Russia’s Gazprom halts gas supplies to 50%-owned Bulgarian distributor Overgas

By bne IntelliNews January 4, 2016

A major gas row unfolded in Bulgaria at the turn of the new year, as Russia’s state-owned natural gas major Gazprom suddenly halted direct natural gas supplies to Bulgaria’s Overgas Inc., in which it has a 50% stake.

Late on December 30, Zhaklen Koen, CEO of Bulgaria’s state-owned public gas supplier Bulgargaz, told local media he had received a copy of a letter from Gazprom Export to Overgas, in which the Russian company informs it is stopping supplies to Ovrergas as of January 1. A day later, prime minister Boyko Borissov assured Overgas’ 55,000 household subscribers they will not be left without gas.

Meanwhile, Overgas agreed deliveries from Bulgargaz in order to not interrupt deliveries to households. It told its industrial clients to turn directly to the state-owned monopoly. At the same time, Bulgargaz said it was assured by the Russian corporation it will receive the additional quantities at a 10% premium relative to current contractual prices.

So far, Overgas and Bulgargaz accounted for 10% and 90% of the natural gas supply to Bulgaria. In turn, Bulgargaz bought more than 93% of the quantity from Gazprom, whereas the balance is domestically produced.

Gazprom has reportedly agreed to sell its 50% stake in Overgas Inc. to Overgas Holding, controlled by local businessman Sasho Donchev. The deal, which will give Donchev full control over Overgas, is expected to be finalised by end-April.

The only available comment from the Russian side was made by the country’s foreign ministry which said that talks for settling accumulated commercial issues between Gazprom and Overgas Inc. continue, Capital weekly reported.

On the other hand, the Bulgarian company said it has no liabilities to its Russian partners and its natural gas supply contract expires in 2017. It also hinted at attempts for its business to be stolen by Bulgargaz.

Related Articles

EU to fund feasibility study on Slovakia’s proposed Eastring gas link to Balkans

The EU has agreed to help fund a feasibility study on the Eastring pipeline project, which would link Slovakia to the Balkan markets, Slovak transmission system operator Eustream announced on May 26. ... more

RBI doubles net profit y/y in Q1 as Russian business recovers

Raiffeisen Bank International (RBI), the second largest bank operating across Central and Eastern Europe by assets, reported that net profit almost doubled year-on-year to €220mn in the first ... more

Bulgarian prosecutors charge former foreign minister in procurement case

Bulgaria's specialised anti-corruption unit has charged former Foreign Minister Daniel Mitov with violating the laws on public finance and public procurement, ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss