Anticipation grows for Azerbaijan's gas supply amidst strengthening energy partnership

Bulgaria is looking forward to the possibility of receiving gas supplies from Azerbaijan for its regions, Azernews reports, citing a source within the Bulgarian Ministry of Energy.

The opening of SOCAR's Commercial Representative Office in Bulgaria on April 25, 2023, marked a significant turning point, prompting heightened activities by SOCAR in the country. Currently maintaining only two representative offices in Europe—in Germany and Bulgaria—the latter has evolved into a regional office for the Balkans, covering eight countries in the area. This growth signifies a strong strategic energy and political partnership, indicating trust between Bulgaria and Azerbaijan.

The source expressed optimism for expanded investments from Azerbaijan, encompassing initiatives such as the gasification of Bulgarian regions, the supply of petroleum products, and the development of electric mobility charging infrastructure.

Highlighting Bulgaria's focus on enhancing energy efficiency and facilitating the deployment of renewable energy sources, the source emphasised the desire to extend cooperation with Azerbaijan in these domains. The source also underlined the potential for collaboration in the Middle Green Corridor initiative, offering access to clean energy production opportunities in the Caspian region for the Southeast European (SEE) region, including Bulgaria.

Recall that earlier this year, Bulgaria's public utilities regulator approved an 11.3 % drop in gas prices for January. Bulgarian mass media said that the new price is set at 77.6 leva per MWh, excluding transport costs, excise duties, and value-added tax.

Bulgaria's Energy and Water Regulatory Commission (EWRC) said that the long-term gas contracts with Azerbaijan, which are linked to the price of oil in international markets, have caused the price of gas to fall in the country.

According to the report for January 2024, Azerbaijani gas accounted for 40.3 % of the country's monthly consumption, and the EWRC evaluated this as a positive factor for achieving favourable prices. The rest of the consumption is provided by the state-owned gas company "Bulgargaz" under a contract for the supply of liquefied natural gas (LNG) and gas drawn from the country's storage in Chirand.

It should be noted that in 2023, the supply of Azerbaijani gas to Bulgaria was expected to be close to 1 billion cubic metres. Gas supply to Bulgaria through the Greece-Bulgaria Interconnector (IGB) started two years ago. In 2021, 270 million cubic metres were supplied. In 2022, the supply was slightly more than 500 million cubic metres.

Azerbaijan currently supplies gas to Italy, Bulgaria, Greece, Romania, and Hungary in Europe. Gas supplies to Serbia began this year based on a deal signed with Azerbaijan last year. In addition, several European countries have expressed their interest in buying Azerbaijani gas.