Rosen Hristov: We agreed on the delivery of one LNG tanker from the Chenier company

Two-thirds of the required gas for October has been secured, the remaining amount will be sought as pipeline gas supplies

Energy / Bulgaria
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Source: Ministry of Energy

The Ministry of Energy has managed to secure one liquefied natural gas (LNG) tanker out of the three offered by the Cheniere company. This amount, together with the Azeri gas that Bulgaria receives, will be enough to provide two-thirds of the blue fuel for the month of October. Opportunities are being sought for November and December. From Monday, a team of experts from the ministry began negotiations with Azerbaijan to secure additional quantities. There are also proposals for the supply of blue fuel from Turkish companies. This became clear from the words of the Acting Minister of Energy Rosen Hristov to journalists.

"We managed to negotiate a slot to unload one LNG tanker to Turkey and accepted Chenier's offer to deliver a ship in October. For November and December, we could not find slots that were priced to make supply economically viable. Therefore, Chenier adjusted the offer for the delivery of one tanker in the month of October under the same conditions.

Delivery will be to Turkey, as the previous two Cheniere tankers have been. The negotiations to find slots were extremely difficult, the minister pointed out and expressed gratitude to both his colleagues from Turkey, including Deputy Minister Bayraktar, and the Cheniere company, which kept the conditions for the delivery of one tanker.

In this way, we secure a large portion of the October quantity at a competitive price relative to market conditions. We continue the work to ensure a sufficient amount of gas, and from now on we will focus our efforts on signing medium-term contracts so as to ensure systematic supplies of piped gas at competitive prices," said Minister Hristov.

"At the moment, the quantities do not bother us so much. We have offers for the supply of gas. What worries us is the price and the tendency of the market to systematically increase (prices). That is, we are currently receiving the gas for over BGN 300 per MWh, said the minister Later, he specified that the price is between BGN 300-400 per MWh. "The price is competitive with the market price", he was categorical. In addition, Hristov specified that the price of the delivery of the LNG tanker from Cheniere was more competitive from the tender for blue fuel from "Bulgargaz" in October.

As the energy minister specified, "this price is the limit for most companies in the industry, and above this price we will cause inflation, which will be difficult for some companies to bear." As for the quantity of the agreed tanker, it will be enough to cover the needs for a period of about 10 days.

In his words, "therefore, from now on, the focus is on the search for lower price options for supply and system supplies of piped gas."

This LNG tanker, as specified by Rosen Hristov, is not enough, it will satisfy only one third of the needs for October. Azeri deliveries are another third. "We still have to negotiate another third for the needs in October and November and December, respectively," he pointed out. In response to a question, the minister specified that if you offered two other tankers from the "Cheniere" company, "we cannot accept them, as there are no available slots. Those that are available, at the price of the slot including the costs of unloading, regasification and transit are for double-digit (prices), in millions of euros. This makes the price of gas supplied to Bulgaria uncompetitive," he commented.

Therefore, our country will look for the possibility of supplying pipeline gas, both from Azerbaijan and from Turkish companies, "which are also ready to supply pipeline gas", said Minister Hristov.

According to him, there is indeed talk of supplying gas "tanker by tanker" to ensure the necessary amount for September and October, but in the future it will be switched to the possibility of providing medium-term supplies, so that such actions are not required in future. In particular, it is a matter of providing the necessary volumes not only for the heating season, but also subsequently for at least one year.

"What we will do specifically for the LNG sector is to participate only in the auctions that Revitusa plans to announce at the end of August - the beginning of September for slots for 2023. If we are able to buy slots at a competitive price, we will accordingly also negotiate the supply of LNG tankers. At the moment, there are enough offers for the supply of LNG tankers. That is, there is a supply. The problem is the price, the availability of slots and, accordingly, their price," commented Hristov. In this regard, he specified that when slots are provided, there will be no problem with the supply of liquefied natural gas.

However, the preference is for piped gas supply, which is lower in cost and supplies are more manageable.



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