Gas prices rise in Bulgaria due to delay in IGB's launch

The Bulgarian Energy and Water Regulatory Commission (EWRC) has approved the natural gas price at 45.27 Bulgarian leva (BGN) or about $28.21 per MWh from June 1, 2021, Report informs via Bulgarian media.

The new price, excluding connection fees, transmission fees, excise duty, and VAT, is 20% higher than the level as of May 1 (37.71 leva or $23.5).

The commission clarified that the new increase in gas prices would not affect heating and electricity prices in June.

The EWRC lists three factors that drive up the natural gas prices:

- the continuing rise in prices in international gas markets;

- Bulgargaz was obliged to purchase the required amount of gas at spot prices from other suppliers since the Turkish Stream gas pipeline is being repaired in Turkey in June;

- smaller volumes of gas from Azerbaijan enter Bulgaria via the Greece-Bulgaria interconnector (IGB), the commissioning of which is postponed until mid-2022.

The IGB is intended for export to Bulgaria of natural gas produced within the full-field development of Shah Deniz gas-condensate field or Shah Deniz Stage 2 (SD2) in the Azerbaijani sector of the Caspian Sea. The interconnector will be linked to the TAP. Through IGB, Bulgaria will receive 1 billion cubic meters of Azerbaijani gas per year.

State-owned Bulgargaz EAD signed a contract with the Shah Deniz consortium to purchase 1 billion cubic meters of gas from the Shah Deniz-2 field. Azerbaijani gas will cover 25-30% of Bulgaria's natural gas needs. The length of the interconnector is 182 km, of which 150 km runs through the Bulgarian territory. The annual capacity of the interconnector is about 3-5 billion cubic meters.