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EC fines BEH Group €77 million for blocking access to key natural gas infrastructure in Bulgaria

Staff Writer |
The European Commission has fined Bulgarian Energy Holding (BEH), its gas supply subsidiary Bulgargaz and its gas infrastructure subsidiary Bulgartransgaz (the BEH group) €77 068 000 for blocking competitors' access to key gas infrastructure in Bulgaria, in breach of EU antitrust rules.

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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 decision taken today 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 BEH and its subsidiaries, abused their dominant positions by foreclosing entry into the gas supply markets in Bulgaria by unduly restricting access to the infrastructure it 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 the following gas infrastructure:

- the domestic Bulgarian 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 Commission concluded that this behaviour by the BEH group is in breach of Article 102 of the Treaty on the Functioning of the European Union (TFEU), which prohibits the abuse of a dominant market position. As a result, the Commission decided to impose a fine on the company.

Today'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 Commission has the objective of improving competition and the level of security of supply in Southeast European gas markets, including in Bulgaria.

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.

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