Bulgargaz report: The decision was taken at an operational meeting of the Council of Ministers on April 13
Petkov’s cabinet ignores four letters from Russian company and detailed instructions from Gazprombank
BEH and the Ministry of Energy are informed about everything
On April 13, 2022, at an operational meeting of the Council of Ministers, it was decided that Bulgargaz would not pay for gas under the contract with Gazprom in rubles. This happened half a month before the alleged extraordinary announcement by Petkov’s cabinet that the Russian company was shutting off gas from 07:00 on April 27 to Bulgaria, despite active correspondence with the Russian company.
Everything is clear from a report to the executive director of Bulgargaz EAD Lyudmil Yotsov, prepared by heads of directorates in our gas company, which Trud has. The document was registered with Bulgargaz on April 24, 2022 and contains all the details of the correspondence between Bulgargaz and Gazprom during the month of April in question. It is even stranger that despite the decision from the meeting of Dondukov 1, Bulgargaz wrote a letter to Gazprom for further clarification on the new mechanism for payment for supplies. As can be seen from the report, the letter was issued on April 15, 2022, or two days after the operational meeting with Prime Minister Kiril Petkov.
On April 15, 2022, the Deputy Minister of Energy informed the head of Bulgargaz and the head of BEH that at an operational meeting of the Council of Ministers on April 13, 2022, it was decided that Bulgargaz would not take action to implement Gazprom’s proposal. .
The report exhaustively lists the correspondence with Gazprom, starting with a letter ex. of the President of the Russian Federation, as of April 1, 2022, the supply of natural gas under Gazprom’s foreign trade agreements for the supply of natural gas with foreign persons, payments under the Agreement should be made in rubles.
As early as April 1, Gazprom informed Bulgaria about the new ways of paying for Russian gas on the basis of a decree issued by the President of the Russian Federation.
Attached to the letter are instructions from several pages of Gazprombank with the steps to open an account in Russian rubles to make payments for the supply of natural gas. The Bulgargaz report states that “if Bulgargaz agrees to the terms and signs the letter, it will be considered an integral part of the Agreement.”
The accompanying instructions from Gazprombank with detailed steps for payment in two accounts – in dollars and the internal currency conversion in rubles for gas supplies.
From the report, as well as from the correspondence between Gazprom and Bulgargaz, it is clear that on April 1, 2022, our government knew that in case Bulgargaz did not make payments under the Agreement in Russian rubles, Gazprom would suspend gas supplies.
On April 8, 2022, in another letter with issue GE / 02-1965, Gazprom informed Bulgargaz that all subsequent payments for deliveries in April 2022 must be made in Russian rubles, and the payment is due no. later than 18.04.2022
Bulgargaz has informed Bulgarian Energy Holding EAD and the Ministry of Energy about the letters received from the Russian supplier. Two more letters from Gazprom follow – issue GGE / 02-2266 of April 22, 2022, in which the Russian company informs that by virtue of a point of Vladimir Putin’s decree, Gazprom is prohibited from further supply of natural gas to foreign buyers in case the payment is not made or is made in foreign currency, as well as if it is in an account in a bank that is not authorized to do so.
The second letter from Gazprom dated April 8, 2022, in which the Russian company again noted that payments from April 2022 must be in Russian rubles.
Only the last letter from Gazprom, dated April 26, 2022, became available to the general public, which the gas giant informed Bulgargaz that they were suspending gas supplies. In the report of Bulgargaz it is described with ref. №ГЭ / 02-2306 with the following: “in connection with non-receipt of payment, in accordance with the Decree of the President of the Russian Federation, the supply of natural gas shall be terminated as of 07:00 on 27.04.2022.”
From a report of the Minister of Energy Alexander Nikolov to the Council of Ministers:
No EU sanctions banning payments in rubles have been adopted so far
“… Beyond the thus described commercial, financial and legal risks that Bulgargaz EAD would take, in case it takes action to comply with the instructions of the Russian side within the specified period of 18.04.2022 under the” threat “that they will be supply is suspended, there is also a reputational risk for the Bulgarian side from imposing sanctions by the European Union.
According to EC President Ursula von der Leyen, whose statement was quoted by the media on August 8, 2022. “… paying in rubles will be a violation / circumvention of sanctions imposed by Russia.”
