Price of natural gas imported from Russia to rise by 10-15%

• Quota of imported gas consumed by households expected to rise to 30%

Gas imported from the Russian Federation will have a share of up to 30% of the household gas consumption in Q1 2010, according to data supplied by the ANRE (the energy market regulator). Since industrial consumers are only allowed to buy domestically produced natural gas, households will be consuming gas imported from Russia, since the domestic output can not fully cover the existing demand. ANRE officials added starting on January 1st, the price of imported gas will rise by around USD 30-40/1,000 cubic meters, to around USD 330 / 1,000 cubic meters. This obviously means gas bills will be bigger next year.

Even though the rise in prices is imminent, Petre Lificiu, the chairman of the ANRE, said: "Even though the share of important gas will increase, we have enough levers at our disposal to keep the price of natural gas steady, even though this could displease some of our domestic gas providers. The price of natural gas does not include just the purchase price, but also the cost of production, transport, distribution and storage. What"s more, industrial consumers which have the right to consume natural gas produced domestically until October 2010, have certain gas consumption caps put in place. The ANRE will review the imports quota every month and there are mechanisms which allow us to cap demand, without affecting the operations of other economic agents".

• Half of the domestic gas output could go to major consumers

The experts of the Department of Natural Gas of the ANRE said that, it is ultimately possible that the behavior of interruptible consumers, (major consumers whose activity can be interrupted at any time in order to ensure the gas supply of the population and who may now buy only gas produced domestically) to increase to a level of up to 500 million cubic meters/month. Given the domestic output of 1 billion cubic meters/month and the fact that 450-500 million cubic meters are being extracted from the underground stores, this means interruptible consumers account for half of the domestically produced gas being consumed.

The remaining 1.8-2 billion cubic meters, that are consumed on average during winter, will have to be covered using imported gas.

• In order to keep prices steady, ANRE will cap consumption of domestically produced gas by industrial consumers

The management of the ANRE says that it has emergency solutions in order to keep the regulated price of natural gas steady. The authority will limit the number of interruptible consumers, by only accepting this status for consumers of natural gas included in the Action plan for emergency situations (ed. note: large consumers). What"s more, exclusively consuming domestically produced gas will only be allowed to the extent of interruptible transport capacities. Furthermore, these consumers will also be required to consume stored domestically produced gas (far more expensive than the gas from the current output).

By the end of December, ANRE will be forced to announce the new price of natural gas for 2010.