia and Ukraine settled a row which temporarily hit gas supplies across much of Europe.

Russia halted gas supplies to Ukraine on 1 January, after Kiev rejected a price rise that would have taken the cost of gas from $50 to $230.

Unacceptable offer

Gazprom supplies Bulgaria with much of its gas at below the market price, in exchange for allowing the company to use its territory to provide a number of other countries with Russian gas.

"The Russian side demanded that we renegotiate the scheme of payment for transiting Russian gas through Bulgaria to Turkey, Greece and Macedonia," Mr Ovcharov told Bulgaria's bTV television.

Under one contract agreed between Bulgaria's state-owned energy firm Bulgargaz and Gazprom, Bulgaria currently pays $258 per 1,000 cubic metres of gas directly delivered to the country.

However, Russia pays transit fees for gas intended for other countries in the form of an additional contract which allows Bulgaria to pay $83 per 1,000 cubic metres for some of its supplies.

Mr Ovcharov said Gazprom had offered to pay cash for the transit of its gas across Bulgaria, and in turn raise the price of the second contract to $258 per 1,000 cubic metres.

"We will answer that this offer is unacceptable," Mr Ovcharov said. "There are no review possibility clauses in our contract signed in 1998 to run until 2010."

Bulgaria is almost entirely dependent on Russia for its supplies of gas, although the country relies on nuclear and coal-fired power stations for most of its energy needs.


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