After we wrote the different day that Bulgartransgaz known as on gas merchants to declare how a lot Russian gas they traded in October, as a result of in any other case all gas volumes shall be thought-about Russian, it took one other essential step. We know that on November 5, i.e. Sunday, the Bulgarian firm already despatched the invoices for 20 leva per megawatt hour to the gas merchants for many who didn’t make a press release. This is a big step, since this fashion Bulgartransgaz has an obligation to pay VAT to the Bulgarian tax workplace, and the gas merchants have an obligation to pay to the Bulgarian transit firm.
We perceive that gas merchants should pay the price on the bill to Bulgartransgaz inside 5 working days. Strictly talking, this expires on Friday tenth November, with minimal goodwill on Monday thirteenth November. Thus, if cost will not be made by the latter date, in accordance to the enterprise rules, Bulgartransgaz might refuse to nominate the gas to the merchants from the following day on the foundation of non-payment, and in the meantime it could begin calling the merchants’ financial institution ensures.
In Hungarian: if Gazprom doesn’t pay the invoice by November 13, Bulgartransgaz can block the success of its gas supply schedule from the subsequent day.
This would apparently make it not possible to fulfill the Hungarian-Russian long-term gas buy contract from the south, however as now we have already outlined: there’s a ready detour answer, which Gazprom will most likely take, in order that Hungary will proceed to ship the Russian molecules by means of the Turkish Stream in the direction of.
The essence of this detour answer is that there are framework agreements between Gazprom and the Turkish Botas and the Azeri state gas firms Socar for the buying and selling of Russian gas molecules, and as a mirrored image of those, the Hungarian MVM CEEnergy has additionally concluded its personal framework agreements with the Turkish and Azeri firms. So, if Gazprom is confronted with Bulgartransgaz refusing to nominate it by means of the Bulgarian transmission system, it might use these framework contracts and with the assist of those, you may ship Turkish and Azeri molecules on paper, however in actuality Russian molecules by means of the Turkish Stream to Hungary. According to our supply, it will likely be tough for Bulgartransgaz to enter into these bypass framework agreements, and the low annual supply volumes included can simply be elevated by fast contract amendments.
So, if we actually proceed in accordance to the above situation in the coming weeks, then Gazprom’s gas shipments to Hungary by means of the Turkish Stream might formally stop, however due to the framework agreements, in observe it’s possible that the deliveries might proceed. From this level on, the huge query shall be, on the one hand, whether or not Botas and Socar are prepared to take this detour answer (will they situation a assure of origin to the Bulgarians that they don’t seem to be truly transporting Russian gas, when the truth is they’re), and on the different hand, how lengthy will they tolerate this the complete of Bulgartransgaz, will it settle for this case (it can not accumulate the 20 leva price, although Russian molecules move by means of its transport system). Thirdly, there’s additionally the query of whether or not there shall be some new regulatory or different steps that may truly block the arrival of Russian gas molecules to the territory of the EU through this route. Finally, there’s additionally an enormous query as to what the European Commission will do about Bulgaria’s unilateral customs motion, whether or not it is going to, for instance, launch an infringement process.
Another essential step of Bulgartransgaz, though it doesn’t straight have an effect on Hungary, will not be solely in the direction of Gazprom, however in the case of gas arriving through the Greek-Bulgarian border, he additionally despatched out invoices for 20 leva per megawatt hour to merchants, who didn’t declare that they have been transporting Russian gas on that route. This can be a really highly effective step, and it sends the message that the Bulgarian transit firm may be very dedicated to taking motion in opposition to Russian gas, though it’s not typical to transport Russian gas molecules through that route.
In current weeks, we centered on the 20 levás power contribution voted by the Bulgarian parliament and to be collected by Bulgartransgaz, as a result of it considerably impacts the success by Gazprom of the long-term Hungarian-Russian gas buy contract:
Cover picture credit score: Oliver Bunic/Bloomberg through Getty Images