EC Fines Bulgarian Energy Holding Group EUR 77 Mln for Blocking Access to Key Natural Gas Infrastructure

EC Fines Bulgarian Energy Holding Group EUR 77 Mln for Blocking Access to Key Natural Gas Infrastructure

December 17 (BTA Correspondent Nikolay Jeliazkov) -
The European Commission (EC) Monday said that it has fined the
Bulgarian Energy Holding, its gas supply subsidiary Bulgargaz
and its gas infrastructure subsidiary Bulgartransgaz (the BEH
group) 77,068,000 euro for blocking competitors' access to key
gas infrastructure in Bulgaria, in breach of EU antitrust rules.
The EC press release quotes European Commissioner for
Competition Margrethe Vestager as saying on Monday that
consumers in all Member States should enjoy the benefits of an
integrated and competitive single European energy market. "For
years, Bulgarian natural gas consumers have been denied a choice
 of suppliers because the BEH group refused to give access to
its gas infrastructure to other wholesale gas suppliers. With
today's decision, we will promote the development of an open and
 competitive energy market to the benefit of consumers in
Bulgaria, in line with Energy Union objectives," she said.

BEH is the vertically integrated incumbent state-owned energy
company in Bulgaria. One subsidiary, Bulgartransagaz, controls
the gas infrastructure in Bulgaria. Another subsidiary,
Bulgargaz, supplies gas to customers in Bulgaria, the press
release reads.

Monday's decision of the EC finds that the BEH group holds
dominant positions both in the gas infrastructure markets and in
 the gas supply markets in Bulgaria. It also finds that the
Bulgarian Energy Holding and its subsidiaries abused their
dominant positions by foreclosing entry into the gas supply
markets in Bulgaria by unduly restricting access to the
infrastructure BEH owned and operated. BEH used the dominant
position of one subsidiary, Bulgartransgaz, to protect the near
monopolistic position of its other subsidiary, Bulgargaz, on
supplying gas. In addition, Bulgargaz hoarded capacity on the
only import pipeline bringing gas through Romania to Bulgaria so
 that it could not be used by potential competitors.

Between 2010 and 2015, the BEH group blocked the access to
Bulgaria's domestic gas transmission network, the only gas
storage facility in Bulgaria, and the only import pipeline
bringing gas into Bulgaria, which was fully booked by BEH.
Without access to this essential infrastructure, it was
impossible for potential competitors to enter wholesale gas
supply markets in Bulgaria. This prevented any development of
competition and ensured a near monopoly for Bulgargaz.

The EC concluded that this behaviour by the BEH group is in
breach of Article 102 of the Treaty on the Functioning of the
European Union, which prohibits the abuse of a dominant market
position. As a result, the EC decided to impose a fine on the

BEH, Bulgargaz and Bulgartransgaz are jointly and severally
liable for the payment of the fine, the level of which was
determined on the basis of the EC's 2006 Guidelines on Fines and
 by taking into account the company's relevant sales in
Bulgaria, the serious nature of the infringement and its

Monday's decision is another example of how enforcement of EU
competition rules complements legislative action to ensure open
and competitive gas markets in the EU, in line with the Energy
Union objectives. In particular, the EC has the objective of
improving competition and the level of security of supply in
Southeast European gas markets, including in Bulgaria, the press
 release reads.
According to the EC, the removal of barriers to entry for
competitors will allow the Bulgarian wholesale gas market to
function more efficiently, with more buyers and sellers, and
give Bulgarian consumers better prices and a choice of gas
suppliers. This will be further facilitated by the recent
opening of the Greece-Bulgaria gas interconnector, for which the
 EC approved public support on November 8, 2018, and by the
Bulgaria-Romania-Hungary-Austria energy cooperation project,
which will enable Bulgarian wholesalers to diversify their
supply sources.

The EC opened a formal investigation into BEH group's behaviour
on July 4, 2013, following an inspection carried out at BEH
group's premises in September 2011.

Source: Brussels