The European energy market continues to transform, with flexible supply models, regional diversification, and projects capable of providing energy to areas beyond the main infrastructure becoming increasingly important. This is particularly relevant for the Balkans, where access to reliable and environmentally friendly fuel sources is directly linked to economic development and the reduction of energy inequality.
Against this backdrop, the Bulgarian company M-Gaz is developing a hybrid gas supply model based on the supply of Azerbaijani gas via a "virtual pipeline." The project demonstrated tangible results in Bulgaria in 2025 and was launched in North Macedonia in December. Plans include entering the Albanian market and further deepening the partnership with the State Oil Company of Azerbaijan (SOCAR).
Gergana Manolova, director of strategic growth and impact at M-Gaz EOOD, told Report about the company's achievements, expansion plans in the Western Balkans, infrastructure investments, and the role of small and medium-sized gas businesses in ensuring Europe's energy security.
Report presents the interview:
- The hybrid gas supply project in Bulgaria demonstrated tangible results already in its first year. Could you summarize the outcomes of 2025: what was the total volume of Azerbaijani gas supplied under this model, and was it possible to maintain a balance between deliveries to the industrial sector and social institutions?
- As M-Gaz celebrates its 20th anniversary on the market this year, the 2025 results stand as a testament to our long-standing commitment to regional energy security. The hybrid gasification model proved its efficacy by the end of December, with M-Gaz having successfully delivered 89 million nm3 of Azerbaijani natural gas to 46 industrial clients and 5 social institutions. We maintained a precise balance by powering major economic drivers in the mining, metallurgy, pharmaceutical, and food processing sectors while simultaneously providing clean energy to community pillars. These social sites included the "St. St. Cyril and Methodius" Primary School in Nikolovo, the "Prolet" kindergarten in Chervena Voda, a regional hospital, and both the "Holy Trinity" Church and the local Mosque in Dve Mogili.
- What supply volume targets is M-Gaz setting for 2026, taking into account the launch of projects in North Macedonia and the potential start in Albania?
- Looking ahead to 2026, M-Gaz has set a supply target of 100 million nm3. This volume is calculated to cover the expanding needs of our social and industrial clients in Bulgaria, as well as our new operations in North Macedonia. Following our successful launch there this past December, these targets reflect our readiness to provide a reliable energy stream as we prepare for further regional growth.
- In December 2025, the project officially launched in Strumica (North Macedonia). How challenging was it to adapt the Bulgarian "hybrid gas supply" model to local regulatory and infrastructure conditions? What lessons were learned?
- The transition into Strumica - cultural, commercial, and political center of the southeastern region of the Republic of North Macedonia - was efficient because the local regulatory framework for compressed natural gas (CNG) aligns closely with the European standards we follow in Bulgaria. We received significant support from local authorities, allowing us to demonstrate the model's immediate environmental benefits. By replacing traditional petroleum products, we have drastically reduced fine dust particles and soot. Environmentally, natural gas is a superior fuel, with CO2 emissions approximately 50% lower than coal and 30% lower than petrol, while virtually eliminating sulfur dioxide and significantly reducing nitrogen oxides.
- You previously mentioned plans to implement this concept in Albania. At what stage are the negotiations with the Albanian side and SOCAR Balkans currently? Is M-Gaz considering other Western Balkan markets, such as Serbia or Montenegro, for further expansion?
- Regarding our expansion into Albania, we have recently initiated a joint technical and commercial evaluation of the project alongside SOCAR Balkans and the relevant entities in Albania. While it is too early to provide more granular details at this stage, our primary target is to commence the supply of gas to Korça by the end of 2026. Furthermore, we are happy to share our expertise and practical solutions with SOCAR to implement hybrid gasification projects in Azerbaijan and Georgia, specifically in the liberated territories or areas with a mountainous landscape. Hybrid gasification can provide significantly more economic solutions in such hard-to-access regions compared to the high costs of developing traditional local gas distribution networks.
- Since hybrid gas supply is based on the use of compressed natural gas (CNG) in regions without pipeline infrastructure, does M-Gaz plan to invest in the construction of new compressor stations or in expanding its own fleet of gas carriers to meet growing demand in neighboring countries?
- To meet the rising demand across borders, M-Gaz is investing in substantial infrastructure upgrades. We have secured a construction permit for a new station in the Ruse region, with construction scheduled to begin in March 2026 and operations starting by year-end. This facility will be equipped with two powerful new compressors designed to satisfy the needs of clients located outside the traditional pipeline network. Furthermore, we are planning the development of another station near Petrich in Southwest Bulgaria. This facility is envisioned as a strategic regional hub that could cover Albania, Northern Greece, and North Macedonia, significantly enhancing our logistical footprint and ensuring we have the capacity to match our expanding market share across the Balkans.
- Do you plan to participate in the Baku Energy Forum in June? What key messages about the role of small and medium-sized gas businesses in ensuring Europe's energy security would you like to convey to the international audience?
- I also plan to participate in the Baku Energy Forum in June to highlight how small and medium-sized gas businesses are essential to Europe's energy security. Our primary message is that SMEs offer a unique combination of deep regulatory expertise and operational flexibility. By partnering with larger energy enterprises, we can implement successful projects more rapidly, acting as the agile link that brings large-scale energy resources to specific, off-grid local markets.
- According to your data, the transition of social facilities to gas has reduced emissions by approximately 30%. Does M-Gaz set specific decarbonization targets within the framework of its partnership with SOCAR and the national governments of the countries where it operates?
- M-Gaz views hybrid gas supply as a direct tool for regional decarbonization. By replacing wood, coal, and diesel with natural gas in social and industrial facilities, we are significantly lowering the carbon footprint of our operating regions. Within our strategic partnership with SOCAR and national governments, we have set a goal to achieve an emission reduction of approximately 20,000 tons of CO2, contributing to cleaner air and a more sustainable energy landscape.
- Do you see potential for integrating renewable energy sources - such as solar solutions for compressor infrastructure or hybrid energy models - into M-Gaz projects in the medium term?
- We are actively integrating renewable energy into our own industrial infrastructure. Our new site in Ruse is designed to consume 100% renewable energy through a combination of solar panels and battery storage. We have also acquired adjacent land at our Ihtiman site specifically to develop renewable energy projects, ensuring that our compressor stations operate with minimal environmental impact in the medium term.
- How do you assess the role of projects like hybrid gas supply in reducing energy inequality between Europe's center and periphery and in strengthening the resilience of regional energy systems?
- The hybrid gas supply model is particularly vital for the Balkan region, where the gas distribution network is often less developed than in Central Europe. Our approach addresses energy inequality by providing a "virtual pipeline" to countries like Bulgaria, Serbia, Montenegro, Albania, Bosnia and Herzegovina, and North Macedonia. By strengthening these regional systems, we ensure that the periphery of Europe has access to the same resilient and cost-effective energy solutions as the center. Ultimately, M-Gaz with their strategic partner SOCAR are not just delivering energy; we are pioneering a more integrated and resilient energy future for the entire Balkan Peninsula.
- You mentioned countries such as Serbia, Montenegro, and Bosnia and Herzegovina, as well as Northern Greece. Could you please let us know whether any negotiations are currently underway regarding the possible expansion of the hybrid gasification project to these countries?
- For those countries, we are or are planning to conduct a feasibility study to check the possibility of applying the model. Currently, our focus is on Albania.