The material is an excerpt from an article published in Mediapool. The full article is available on Mediapool’s website: https://www.mediapool.bg/gazovata-borsa-mezhdu-gramkite-frazi-i-realnostta-news315815.html
A year after the start of the gas exchange in Bulgaria, the volumes traded are a little over 10 percent of the average annual consumption in the country. Prices were between 2 and 10% lower than the regulated. Compared to the Austrian gas hub, on the Bulgarian gas exchange in September and October the reduction reached 18-20% on DAM and IDM. The data is provided by the operator of the Bulgarian gas exchange “Balkan Gas Hub” (BGS).
But participants in the natural gas market in Bulgaria say that less than a third of the companies registered on the gas exchange are active, and among the main sellers, surprisingly, is not a supplier, but the state gas network operator Bulgartransgaz, which owns Balkan Gas Hub. According to private traders, this is a conflict of interest and a prerequisite for the use of inside information in setting prices in individual trading sessions.
So far, the exchange is far from the goals for which it was established – to ensure transparency, competitiveness and fair trading. At the moment it is used more as a registrar of private transactions outside of it, which by law must be announced on the platform, as well as to clear the imbalances of Bulgartransgaz in the transmission network. There are, however, positive impacts trying to drive the diversification of gas supplies in the country.
It is questionable whether additional quantities of LNG will appear on the gas exchange after the planned interconnection with Greece, and whether the state-owned gas supplier Bulgargaz will release the volumes of Azeri gas agreed for import from the end of this year, which the domestic market cannot take. For the time being, Borisov’s promised deliveries from America, Qatar, Cyprus and Egypt can only be dreamed of, because the big suppliers see Bulgaria as an opportunity for transit of natural gas to Western Europe, not as an end market. Gas consumption in Bulgaria is insignificant, in total approx. 3 billion cubic meters per year.
Still, the status quo has shifted somewhat. The market starts to change and the attitude of large industrial consumers shifts towards gas diversification options different from the public supplier Bulgargaz.
According to the data of Balkan Gas Hub from the beginning of December 2019 to the end of November 2020 a total of 3,480,311 MWh or 348 million cubic meters were sold on the gas exchange. 185 million cubic meters are the monthly products, but this also includes the quantities agreed outside of the exchange, which, however, are registered on it. 48.7 million cubic meters are weekly products, 1.48 million cubic meters are weekend products, 18.5 million cubic meters are sales in the segment “day ahead”, and 19.5 million cubic meters are Intraday. The state-owned supplier Bulgargaz, which was administratively forced to release volumes received by Gazprom to the gas exchange, managed to sell only 1/3 of the planned 220 million cubic meters for 2020.
The gas exchange evaluates these results as positive. “In recent months there has been a progressive increase in the number of transactions, respectively the interest of market participants in the competitive prices achieved on the platform. There is also an increase in the number of members – from 20 at the end of January 2020 to over 40 at the moment”.
The company notes that nearly 40% of gas market players are international, with extensive experience. The rest are local traders, distribution companies and district heating companies. However, those familiar with the sector comment that less than a third of the participants registered on BGS are actively trading natural gas.