VZCZCXRO2688
OO RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSL RUEHSR
DE RUEHSF #0716/01 3561147
ZNY CCCCC ZZH
O 221147Z DEC 09
FM AMEMBASSY SOFIA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6553
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEAIIA/CIA WASHINGTON DC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 SOFIA 000716
SIPDIS
DEPARTMENT FOR SPE MORNINGSTAR, DOE FOR ELKIND,CUTLER,
EKIMOFF
E.O. 12958: DECL: 12/20/2019
TAGS: ENRG PREL PGOV ECON BU
SUBJECT: BULGARIA: WHAT IF THE GAS IS CUT AGAIN?
Classified By: CDA Susan Sutton for reasons 1.4 (b) and (d).
1. (C) If a Russia-Ukraine dispute results in a 2010 gas
cut-off similar to one experienced in January 2009, Bulgaria
will be better prepared. Gas storage supplies are full,
agreements with Greece and Turkey to reverse gas flows have
been established, and district heating plants are prepared to
make a quick switch to mazut, if necessary. While all of
these arrangements are in place, they are complicated and
untested. We believe, under the best case scenario, Bulgaria
will be able to meet 80 percent of the country's demand for
two weeks, after which the government will likely be able to
cover half of the country's demand for an extended period.
End Summary.
Background
----------
2. (SBU) Bulgaria is dependent on Russia for approximately 92
percent of its gas consumption totaling import of about 3.65
billion cubic meters (bcm) annually (or 10-12 mcm/day). In
2008, domestic production accounted for less than eight per
cent of Bulgaria's gas consumption with a total extraction of
217.5 million cubic meters (mcm). The majority of this gas
was from the now depleted Galatta Field in the Black Sea
shale area. In 2009 Galatta extraction was discontinued.
Approximately 90 percent of imported gas is consumed by
industrial users, including heating utilities. Out of the
estimated total consumption of 3.35 bcm per year, 2.21 bcm
(66 percent) is used by industry, 1.01 bcm (30 percent) for
electricity and heating, 0.08 bcm (2.5 percent) by the
service sector, and 0.05 bcm (1.5 percent) by households.
About 47.5 percent of Bulgaria's heating needs come through
the district heating plants running on gas. As January 2009
showed, a gas cut-off would greatly impact Bulgaria's heat
production capabilities, with approximately three million
residents needing alternative sources of heat for household
needs. The chemical and metallurgical industries would also
be hit hard from a gas cut-off.
What if the Gas is Cut Again?
-----------------------------
3. (C) The January 2009 gas cut off spurred the GOB to pursue
alternative sources of gas supplies and draw up emergency
operational measures for future crises. Over the past year
Bulgaria actively pursued gas pipeline interconnectors with
Greece and Romania, and will receive EU funds to implement
these medium-term projects. The Bulgarian government has
also courted Caspian and Central Asian gas producers to fill
interconnectors (including a possible additional
interconnector with Turkey) and to source possible CNG
shuttles over the Black Sea. It is also expanding domestic
storage capacity. All of these projects are many years from
realization.
4. (C) To meet the immediate requirements of a January 2010
gas cut-off, the government has filled the Chiren storage
facility to its maximum capacity of 1.4 billion cubic meters,
(700 million cubic meters of operational gas and the
remaining as a buffer volume.) The maximum withdrawal rates
are 4.2 mcm per day for the first twenty days, 4.0 mcm per
day for the next fifteen days, and subsequently decreasing
volumes for the next seven months. However, the aging
delivery and withdrawal systems have not been subjected to
extended periods of operation at high volumes with reducing
pressures. Therefore, a sustained supply at a constant
volume of four mcm is questionable. If gas supplies from
Chiren are needed, priority will be given to industrial users
such as glass plants, greenhouses, poultry farms, and heating
utilities.
5. (C) Bulgaria will also be able to reverse the gas flow
from Greece, something the Bulgarian and Greek sides worked
out in the last days of the January 2009 gas crisis. The
technical process will take about five to six hours to switch
the flow, but due to the time required to pump the residual
gas in the pipeline, it will probably take two to three days
to realize adequate supply volume. Bulgaria has an agreement
with the Greek company DEPA for supply of 2.5 to 3 million
cubic meters per day. The source of this gas is LNG from the
Revitoussa LNG Terminal in Northern Greece and can be
supplied for an extended period of time. The reversal of the
gas flow from Turkey is more complicated, requiring
SOFIA 00000716 002 OF 002
replacement of a check valve to facilitate reversing the
flow, and could take five to seven days for the gas supplies
to begin. Through an agreement with BOTAS, Bulgaria can
receive 2.5 to 3 million cubic meters of gas per day,
supplied from Marmora LNG Terminal. These volumes are
questionable due to the lack of a metering station and
reliance on less accurate, traditional volumetric
measurements. Bulgaria is not guaranteed the total available
reverse capacity and our best estimate is that it could
receive no more than two mcm per day combined from Greece and
Turkey.
Switching to Mazut and Electricity
----------------------------------
6. (C) In the event of a new gas crisis, Bulgarian central
heating plants will switch over to mazut. Due to a lack of
logistical and operational readiness in January 2009, the
heating plants and industrial facilities took three to five
days or longer to make the switch. Now the Ministry of
Economy and Energy states that all state-owned industrial and
heating utilities are prepared for a quick switch (taking
about a day), if needed. Some of the large utilities have
stocked mazut volumes three times the size required by the
state (one week's supply.) Heating plants and industrial
facilities such as the Sofia Central Heating facility can
operate at full capacity using mazut, although there are some
facilities that will need to reduce capacity. One such
facility is the Plovdiv heating plant, which supplies heat to
over 400,000 residents. Also, the heating plants can not
operate for an extended period of time on mazut due to EU
emission restrictions.
7. (C) Electricity can also be used as source for household
heating and some limited industrial applications in case of
another gas cut off. However, this will place additional
burden on an already deteriorating and aging distribution
network that is in need of major upgrades. The networks in
Sofia, other large cities, and the national grid have not
been upgraded for decades and will not be capable of carrying
substantially increased loads. In addition, the majority of
old buildings in big cities can only handle constant, low
voltage supply. Numerous daily operational outages were
reported in January 2009 due to overloads of the system.
8. (C) Comment: Bulgaria has taken operational measures
that will enable the country to deal better with any gas
crisis compared to the January 2009 cut off. Bulgaria's
efforts still don't meet EU standards for preparedness, but
the new Borissov government, which is pursing a less cozy
relationship with Moscow than its predecessor, won't be
caught as unprepared as the last government. Considerable
work remains, especially on upgrading gas storage facilities
and ensuring that regional interconnectors become reality.
End Comment.
SUTTON