The commissioning of the liquefied gas regasification terminal near the Greek city of Alexandroupolis has been delayed by 20 days from the planned start-up on April 30, and this will disrupt the delivery agreed for May 18 to the Bulgarian company “Bulgargaz”. For this reason, on April 30, it will hold an auction on the Bulgarian gas exchange for the provision of 5443 MWh of blue fuel daily throughout the month of May at a virtual trading point. However, this change will not affect the price of the raw material for the next month, and it will be around BGN 55-56/MWh or 5-6 percent below the current price.
This became clear on Monday during the open discussion of Bulgargaz’s application for a price of BGN 57.50/MWh in May, submitted by the company for approval by the Commission for Energy and Water Regulation.
The submitted application includes the supplies under the Azeri contract, as well as the planned May 18 supplies of 1 million MWh to Alexandroupolis, which were awarded to the French “Total”.
However, as early as last week it became clear that the facility will not start operating on April 30, as originally announced, but around May 20, which thwarts the delivery of the tanker. Therefore, “Bulgargaz” announced that it will hold an auction on April 30 for daily physical supplies of 5,440 MWh, with the requirement that they be even across days. The starting price of the auction includes all costs for access and transmission of the natural gas to the virtual sales point Bulgaria, and the bidding will be in steps of 1 cent down from the initial price.
The company’s expectations are that the procedure of the “Balkan” gas hub will not lead to an increase in the price from the stated intentions, which are for a decrease, commented during the meeting the head of the department “Prices, market analyzes and pricing” Lyudmila Vitanova.
However, the final data will become clear on May 1, when the final application will be submitted, on which the regulator must rule.
“Regardless of what will happen tomorrow at the auction, we expect the price for the month of May to be between BGN 55 and 56. We cannot commit to a more accurate forecast precisely because this auction has not ended,” commented Vitanova.
She noted that in its contracts, “Bulgargaz” gives its customers the opportunity to request a reduction for the upcoming month of the quantities stated in its annual program. Customers usually benefit from this, with the company having the right to accept these discounts or not. Given the situation that the expected cargo will not be received in Alexandroupolis, the Board of Directors of “Bulgargaz” has decided to accept the reductions in the quantities of natural gas for the month of May requested by the company’s customers. Therefore, the blue fuel that should have been purchased from the public supplier is about 100,000 megawatts less.
KEVR Chairman Ivan Ivanov added that in April there was a serious decrease in the quantities of natural gas that were delivered compared to the initial requests. He suggests that one reason for this could be the warm weather.
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