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id: 241152 date: 12/22/2009 11:47 refid: 09SOFIA716 origin: Embassy Sofia classification: CONFIDENTIAL destination: header: 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
