A contract between Bulgargaz and BOTAS reserves up to 1.3 bcm per year of LNG terminal and transmission capacity. The reserved capacity carries a fixed cost of approximately 500,000 EUR per day. The arrangement results in annual liabilities of roughly 180 million EUR, regardless of utilization.
Electricity.Trade’s analysis links the agreement to structural risk affecting regional power pricing. The contract’s reserved capacity has remained largely unused, according to the analysis. As a result, fixed costs are described as distorting Bulgaria’s gas cost base.
Implications for gas-fired power generation and export flows
Electricity.Trade says the distortion reduces the competitiveness of gas-fired power generation. The analysis also states that this effect constrains exports. It further describes tighter regional power supply during peak periods.
Spillover effects across Southeast Europe during stress events
The impact is described as extending into neighboring markets. With reduced Bulgarian exports, Electricity.Trade notes increased reliance on Hungarian and Romanian supply. The analysis says this contributes to higher prices across Southeast Europe during stress events.
Electricity.Trade concludes that long-term gas contracts with rigid cost structures can materially alter power market dynamics. This can occur even when such arrangements are not directly activated.
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