Gazprom informs Bulgaria it will halt gas supplies as of April 27

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Model of petrol pump is seen in front of Gazprom logo in this illustration taken March 25, 2022. REUTERS/Dado Ruvic/Illustration

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SOFIA, April 26 (Reuters) - Russia's energy giant Gazprom (GAZP.MM) has informed Bulgarian state gas company Bulgargaz it will halt gas supplies as of Wednesday, the energy ministry said on Tuesday.

The Balkan country, almost completely reliant on Russian gas imports, has taken steps to find alternative arrangements for the supply of natural gas and to deal with the situation, the energy ministry said in a statement.

The EU and NATO member state would be the second country after Poland to have its gas cut off by Europe's main supplier since Moscow started what it calls a "special military operation" in Ukraine on Feb. 24. read more

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Russian President Vladimir Putin has demanded that countries he terms "unfriendly" agree to implement a scheme under which they would open accounts at Gazprombank and make payments for Russian gas imports in euros or dollars that would be converted into roubles.

He had threatened to cut gas supplies in case the demands would not be fully met.

Bulgaria imports over 90% of the gas it needs from Russia via Turk Stream pipeline under a 10-year contract that expires at the end of 2022. Sofia has said it would not hold talks to renew the deal amid Russian invasion of Ukraine. read more

The energy ministry said Bulgaria has fully fulfilled its obligations under the current contract and has made all payments that were required, pointing that the offered new payment scheme was in breach of the arrangement.

"The new two-stage payment procedure proposed by Russia is not in line with the existing contract... and poses significant risks to Bulgaria, including making payments without receiving any gas supplies from the Russian side," the ministry said.

The ministry said for the time being no restrictions in the gas consumption were required and a government spokeswoman said there was no risk for the energy security of the country, but analysts disagreed.

Energy Minister Alexander Nikolov has said Bulgaria has held initial talks and was standing ready to import liquefied natural gas through neighbouring Turkey and Greece and was looking to increase shipments of Azeri gas it receives at present.

With its gas storage facility at about 18% of capacity, the country needs to act quickly to ensure security of gas supplies, despite the end of the heating season that will decrease demand for gas, analysts say.

"Given Bulgaria's excessive dependence on Russian gas, the halting of gas imports poses a serious challenge to the security of supply to the country," said Martin Vladimirov with Sofia-based think-tank Center for the Study of the Democracy.

"A cut to the deliveries to non-essential groups of consumers including the heavy industry cannot be ruled out," he said.

Vladimirov said Sofia should start immediate talks in cooperation with Greece with alternative LNG suppliers such as Qatar, Algeria and the United States to ensure the country's gas needs and negotiate an increase of Azeri gas imports.

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Reporting by Tsvetelia Tsolova; editing by Jonathan Oatis and Marguerita Choy

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