CAIRO: Minister of Petroleum Sameh Fahmi this week announced plans for energy cooperation between Egypt and Bulgaria.
The announcement comes on the heels of Fahmi’s signing of a memorandum of understanding with Bulgarian Economy and Energy Minister Petar Dimitrov on the sidelines of the Natural Gas for Europe energy summit in Sofia on Saturday.
The conference, which took place over the weekend, was attended by 28 delegations from Europe, and Asian and Mediterranean transit and supply countries.
The summit aimed to address multilateral energy security agreements as well as strategies for dealing with gas supply crises in Europe.
The memorandum signed between Egypt and Bulgaria provides for exploration into possible means of energy cooperation between the two countries.
Under the agreement, Bulgarian companies will be permitted to participate in oil and gas prospecting projects in Egypt, and the two countries will work towards a deal for the sale of gas and liquefied natural gas to Bulgaria.
Currently, Egypt’s quotas for the sale of liquefied natural gas are fixed until 2010, but could be restructured to accommodate sales to Bulgaria until reallocations are made next year.
Bulgaria is currently heavily dependent on Russian energy and is seeking to diversify means of supply through new agreements.
This goal became especially urgent after a price dispute last month with Russia and Ukraine that left Bulgaria and other European countries without gas for two weeks.
The memorandum is extremely important for us because we are urgently seeking alternative gas supplies, said Minister Dimitrov in a statement at the conference.
Currently, Bulgaria receives between 95-98 percent of its gas supply from Russia, with the remainder drawn from its own Black Sea reserves.
Bulgaria signed a similar deal at the beginning of the year with neighboring Romania, as well as one with Greece for the linking of gas networks and a possible terminal for liquefied natural gas on the Aegean Sea. Bulgaria is also currently seeking energy cooperation with Turkey.
While the details of the agreement are still under discussion, Fahmi said that Bulgaria would be given priority over other countries waiting to buy liquefied natural gas and that cooperation would be beneficial to both countries.
Egypt has been actively involved in energy sharing negotiations with Europe in recent months. In December 2008, Egypt and the EU signed the Brussels Memorandum to promote energy market reforms and enhance cooperation across the Mediterranean.
More recently, Egypt has opened discussions with China to discuss bilateral energy cooperation and the possible establishment of a China-Egypt economic zone in the near future.
There are tentative plans for the transport of Egyptian gas to Bulgaria through new or existing terminals in Greece. The sale of Egyptian gas to Bulgaria could begin as early as 2010, and Bulgaria hopes to purchase 1 billion cubic meters of gas per year from Egypt starting in 2011.
