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Redzepi: The tender for public private partnership for the entire territory will speed up the gasification process
Published on: 08/02/2020 NER JSC SKOPJE


Gas as one of the most environmentally friendly fuels simply fails to come in Macedonia. Every new government at the beginning of the mandate announces gasification as one of the priorities for the citizens in the country, for clean environment, cheaper heating…, but somewhere this project constantly comes to a standstill. The current director of National Energy Resources (NER, former MER), Bajram Redzepi is very enthusiastic that gas can be also used in the households in Macedonia.


The public-private partnership tender for gasification operator in Macedonia is expected to be announced next week. When do you finally expect the households in Macedonia to use gas?

-The construction and developent of the distribution network is crucial for natural gas to reach households. I expect that we will have a public-private partnership agreement by this fall, but the private partner will need some time to design and obtain the building approval from the municipalities. In those municipalities where there are projects, maybe by the end of this year, the construction of the distribution network will start and we will have the first connections.


How goes the construction of the main gas pipelines from Negotino to the Greek border and from Skopje to Gostivar?

-The sections Negotino - Bitola and Skopje - Gostivar will be completed by the middle of this year. We expect them to be operational by the end of this year. The interconnection line Negotino - Gevgelija is in the phase of preparation of the environmental impact assessment study and the infrastructure design. The construction of this interconnector is expected to begin by the end of this year and will be financed by WBIF grant and an EIB loan. The construction will be completed by the end of 2022, leading to diversification of our sources of supply and access to a more competitive market.


The gas pipeline Klechovce - Stip has been completed for almost 4-5 years but the pipes are still empty. Why the eastern part of the country is still not using gas, what is the reason?

-The new Energy law prescribes only one natural gas transmission operator, that is, only one license. Now GA-MA is holding that license. On the other hand, the law stipulates that the activities should be separated, which means that the private partner should be exempt from the shares in GA-MA. Until the problem is solved, that is, the merging of NER and GA-MA into one joint stock company that section cannot operate as a natural gas transmission facility.


Will the unresolved GAMA - Makpetrol dispute affect the delay of these processes regarding the country's gasification?


- Absolutely yes. It is a prerequisite for the commissioning of all sections that are completed and those under construction by NER. Otherwise, the energy law will have to be changed. But I am optimistic that this will be resolved without having to change the law.


Why are we so behind with the gasification of the country? Where have we been wrong so far?


-Most of the municipalities gravitating around the current gas transmission pipeline, from Skopje to the Bulgarian border, could have been gasified more than 20 years ago. But the municipal public company model chosen by Kumanovo has proved as insufficiently functional. The reasons are simple. It doesn’t work in a small market and low consumption. This is because the tariff calculation methodology produces extremely high connection and distribution tariffs, which makes the use of natural gas insufficiently economically attractive for the households and the industry. The designing, building, maintainance and development of a distribution system requires a great deal of financial power, experience and educated staff. With the government's decision on public-private partnerships across the country, I think this issue is resolved in the best possible way, as all other preconditions for bringing natural gas to the households and industry have already been created with a far more favorable and more attractive economic conditions.


What would be the prices for a connection in an apartment, a house… a household?


-At the moment, the price for connection is very high, around EUR800, also the price per 1 m3 is not so attractive. This is due to the low consumption, unregulated distribution system, undeveloped transmission system, lack of alternative for supply of natural gas… Fast development of the gas market and fast growth of the consumption comes next, thus the using of gas will become attractive from economic point of view and ecological aspect as well. I expect the price for connection to be nearly ten times cheaper than the one paid currently. All the prerequisites have been created in order to decrease the transmission and distribution tariffs, aslo our interconnection with the Greek Desfa, will definitely allow us to have access to cheaper gas. But in order to increase the number of new connections it will be essential to help the households in adjusting their internal installation for using gas. The government’s plan is with a combined model for subsidizing and providing loans under favourable conditions, to stimulate the fast growth of connections in the households, the industry and the companies. Fast growth of consumption will affect the prices drop.