Although EU sanctions banning the payment of gas in rubles have not been adopted so far, in view of the current situation, this fact may become relevant as soon as possible … “
Because of the “take or pay” clause
We owe money for the requested quantities even if we do not use deliveries
The price is the average annual
The report sent by Bulgargaz to the EWRC for requested, purchased and estimated quantities for 2022 under the long-term contract with Gazprom №02-12-13 dated 15.11.2012, which is valid until 31 December 2022 d.
Bulgargaz EAD has obligations under the take-or-pay clauses under long-term contracts with Gazprom Export, according to a letter to the Energy and Water Regulatory Commission (EWRC) dated April 8, 2022 from the Executive Director of Burgasgas ”Ludmil Yotsov. Trud has the correspondence between Yotsov and the head of the EWRC Stanislav Todorov.
According to the document, they envisage the following: “Under the contract with OOO Gazprom Export, the obligation under the“ take and pay ”clause is for 80% of the annually agreed quantity. In case of non-performance, Bulgargaz EAD owes payment of the unaccepted quantities in the amount of 70% of the average annual delivery price. Bulgargaz EAD has the right to receive these quantities within 6 months after the expiration of the contract, paying them in the amount of 30% of the average annual price in the last year of the contract and to receive no more than 15% of the annual agreed quantity. In addition, Bulgargaz EAD has an obligation to accept in minimum summer quantities under the contract, as Burgasgas EAD owes a penalty for unaccepted summer quantities in the amount of 4% of the value of unaccepted quantities, calculated on the basis of average delivery price for the summer season . ”
The clause is applied on an annual basis, as the difference between 80% of the annual program of the contract is equal to 30,653,000 Mwh and the quantities accepted by Bulgargaz EAD for the calendar year, the letter states.
It also states that the penalty for non-compliance with the minimum summer quantities applies after the end of the summer delivery period April-September, in case the accepted quantities are less than the minimum summer quantities, “defined as 38% of the annual program or 11,648,140 MWh ”.
“Taking into account the above, for the period January-April 2022 of Bulgargaz EAD the take-or-pay clause has not been applied,” Yotsov explained in a letter to the EWRC.
Chronology of lies
“Paying in rubles is a violation of sanctions”
After the cabinet meeting, Prime Minister Kiril Petkov announced that Asen Vassilev and Alexander Nikolov were leaving for Brussels urgently.
As can be seen from the documents and the correspondence of the Bulgarian companies with Gazpom, there is nothing extraordinary in the suspension of gas supplies to our country. However, the situation was presented by the government as more than extreme, accompanied by statements and emergency shuttles to Brussels.
8.40 pm, April 26 – The Ministry of Energy issued an extraordinary press release saying that Gazprom had sent an official notification to Bulgargaz that it would suspend gas exports to Bulgaria on April 27. “Prime Minister Kiril Petkov and Deputy Prime Minister Asen Vassilev have been informed of the situation.”
8.45 pm, April 26 – Late in the evening, “We continue the change” announced on its Facebook page that Gazprom is suspending natural gas supplies to Bulgaria without any warning. The party said the government was working actively to keep gas prices to a minimum.
9.00 am, April 27 – The Minister of Energy Alexander Nikolov made an extraordinary statement: “Bulgaria is a long-term loyal partner under the existing contract, the payments for which are provided in dollars. The non-delivery of the quantities provided for in it puts Gazprom in a position of non-fulfillment of the contract. As all trade and legal relations have been respected, it is obvious that natural gas is currently being used as a political weapon. In view of this, I want to say that while I am a minister, Bulgaria will not negotiate under pressure and with its head bowed and Bulgaria will not give in and will not be sold at any price to any trade counterpart. “
10.30 am, April 27 – Prime Minister Kiril Petkov announced that Deputy Prime Minister Asen Vassilev and Energy Minister Alexander Nikolov are leaving urgently for Brussels due to the emergency situation with the gas cut off by Gazprom. Petkov said he expected a joint EU response to the suspended supplies and had received explicit assurances from EC President Ursula von der Leyen.
12.30 pm, April 28 – Deputy Prime Minister Asen Vassilev from Brussels: “We have never left the contract with Gazprom, they stopped implementing the contract unilaterally. The EC issued an opinion that the payment in rubles is a violation of sanctions. We received strong support, in the next 2 weeks a coordination center for distribution of gas and electricity for Southeast Europe and Italy will be located in Bulgaria, we asked for our infrastructure to be used for Europe and the region.
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