EWRC: Bulgaria cuts gas price by 11% after long-term deal with Azerbaijan

Bulgaria's utility regulator approved an 11.3 per cent reduction in the country's regulated gas price in January to 77.6 leva per MWh, excluding transport costs, excise and value-added tax, Caliber.Az citing Bulgarian media.

The decision to lower the price was taken after a two-month increase due to price trends in international gas markets.

The Energy and Water Regulatory Commission (EWRC) said that the key role in the price reduction was played by the long-term gas contract with Azerbaijan, which is linked to oil prices on international markets, rather than to prices at gas hubs.

With Azeri gas accounting for 40.3 per cent of Bulgaria's monthly blue fuel consumption, the EWRC said it remained a positive factor in "achieving favourable prices".

The rest of the gas for domestic consumption was supplied by state gas company Bulgargaz under a liquefied natural gas (LNG) contract, as well as gas pumped from the country's gas storage facility in Chiren, the regulator said.

It should be noted that Azerbaijani gas supplies to Bulgaria in 2023 are expected to be about 1 billion cubic metres. Gas supplies to Bulgaria via the Greece-Bulgaria interconnector (IGB) started two years ago. In 2021, 270 million cubic metres were delivered. In 2022, deliveries totalled just over 500 million cubic metres.

Azerbaijan currently supplies gas in Europe to Italy, Bulgaria, Greece, Romania, Romania and Hungary. In 2024, the gas will flow to Serbia. In addition, several other countries in Europe have expressed interest in buying Azerbaijani gas.

IGB is connected to the Trans Adriatic Pipeline in Greece and primarily supplies Azerbaijani gas from the Shah Deniz field in the Caspian Sea to Bulgaria. In subsequent stages, after expansion, Azerbaijani gas can be transported to other Eastern European countries through the pipeline. The throughput capacity of the gas pipeline is 3 billion cubic metres, which is planned to be increased to 5 billion cubic metres this year as a result of modernisation.