Bulgaria Gas Industry Struggle After Russian Gas Ban
The cessation of Russian gas supplies to Bulgaria last week worried large and small companies; They fear supply disruptions and rising prices. According to one of the bakery owners, prices may rise further. The government insists that Bulgaria has a “choice” of Russian gas and calls Moscow’s move to cut off supplies “blackmail.”
Although natural gas supplies escaped the punishment of European sanctions against Russia for its invasion of Ukraine; Moscow sought to sow discord among European countries by using their dependence on gas. Russia demanded that Gazprom customers pay in rubles, not US dollars or euros; That would violate Western sanctions. The Russian energy titan cut off supplies to Bulgaria and Poland on April 27. Since then, Bulgaria’s neighbors stepped in and stepped up supply to the country, which received more than 90 percent of its gas from Russia for decades.
Bulgaria After the Russian Ban
To meet the annual needs of the Balkan EU member, approximately 3.0 billion cubic meters of gas, The lack of a long-term solution forces large industrial consumers and small businesses. Many people in Sofia still remember the winter of 2009, when a Russian-Ukrainian gas leak cut off supplies to Europe for days. Because of this, homes stayed without heating in the winter, and the industry was rationalized.
Bulgaria already pays 10 percent more for its gas; The Minister of Energy confirmed this after securing the May delivery through an intermediary gas trading company. The government promised to diversify suppliers to ensure price restraint and energy supply. It plans to complete another significant pipeline connecting its gas network with Greece by the end of June.
This will allow the state gas operator Bulgargaz to negotiate with Azerbaijan; To increase the supply of the existing contract to 1.0 billion cubic meters per year. Get more gas from liquefied natural gas terminals in Greece.
The Prime Minister also said that the government is in talks to purchase LNG from Egypt and the US. Analysts say prices could fall if the country can secure long-term contracts for LNG supply. According to experts, there is a huge opportunity to achieve stable diversification of gas supply; However, this will not happen overnight.
Conclusion
It is operating normally at the Bulgartransgaz compressor station near Ihtiman, where Russian natural gas is still flowing through bright yellow pipes. However, Bulgargaz can’t use this gas. Most of it is for northern Macedonia and Greece. For its supply, Bulgaria is currently relying on swap operations with its neighbors Who supply it with Russian gas or LNG from Greece and inverted pipelines from Romania.
However, the expert warned against the dubious scheme of Russia to refuse a direct contract with Bulgargaz. In return, it forces the country to buy gas at higher prices through intermediaries, such as the Hungarian gas trader MET, which is known to be close to Gazprom, Which has already helped deliver security for May. Ultimately, this could lead to more dependence on Russia for worse contract terms. Some players in the industry are taking a bold look as they have already begun to convert their equipment to alternative fuel sources; For fear of a supply crisis. Rising prices are expected, but it will not be impossible to work on it.
