Gazprom To Review Bulgarian Demands

SOFIA, Bulgaria -- Gazprom will look into Bulgaria's demands for compensation over a cut in Russian gas supplies, in line with existing contracts, deputy chief Alexander Medvedev said Friday.

Bulgarian Economy and Energy Minister Petar Dimitrov submitted a letter to Medvedev, who arrived in Sofia on Friday, demanding either direct financial compensation to affected industrial consumers or deliveries of gas at a discount price.

Dimitrov said at a joint news conference with Medvedev that a third option for compensation envisioned access to Russia's pipeline network for the possible transport of gas from third countries, possibly Caspian, at discount transit fees.

Medvedev said he expected that Gazprom would reply within two weeks.

"The signed contracts between the supplier and the consumer clearly determine the conditions [for compensation]," Medvedev said, speaking through an interpreter.

"We think force majeure conditions took place, and we did not have the physical possibility to provide gas to Europe, including to Bulgaria," he said.

"Despite that, we think the sanctions which we may bear might not fall under the force majeure conditions, and that is why we are reviewing the possibilities with our partners of solving these issues strictly in line with the signed contracts," he said.

Medvedev said he did not see the need for Bulgaria, which is almost fully dependent on Russian energy, to transit gas from other countries, because Russia had enough supplies.

Gazprom declared force majeure on its exports to Europe via Ukraine on Jan. 13.

The cutoff stemmed from a dispute between Gazprom and pipeline transit state Ukraine that affected roughly 20 countries.

Russia and Ukraine have blamed each other for the cutoff.

"Even if there are no formal legal grounds, it is in the interest of Gazprom and the good cooperation ... compensations to be paid to gas consumers in Bulgaria," Dimitrov told reporters.

Bulgaria was left without any deliveries for 15 days and estimates direct company losses at about 200 million levs ($133 million).

Dozens of companies had to shut down production and hundreds of thousands of consumers were also left without heating in the depths of winter, provoking widespread public anger and street protests in Bulgaria, the poorest nation in the European Union.

"I would like to express my sympathy to the people and companies which have suffered from the gas crisis," Medvedev said.

The Bulgarian economy and energy minister reiterated his country's demand to review supply contracts and remove intermediaries.

Gazprom now delivers gas to Bulgaria via three distributors, which are controlled or partially owned by the Russian behemoth.