First American Liquefied Gas for Bulgaria

Energy | June 1, 2019, Saturday // 11:41|  views

Bulgaria is starting to consume US liquefied gas, which is a first step towards diversifying supplies and reducing dependence on imports of Russian natural gas only. On Thursday evening, at the Greek LNG Revituse, the first tanker arrived with 90 million cubic meters of raw material for Bulgargaz, the unloading of which will start today,  June 1st. This was announced at a press conference on Friday by Minister of Energy Temenujka Petkova and the bosses of the state-owned companies Bulgargas Nikolay Pavlov and Bulgartransgaz Vladimir Malinov.

The supplier of the raw material is the Dutch company Colmar, which was among the participants in the first auction in Bulgargaz auction for alternatives to Gazprom deliveries of 144 million cubic meters of gas. It was won by the Greek DEPA and it was announced that the prices achieved were lower than those of Russian gas, but it was not stated what they were. The third candidate was the Bulgarian gas supplier "Dexia".

However, Colmar had suggested to Bulgargas to buy other quantities at prices below the DEPA and that was accepted by the gas company. According to Mediapool, such a bid was also made by Dexia, and since the tariffs were more favorable than the gas-oil companies, and the state gas supplier was not obliged to conduct supply tenders, it was decided to use the competitive services.

Now the gas arrivals are for the second quarter, the next "Colmar" will provide another 50 million cubic meters, Minister Temenujka Petkova explained.

"Prices are competitive and lower than those of the current supplier. I think this is a very serious step forward towards the liberalization of the natural gas market in Bulgaria and a very clear sign that the government is working very diversely towards diversification and not only in words, but also in deeds, "she said.

Producer of the already supplied natural is the American Sheenier, which had an interest in reserving capacity from the newly started gas pipeline between Greece and Bulgaria, and was also interested in fueling the future liquefied gas terminal near Alexandroupolis in which a shareholder wants to become "Bulgartransgaz".

Colmar's second delivery will be provided by British Petroleum, Petkova said.

These quantities will be delivered to us through the access point between the Greek and Bulgarian gas network "Kulata - Sidirokastro", whose capacity has been increased since 1 April, explained the head of the gas operator Bulgartransgaz Vladimir Malinov, whose capacity is already 4.4 million cubic meters m hard capacity plus 6 million cubic meters interruptible, which means that the gas transmission networks of both countries provide the possibility to physically reach up to 5 million cubic meters per day physically entering the territory of Greece from the Revitus terminal and to be used for the purposes of the Bulgarian market, Malinov said.

The aim of Bulgargaz is to import the quantities of gas from the various Gazprom vendors and to lower prices at the gas storage facility in Chiren. They will enter into the formation of natural gas prices in the winter when the raw material is traditionally rising. The quantities delivered from the DEPA are already introduced into the gas storage facility.

Colmar, however, has deposited with the Ministry of Energy a request for negotiations and a delivery agreement of 500 million cubic meters for the next 5 years to be traded on the currently established gas exchange. It is expected to start operating on October 1, 2019. The gas exchange is part of the intention to build a center for regional and even European trade in natural gas - the so-called Balkan gas hub. The provision of these quantities is the second step in the implementation of the project after Bulgartransgaz managed to conclude a contract with Gazprom for import of natural gas in Bulgaria for "Turkish stream" to Serbia, but part of it will go to the hub.

Vladimir Malinov said he hopes 500 million cubic meters of "Colmar" to bring good liquidity to the future gas market in Bulgaria.

All this shows that the way the government is going towards diversification, direction of liberalization of the market is correct, and what we have undertaken as a commitment we carry it out, Petkova said.


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