Bulgaria seeks bids for LNG deliveries as gas question looms over election
Bulgaria’s state-owned natural gas company Bulgargaz has asked for offers to supply liquefied natural gas (LNG), seeking to purchase 5.5 million MWh in the fourth quarter of 2022.
The bid deadline is noon (Sofia time) on August 16 and the bids are only required to be valid until 5pm (Sofia time) on August 18.
The quantities sought are 1.5 million MWh in October and 2 million MWh each in November and December, with the LNG terminal at Revithoussa, Greece, indicated as the unloading point.
The call did not set any price intervals, with Bulgargaz saying only that price offers should be referenced to the Dutch TTF benchmark price or the Henry Hub US natural gas futures for the respective months of delivery.
A key provision is that any delivery is contingent on Bulgargaz securing a “regasification and storage slot” at the Revithoussa facility no later than September 20.
Separately, caretaker energy minister Rossen Hristov said on August 11 that the ministry was in talks with a US LNG company for an extension on the deadline to accept or reject the proposed acquisition of three LNG cargoes in the last quarter of the year.
Hristov did not name the company but said that the price offer was “good”, as quoted by Bulgarian National Radio.
Last week, Hristov’s predecessor as energy minister, Alexander Nikolov, said that the now-departed Cabinet of Prime Minister Kiril Petkov signed a framework agreement with US firm Cheniere for seven LNG deliveries – three in the last quarter of 2022, with an option for four more in 2023.
The offer was binding with regards to the price, but Bulgaria had the choice whether to accept or reject the deliveries, Nikolov told private broadcaster Nova Televizia on August 4.
Hristov previously criticised the existing LNG deliveries agreement, saying that the Petkov administration did not secure the necessary regasification slots.
Nikolov appeared to partially contradict that statement, saying that a slot had been obtained for the October delivery. No slots were secured for the November and December cargoes because the Petkov cabinet did not want to tie the hands of the caretaker government, Nikolov said.
In addition to the regasification slots, the delivery of any gas from the LNG cargoes was contingent on finishing the new interconnector pipeline to Greece, Nikolov said.
The existing link to the Greek gas grid can handle the flow of gas from Azerbaijan under the existing one billion cubic metres a year contract, but not any additional amounts from LNG facilities, he said.
Petkov announced the end of construction work on the pipeline in June, but two key permits have to be issued before it can begin operations. Hristov said on August 11 that it was “possible” for the interconnector pipeline to begin operations by early September.
After the cessation of supplies by Russia’s Gazprom in April, the sourcing of natural gas has become one of the major dividing lines in Bulgarian politics.
While in office, Petkov ruled out any revision of the contract terms with Gazprom, despite calls from business groups and within his own coalition government to “negotiate” with the Russian company.
Bulgaria’s caretaker Prime Minister Gulub Donev has criticised the “chaos and annihilation” in the energy sector, which he blamed on his predecessor in office.
This sparked concerns that the caretaker cabinet, appointed by President Roumen Radev, was preparing the ground for a new deal with Gazprom. Several protests against such a potential deal have been held in Sofia since the Donev government took office.
In some circles, the question of gas is seen as a proxy for the larger issue regarding the side that Bulgaria stands on in the ongoing war waged by Russia against Ukraine, which in turn influences the choice of available sources of natural gas for the country.
Having announced the creation of a “crisis staff” to deal with energy issues on its first day in office, Donev and his cabinet ministers appear to be downplaying the prospects of a deal with Gazprom. Hristov said on August 11 that talks with Gazprom was “the last variant” but did not appear to rule out the prospect.
With Bulgaria holding snap parliamentary elections on October 2, there has been no shortage of scaremongering and warnings of “a cold winter” from both political and business actors, but little discussion concerning Gazprom’s reliability as a supplier and even less focus on how much Gazprom gas would cost on the terms demanded by the company.
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