Bulgargaz will ask for a 32% increase in gas in July

Energy / Bulgaria
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BGN 186.47 per MWh is the price of gas in July, suggests Bulgargaz. The increase compared to the price in June is 32%. This was announced personally by the executive director of the gas company, Lyudmil Yotsov, to the deputies of the temporary commission for verification of the circumstances that led to the suspension of natural gas from OOO "Gazprom Export" and the procedure for selecting alternative suppliers from "Bulgargaz" EAD.

Yotsov announced that the application was submitted to the Commission for Energy and Water Regulation (EWRC) in the afternoon.

In front of the deputies, Yotsov explained that the application was not submitted because "with short-term contracts, everything becomes very complicated with the traders". The company intends to try again in August an auction through "Gazvo Hub Balkan". As for the expected quantities of Azeri gas, Yotsov commented that the situation there will be complicated in October, because of the planned 14-day scheduled maintenance under TAR.

During the meeting, it became clear that the necessary amount for July has been agreed, the volume for the month of August has been partially agreed, and for the following months, for the end of the year, supplies are yet to be sought. The company admitted that the price of the supplied blue fuel is higher.

As for the filling of the gas storage in Chiren, the executive director of "Bulgartransgaz" Vladimir Malinov, for his part, explained that at the moment there are 194 million cubic meters of natural gas pumped in - 35% of the technical capacity of the gas storage.

As Malinov explained, forecasts are currently being made and 2 scenarios will be developed, which will also include proposals for measures.

The injection process should end on October 31. After that, a corresponding technological procedure is provided. "What we foresee is that by November 11, Bulgartransgaz will be ready to start extracting natural gas.

"Based on the contracts we have with clients for distributed injection and storage capacity, they will be implemented in full, and by the end of October, the storage should have about 78-79% of the technical capacity, which is about 400 million cubic m", specified Malinov. From this point of view, he explained that the company is also developing several scenarios. "We also have a pessimistic option, in which Chiren will be 60% full," explained the executive director of Bulgartransgaz.

In response to a question from GERB deputy and former Minister of Energy Temenuzka Petkova, in particular, about the financial situation of "Bulgargaz", it became clear that the company is in profit with BGN 11 million, but also has loans due to the high indebtedness of the district heating companies.

"As of May, since June has not ended, all the documents are missing, the profit is 11 million. Yes, you are right, Bulgargaz has liquidity problems, as the way of gas delivery is simply changing. When negotiating alternative supplies, traders, especially when it comes to LNG supplies, are paid in advance. Yes, Bulgargaz has credits that it has taken at the moment, but also, Bulgargaz has problems with its receivables, and I would say that Bulgargaz's biggest problem is again Sofia Heating. They are the liabilities of BGN 271 million. And "Bulgargaz" must somehow compensate them, and it compensates them through loan agreements. We have both from BEH, which provided us with support, and overdrafts," said the executive director of the company Lyudmil Yotsov.

As for the circumstances of the termination of the contract with "Gazprom", the temporary commission is waiting after repeated clarifications to receive an answer that, in the end, "Bulgargaz" fulfilled the decision of the Deputy Minister of Energy. "Bulgargaz's decision was not made independently. It is based on a decision of the Deputy Minister of Energy, ordering us to take certain actions based on an operational meeting of the Council of Ministers (MC), at which these decisions were made. Attached to the letter is a report from the Minister of Energy to the MoJ. We have not been officially given this decision. We just have a letter telling us what to do," said Ludmil Yotsov. In response to a question from Tsoncho Ganev from "Vazrazhdane" who is the deputy minister, Yotsov answered: "I will lie to you. I think it was Danail Nikolov."

Meanwhile, at the very beginning of the meeting, it became clear that the temporary committee will demand from the Council of Ministers the decision from the operational meeting to clarify how exactly the decision to stop payments to Gazprom was made.

Meanwhile, at the very beginning of the meeting, it became clear that the temporary committee will demand from the Council of Ministers the decision from the operational meeting to clarify how exactly the decision to stop payments to Gazprom was made. However, it was not clear during the hearing whether the White & Case law firm's report regarding the death penalty had been sufficiently analyzed regarding payment in rubles for gas supplies from Gazprom. From Yotsov's words, it became clear that "Analysis of White & Case's opinion under Swiss law" Bulgargaz did not do. He provided the opinion. The recommended behavior of Bulgargaz by the lawyers was to wait, since there are uncertainties, to ask about this method of payment. Second, there was uncertainty as to whether, if Bulgargaz would accept this method of payment, it would not be subject to sanctions. Their proposal was to wait to see if there would be a common position, how things would develop. "Bulgargaz" has complied with it.

Before that, Temenuzka Petkova questioned whether a risk assessment had been made precisely in view of the analysis of "White and Case", "which clearly say that "Bulgargaz" would be in default if it did not fulfill certain conditions related to the payment".

In his answers to questions posed by the deputies, the executive director of "Bulgargaz" confirmed that representatives of the company did not travel to the USA. In response to BSP's question about how and by what procedure the selection of the LNG supplier from the USA was reached, Yotsov explained that the company found them on its own.

"A representative of Bulgargaz did not travel to the USA together with the Prime Minister and the Minister of Energy. Talks with this company, which is one of the major gas producers, have been held before. "Bulgargaz" received an offer from this company without a procedure. He received a direct offer, which he accepted because the offer was very advantageous. The two tankers have come, they are finished. That was for the month of June," Yotsov said.

In response to a clarifying question as to whether this was the only offer received by Bulgargaz and whether there were no other offers and on what basis it was claimed to be the best offer since there were no others, the company's executive director said that “ it's just that the offer is very good."

“An offer has been received from this major manufacturer. We have not sent offers to other traders, because the amount that this company supplies us fully satisfies the needs of "Bulgargaz" to deliver gas to customers and pump gas in Chiren. Yes, we did not ask for offers from the other traders who are on the market, as we did in May, or as we did in July. It's just that the offer was really, really good. I am sure that we cannot get a better one, especially for such large quantities, which fully satisfy the needs of "Bulgargaz" for the month of June.

Later, as part of the answers, it became clear that certain quantities have been agreed upon for August, but from then on - no offers are yet to be made. However, Yotsov noted that "gas may not be available", and Petkova defined this statement as extremely alarming. In addition, it became clear that "Bulgargaz" is suffering losses from reserved and unused capacity for Russian gas supplies.

The executive directors of "Bulgargaz" and "Bulgartransgaz" also got into a dispute about whether the gas infrastructure is sufficient in terms of capacity to transfer the necessary amounts of blue fuel. According to Lyudmil Yotsov, the capacity is insufficient. Exactly the opposite was the opinion of Vladimir Malinov, who also gave specific data on the possibilities of the gas transmission system.

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