Bečarević: Unreasonable gas prices have nothing to do with the BiH market, something else is at play here

(Patria) - What is currently happening in the gas sector, what price increases can we expect and why, what is the role of Minister Nermin Džindić (SBB), what happened to the price of gas after switching to the TurkStream pipeline, whose interests are decision-makers in the FBiH defending, is explained in an interview with the News Agency Patria by Almir Bečarević, advisor to the former director of BH Gas and former long-term director of that company.

Can you state with certainty what is happening in the gas sector, not only in BiH, but across Europe?

Bečarević: I can answer this question with 100% certainty. Two things are happening. There has been a dramatic increase in natural gas prices, up to USD 2000 per 1000 Sm3, on gas exchanges, which was primarily caused by speculative reasons. Neither are these reasonable gas prices, nor are they sustainable in the long run. At the same time, these prices have nothing to do with our market, so their impact on the price of gas is nil, I repeat, nil. Our market is burdened by other indicators that influence the price of gas set by Gazprom. 

The first is the switch to TurkStream, and the second is the increase in the price of oil and oil derivatives on the world market. A synergy of two elements has occurred: the increase in gas prices due to the switch to TurkStream and the increase in oil prices on the markets, whose derivatives directly influence the price of gas set by Gazprom. 

So, we have one subjective factor (poor assessment) and one objective factor (increase in oil prices). The underfilling of European gas storage facilities could be one of the reasons for the gas shortage in Europe, but only in the event of an extremely cold winter, when gas prices could explode again, but again, that would have nothing to do with our market unless someone gets the idea to buy gas like that. 

A lot has happened in recent months, the director of BH Gas was replaced, you were his advisor, you warned about all these possible scenarios, from price increases to our complete dependence on Russian gas?

Bečarević: Everything concerning gas since the end of 2020 has been explained in detail to the line minister Džindić and Energoinvest, but in vain. After that, when we saw that we were hitting a wall that deflected everything, we forwarded everything to FUP and further to the prosecutor's office. I personally prepared a complete price analysis from TurkStream and the old supply route (Ukraine), from which the invoiced prices show which is more favorable. 

TurkStream, after announcements that it would be 25% cheaper, has become an energy source that is 100% more expensive. This was written and explained a few months ago, but everything was deflected by a wall. Now there are talks about some exchanges, world powers, global policies, and everything was known a few months ago, people just didn't believe those who knew their job. 

Why did Minister Džindić ignore all the letters from BH Gas, and does the current situation have anything to do with the switch to TurkStream? Can you explain why this is called TurkStream?

Bečarević: TurkStream was created on the ruins of South Stream, and both these projects primarily aim to bypass Ukraine. Gazprom could not realize South Stream, and then Turkey offered itself as the main transit corridor for Russian gas to bypass Ukraine.

As Europe's policy has always been to react with a delay, Bulgaria and Serbia, through fictitious legal proceedings in the implementation of European regulations, completed their sections of the pipeline, and TurkStream was created.

The name itself is linked to the section that goes through Turkey, and now a part of the Turkish section is being called by a new name, Balkan Stream. To put it briefly, it's a Russian transport gas pipeline, Russian gas, and bypassing Ukraine. Full control by Gazprom and only Russian gas through this TurkStream-Balkan Stream pipe.  

Citizens of Zenica are particularly affected by heating problems, why does Zenica have no heating and why doesn't Energoinvest pay for gas transport to BH Gas?

Bečarević: To answer your question, I need an introductory sentence from the line minister Džindić, which summarizes everything I have been writing and saying for almost a year, I quote:

"Regarding gas, we said that we will maintain these prices until the New Year, even though we have a significant increase throughout Europe. One of the four reasons, besides the increase in electricity prices, is the increase in gas prices globally. By the New Year, we will do all the analyses, make projections for January, February, and March, and then we will decide how much the increase will be. But we will still try to keep it modest and reasonable," Džindić said.

