site.btaUPDATED Greece-Bulgaria Gas Interconnector May Still Be Inoperative in October - Bulgargaz CEO

Greece-Bulgaria Gas Interconnector May Still Be Inoperative in October - Bulgargaz CEO
Greece-Bulgaria Gas Interconnector May Still Be Inoperative in October - Bulgargaz CEO
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The Executive Director of Bulgaria's public natural gas supplier Bulgargaz, Lyudmil Yotsov, warned on Tuesday that it is still unclear whether the Greece-Bulgaria gas interconnector will go into operation in October. "Nobody can promise us that," Yotsov said, speaking during an open meeting of the Energy and Water Regulatory Commission (EWRC) at which Bulgargaz's gas price proposal for August was discussed.

The Bulgargaz CEO said that even if the interconnector is ready on October 1, SOCAR, the state oil and gas company of Azerbaijan, has said that they need time for double-checking, which means that they can decide to start delivering Azeri gas over the interconnector from November 1.

Bulgargaz has asked the EWRC to approve a selling price for natural gas in August at BGN 297.89/MWh (EUR 152.31 exclusive of excise duty and VAT), up by 60.01% from July's price of BGN 186.17/MWh, the company said on its website.

By comparison, the August gas price on the European markets exceeds EUR 171/MWh.

The regulator will decide whether it approves the proposed price or not on August 12.

EWRC Chief: Bulgargaz should have secured alternative supplies after Gazprom cutoff

During the discussion, EWRC Chair Ivan Ivanov criticized the public gas supplier for failing to act to secure alternative gas supplies right after Gazprom cut off deliveries to Bulgaria in April and invite competitive bids for gas supplies for April and May. 

The Bulgargaz CEO said that they did not take anticipatory action because they did not expect Gazprom to suspend supplies after Bulgaria had paid up duly according to the effective contract.

As for the gas supply tender, it was announced on a Greek hub because Greece and Romania were the only alternative to the Russian gas at that time.

Yotsov said that LNG supplies have been secured for September and was optimistic that the necessary quantities for October, November and December 2022 will be secured.

Ivanov also reprimanded the public supplier's Executive Director for failing to submit their price proposal in due course and giving the regulator too little time to make a decision.

Yotsov said that the price proposal for September will be submitted by August 11, but it will be based solely on the quantities of gas from Azerbaijan because only those have been contracted.

He said that all gas other than the quantities under the deal with Azerbaijan will be contracted after August 10.

Only part of the gas for September has been secured, he also said, adding that it is hard to secure regular supplies, the biggest problem being the unavailability of infrastructure for LNG regasification.

Yotsov also said: " Although the price of Azeri gas is now higher [than the price at which gas from Gazprom would have been paid], it is still below the market [spot] price. If, however, any volumes in excess of the agreed 1 billion cu m per year are ordered, the price will not be what it is now. Talks in principle are underway on increasing Azeri gas supplies to Bulgaria. The problem is that all other countries are currently negotiating with Azerbaijan, and they have made it clear that the gas will go to the highest bidder. Therefore, we cannot rely on additional quantities at a better price."

The Bulgargaz CEO also said that Turkey is very important for the security of supplies in the region because it has the necessary infrastructure, and that Greece does not have this infrastructure at the moment.

The public supplier is in talks on long-term LNG supplies with a US producer, but it lacks sufficient capacity at the moment and a long-term contract for the next 15-20 years cannot be signed with it before 2027, Yotsov said.

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By 08:00 on 27.09.2022 Today`s news

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