Bulgaria's Bulgargaz pledges follow-up proposals on Turkey gas contract

Bulgaria's state-owned gas company Bulgargaz is set to present its follow-up proposals to the country's energy ministry "as soon as possible", on next steps regarding the renegotiation of its gas import agreement with Turkey's Botas.

Bulgargaz held its latest round of talks with Botas Aug. 15 on the terms of the 13-year gas supply contract, which was agreed in January 2023 and provides for Bulgargaz to import regasified LNG via Turkey.

The Bulgarian parliament voted in April to task the country's energy minister, Vladimir Malinov, with renegotiating the agreement amid criticism of its terms.

"Representatives of Bulgargaz and Botas held another round of negotiations regarding the concluded agreement between the two commercial companies," the Bulgarian company said Aug. 15.

"The management of the company will inform the energy minister of the results of the meeting as soon as possible," it said.

"The report, which will be sent to the energy minister, will include both the relevant analysis and proposals for taking follow-up actions in the negotiation process with Botas."

Malinov has held several rounds of talks with his Turkish counterpart Alparslan Bayraktar since April, with both sides saying they were "united" in their stance on cooperation to ensure diversification and gas supply security.

The deal in January 2023 was hailed by the caretaker Bulgarian government at the time as a key initiative to improve gas supply security after the country was cut off from Russian pipeline deliveries in April 2022.

The first volumes under the deal were delivered in April last year after Bulgargaz secured an LNG cargo from the US that was delivered to Turkey's Marmara Ereglisi LNG terminal.

However, the agreement has been criticized in Bulgaria for not being in the country's interests and as underdelivering gas.

Spare capacity

Turkey has a total sendout capacity of about 30 million metric tons per year (41 Bcm/year), but its LNG imports are well below its import capacity, meaning it can free up capacity for onward transit to Bulgaria.

Bulgaria's grid operator Bulgartransgaz and Botas also signed a key interconnection agreement in January for gas flows at the Strandzha/Malkoclar point on the border between the two countries.

Bulgartransgaz said the agreement was of "key importance" for the diversification of gas supplies, not only for Bulgaria but also for the regional and European markets.

Bulgartransgaz said Turkey's gas transmission network provided access to gas from local fields, Azerbaijan, Iran and the global LNG market through Turkey's regasification terminals.

Bulgaria was historically almost entirely dependent on pipeline gas imports from Russia, but recent infrastructure developments have enabled the southeast European country to eliminate that dependency.

It aims to import around 1.5 Bcm of gas from Azerbaijan via the Southern Gas Corridor this year and has access to regasified LNG delivered via Greece and Turkey to help meet demand of around 2.7 Bcm/year.

It comes as spot LNG prices for delivery into the East Mediterranean continue to trade well above $10/MMBtu.

Platts, part of S&P Global Commodity Insights, assessed the DES LNG marker for East Mediterranean delivery at $12.83/MMBtu on Aug. 15.