Europe cheers up for drop in gas price thanks to Azerbaijan

Gas prices in Bulgaria in May were reduced by 21 percent compared to April due to gas supplies from Azerbaijan.

Azernews reports, citing local media, this is stated in the message of the Bulgarian Energy and Water Supply Regulatory Commission (EWRC).

Thus, prices for May are set at BGN 77.55 (USD 43.60) per MWh compared to BGN 98.16 per MWh in April.

The EWRC stressed that gas supplies from Azerbaijan via the Greece-Bulgaria interconnector (IGB) are the key to achieving competitive prices.

The main factors that lead to lower gas prices are the downward trend in prices in European spot markets and the reduction in gas consumption.

The price mix for May includes the entire volume of Azerbaijani gas transported via the IGB, which will cover 62.65 percent of Bulgaria’s consumption this month. The state gas supplier Bulgargaz also added liquefied natural gas to the mix.

It should be noted that the Greece-Bulgaria interconnector began commercial deliveries on October 1, 2022.

Since the beginning of the current heating season, the interconnector has provided about 1/3 of winter natural gas consumption in Bulgaria. IGB is the first route for a diversified supply of natural gas to Bulgaria, guaranteeing increased security of supply and making a significant contribution to competition in the natural gas market, which is a prerequisite for optimizing prices for businesses and households in the country.

While deliveries of 1 billion cubic meters per year under a contract with Azerbaijan are the backbone of the project, IGB has long-term capacity booked by other shippers as well. Most of them are brand new for the Bulgarian market. The Greece-Bulgaria interconnector will have access to several gas sources in 2024.