First, why the increase in gas prices now when a price reduction of 25% was promised? This "modest and reasonable" looks like this: for the industry that uses natural gas directly from the BH Gas transport system, especially Arcelor Mittal, for the period January 2021 - January 2022, the increase will be almost 100% of the natural gas price. In addition to consuming natural gas in its production facilities, Arcelor Mittal is supposed to use it to supplement the operation of new boilers in the Zenica heating plant. 

The Zenica heating plant should use gases (e.g., coke oven gas) as the primary fuel for its boilers, which are by-products of Mittal's production cycle, and with the addition of natural gas, Zenica should have cleaner air (no coal).

In case of production problems, i.e., problems with coke oven gas, for example, there is no mathematical possibility of using only natural gas to heat hot water. The price of natural gas is now and will be even higher for Mittal, so until the "other gases" are ready, there will be no heating in Zenica. I hope I have explained this as simply as possible so that everyone can understand the essence of the problem, in my opinion. Two months after the dismissal of the director who refused to be obedient, we now have the situation you are asking about. According to my information, this data may not be entirely accurate, Energoinvest pays nothing for gas transport and has no transport contracts. I am providing this only as information, not to interfere in BH Gas's politics, because I have written everything, including this, to FUP, the KS Prosecutor's Office, and the Energy Committee. All of this is the nonsense we find ourselves in, which we explained in detail in the reports to FUP, at least to leave a trace of what even someone with a forged diploma would see. 

Is there any possibility, or rather, what should we do to avoid a huge increase in gas prices, or have we missed the boat?

Bečarević: There is no possibility now to avoid an increase in gas prices. The only place they can reach is the BH Gas "ATM", which will destroy the South Interconnection project, because gas pipelines are built with millions of KM, not with nice stories. What they think they know, but don't, is that even if they go in that direction and "break" millions to help Energoinvest, they will still face an increase in gas prices and, very likely, an invoice from the Hungarian transporter for USD 23 million. Everything should have been different if they had just listened to what was said and written. All the accumulation of price increases by Gazprom will happen in 2022, and now I am supposed to propose something that the "walls" didn't want to listen to. I don't know what drugs one needs to be on (as Svetlana Cenić said) to talk about a "modest and reasonable increase" when the price, for example, for Mittal has already increased and will increase by over 100%. If I also mention that it was known that JPEPBiH would also request an increase in electricity prices, we come to the question of whether there are still ostriches in this country who think that energy will be cheaper in unproductive years, or will we console ourselves with "reasonable and modest"? Should the question be asked why data from gas import invoices, where everything is visible, are not submitted to Parliament?

What hurts and what I will never understand is that the minister does not want to read what is submitted to him but prefers to listen to the stories of dilettantes who have brought us to this situation. And one more thing, the gas system is managed from Serbia because, as happened on 09/24/2021, a gas loan from Serbia and the closing of valves to Toplane Sarajevo saved households from the collapse of the gas system in FBiH. Whoever doesn't believe it, let them look at the consumption balances on those days because computers and meters don't lie.  

Do you think the South Interconnection project is definitively halted?

Bečarević: I no longer "remember" what the South Interconnection is. How to explain that public debates on the law ended on 03/31/2021, and the Law on the South Interconnection was never returned to the FBiH Parliament for final adoption. The draft law was unanimously accepted, and everything stopped because the ministry is weighing whether to use the money collected for expropriation as a gift to Energoinvest to cover part of the difference in gas prices or to take that money into the budget. 

That would be the final nail in the coffin for the project of supply security and diversification of gas sources, and you are left with TurkStream with a pipeline over 40 years old, which can no longer operate at its projected capacities. This is the energy vision that I am supposed to admire and which confuses me, but I ask the minister for those drugs that lead us to "modest and reasonable".

To avoid being misunderstood, I have nothing against the minister, but one should have just read and not believed the people who have now led us to "modest and reasonable".

All my statements have one goal: to verify gas prices by those who understand gas prices, know how to read contracts, know what offering a bribe is, know what playing with pressure means for an old gas pipeline, etc., and not to read stories that no one will sue me for what I have said publicly, and I have never received a single lawsuit, and "modest and reasonable" is coming as we announced almost a year ago.