site.btaUPDATED Energy Minister for BTA: Natgas Secured for 2023

In an interview for BTA, caretaker Energy Minister Rossen Hristov said that the supplies of natural gas for 2023 have been secured. He described the recently concluded Bulgargaz tender for annual gas supplies as having passed very well, with very strong interest by key leading companies and good pricing offers. 

In his words, all offers are currently being assessed because the companies are not offering deliveries for the entire period but certain quantities within 2023. That is why several suppliers will be used. At present, the suppliers are being selected based on the price they offer and on whether they have their own slot or would be using slots reserved by Bulgaria. 

“We are making the supply scheme for the entire year,” Hristov said, specifying that he is talking about supplies of liquefied natural gas (LNG). The idea is for Bulgaria to transition almost entirely to LNG supplies, with the exception of the Azeri gas of 1 billion cubic metres delivered via the Greece-Bulgaria interconnector. The goal is to secure capacity for unloading another 2.5 billion cubic metres of LNG, because Bulgaria’s entire consumption is around 3.5 billion cubic metres. “We have no problem with quantities, the fight is with the price. We are striving towards being very competitive,” Hristov explained. 

Commenting on the negotiations with Turkiye for access to its LNG terminals, Hristov said it has practically been agreed upon already. Bulgaria is also negotiating with Turkiye to join that country’s negotiations with European and US companies on mid- and long-term contracts for LNG supplies.

In his words, suppliers are very interested in deliveries to Turkiye, Bulgaria and, from there, to other countries; they see this as a big step towards conquering the market and, therefore, are willing to offer better prices. These negotiations will be for long-term contracts for around 10 years. Based on this potential, suppliers are expected to further optimize short-term supplies for the next one to two years, Hristov added. 

Asked about the negotiations that began in early December 2022 on renewing the Alexandroupolis-Burgas oil pipeline project but without Russia’s participation, the Energy Minister said he and his Greek counterpart will sign a memorandum to that end within several weeks. The document envisages the creation of a working group of experts from Bulgaria and Greece that would “dust off” everything done on the project thus far. A roadmap will be elaborated determining the next steps and the deadlines in order to get the project started. The scheme for the Greece-Bulgaria gas interconnector will most probably be used. The specific contracts will be signed after the entire structure has been elaborated.

At present, Bulgaria is negotiating on participation in some form in the use of the ports in Alexandroupolis and Kavala, Hristov also told BTA. Thanks to that transport corridor, which could start from Greece, pass through Bulgaria and Romania to then reach Ukraine as well as Central Europe, the project could become extremely important for the whole of Europe. The first step is to build an oil pipeline between Greece and Bulgaria, and then the project could expand, the Minister argued.

Hristov also commented on the impact on Bulgaria of the decree recently signed by Russian President Vladimir Putin that bans the supply of crude oil and oil products from February 1, 2023 for five months to countries abiding by the Western price cap on Russian seaborne crude oil. In Hristov’s words, there is some kind of door in the decree through which Bulgaria could continue getting Russian oil supplies. He specified, however, that this is a matter within the Economy Ministry’s competence. 

According to him, Bulgaria has to find a solution to non-Russian oil supplies because, firstly, it is not known for how long Russia is ready to deliver oil; the supplies could be discontinued at any moment. Secondly, there is a logistics problem due to the military actions affecting the Black Sea’s navigability. Lukoil does not have a big base for storing crude oil and can work for about ten days without supplies. 

To find a solution, the caretaker government is looking at what the neighbouring countries are doing. Romania, for example, is getting oil from Kazakhstan. Azerbaijan also offers some options, Hristov said.

According to him, a permanent solution should be found: the short-term one is deliveries via tankers and the long-term, via an oil pipeline. A stable supplier should be found of a certain oil type, preferably one close to Russia oil’s indicators, and the production process should be optimized. 

Hristov told BTA that the Energy Ministry is working on a national energy strategy with a focus on electricity that will be tabled in Parliament this month. Its adoption will allow the work on key projects to begin. He listed as a key project in the strategy the development of Bulgaria’s nuclear energy sector by finishing the units at Belene, which could be done without the participation of their Russian manufacturer, and building two units at the Kozloduy nuclear power plant that will replace the old Units 5 and 6. 

It is also important to transition to Bulgaria-made hydrogen as an alternative to gas, and for the industry and transport to switch to electricity. 

Other key projects in the draft energy strategy are related to the development of hydroelectric power plants, including the construction of one or two plants on the Danube as joint projects with Romania.

Renewable energy is another key element in the draft document. Bulgaria could offer Greece, which wants to be a significant green energy producer but lacks big potential for storing it, services for balancing and storing green energy, Hristov told BTA.