Bulgaria Switches Russian Imports to the South

State gas importer Bulgargaz will receive Russian gas at a new delivery point as of January 1, following the signing of an agreement with Gazprom Export December 30, it said December 31. 

The signing of the amendment changes the delivery point from the border with Romania to the border with Turkey, saving transit fees through Romania,. There are additional gains from lower tariffs payable to the unbundled state transporter Bulgartransgaz. The financial benefits of changing the point of delivery are estimated at about lev 81 ($46)mn, Bulgargaz said, of which lev 4.6mn are from the lower tariff. As a result, Bulgarian consumers will see a drop in their prices this quarter.

The follows "long and in-depth expertise in the company. A series of negotiations were conducted and extensive financial and legal analyses were carried out," it said.

Bulgargaz continues negotiations with Gazprom Export on reducing prices, with the Bulgarian side insisting that the delivery price for the Bulgarian consumer reflect the development of liquid continental gas hub prices and the current border prices for Germany/France/Italy. The interest of both parties implies that the negotiations will be finalised as soon as possible in early 2020, it said.

Hub operator Balkan Gas Hub said in December that spot trading on its electronic platform would start January 2. It will the platform for selling Bulgargaz' release gas as well as for bilateral gas trading generally.

Gazprom's twin TurkStream pipelines each of 15.75bn m³/yr were due to start up in late December, but officially at least one, which carries gas for the Turkish market only, will open January 8. They are part of Gazprom's plans to minimise the number of transit countries for European gas buyers, taking gas under the Black Sea from southern Russia. Bulgargaz has not commented on its readiness for gas from TurkStream 2, which is to carry gas from the Turkey through Bulgaria and into Serbia and Hungary.