Bulgaria’s Bulgargaz Sees Profit Growth as Sales Rise and Losses Shrink

In the first quarter of 2025, the state-owned company Bulgargaz reported a significant reduction in financial losses linked to its contract with the Turkish gas firm Botas and, notably, posted a profit from natural gas sales, according to a BGNES report.

Shrinking Losses and Contract Costs

Bulgargaz’s losses for the first three months of 2025 totaled 32.443 million leva, a substantial improvement compared to the 100.896 million leva loss recorded in the same period last year. The company attributes most of these losses to the costs associated with unused capacity under its agreement with Botas, which amounted to 46.547 million leva. Additionally, financial expenses related to accrued interest on loans contributed 13.538 million leva to the losses.

This contract with Botas was signed on January 3, 2023, by the caretaker government led by Prime Minister Gulb Donev, appointed by President Rumen Radev. The agreement, valid for 13 years, commits Bulgaria to pay approximately 0,000 daily to Turkey for access and transmission fees, regardless of whether gas is supplied.

Growth in Sales and Profitability

In a marked turnaround, Bulgargaz earned a profit of 12.631 million leva from gas sales in the first quarter of 2025, in contrast to a 37.7 million leva loss during the same period in 2024. Gas sales volumes rose by 11.25%, reaching 6,312,917 MWh by the end of March 2025, compared to 5,674,698 MWh the year before.

The company attributes this increase to improved pricing conditions offered after the suspension of Russian gas transit through Ukraine, alongside a colder winter that boosted consumption.

Gas Sourcing and Market Segments

Bulgargaz’s gas purchases as of March 31 included 2,226,758 MWh of piped natural gas, 2,976,253 MWh of liquefied natural gas (LNG), 38,685 MWh bought at a virtual trading point, and 62,537 MWh acquired through balancing contracts.

The main buyers of this gas remain energy sector enterprises and distribution companies supplying end users. However, there was a sharp decline in sales within the metallurgy sector - almost 59% less than the previous year’s first quarter - and a 28.25% decrease in the “Glass and Porcelain” industry. Conversely, exchange sales surged by over 70%.

Bulgargaz also slightly expanded its market share, reaching 67.76% by the end of March.

Storage and Supply Security

To maintain a secure and continuous gas supply, Bulgargaz relies on the “Chiren” underground gas storage facility, managed by Bulgartransgaz. Injected quantities into storage grew by 17,533 MWh compared to the same timeframe in 2024, totaling 12,467 MWh.

Despite this, the total volume of gas stored in Chiren as of March 31 fell by 16.24%, down to 1,689,901 MWh compared to the previous year.

Market Trends and Outlook

The natural gas market in 2025 continues to mirror a trend initiated in 2022, with an increasing share of LNG supplies compensating for reduced pipeline deliveries from Russia to Europe. High prices on European gas markets this year are driven by faster depletion of storage, reliance on alternative LNG sources, and a colder winter season.

In summary, Bulgargaz’s first-quarter results indicate a positive shift with reduced losses and a return to profitability amid evolving supply dynamics and ongoing contractual challenges.

Source: BGNES