The state natural gas utility Bulgargaz is negotiating with the country’s largest retail gas distributor Overgaz for setting up a joint company. The state utility will hold a majority stake in the new entity. Bulgargaz has to receive permission from the government and a licence for gas distribution from the state energy commission. Gas distributors plan to invest more than BGN 107mn (EUR 55mn) in network construction this year. Citigas has earmarked about BGN 50mn, followed by Overgaz with BGN 31.6mn. Three months ago, Bulgargaz signed memorandum with the Austrian energy company OMV for natural gas exploration in the Black Sea and for expanding the natural gas market. It is holding negotiations with UK ’s Melrose , which has acquired research and exploration licences for five offshore zones covering around 10,000 square metres.