Bulgargaz forecasts nearly 6% drop in natural gas prices for February

Sofia, Bulgaria: Bulgargaz has submitted an application to the energy regulator proposing a nearly 6% reduction in the price of natural gas, effective from February. 

The gas company’s application foresees a new rate of BGN 73 per megawatt hour, excluding taxes and levies.

Bulgargaz’s calculations, made as of the 10th of this month, reflect the company’s assessment of various factors influencing gas prices. 

However, these figures are subject to change before the final proposal is submitted on February 1, pending approval by the Energy and Water Regulatory Commission.

The proposed price reduction is attributed to several key elements, including quantities sourced under the long-term contract with Azerbaijan and liquefied natural gas obtained through auctions. 

Additionally, the utilization of gas from the storage facility in Chiren is planned for the upcoming month. 

Despite no finalized schedule for the extraction and injection of natural gas in Chiren for 2024, Bulgargaz’s application includes an estimated plan based on a contingency strategy. 

This plan will be updated following the signing of a storage, access, and injection contract with Bulgartransgaz.

Under regulations, The Chiren facility operator must announce free storage capacity for the upcoming gas year at least 30 days before the injection season begins. 

While specifics are yet to be confirmed, Bulgargaz is optimistic about leveraging the Chiren storage to contribute to stable gas prices.

However, the dynamics influencing gas prices are complex and subject to external factors. One such factor is the escalating conflict in the Red Sea region. 

Analysts anticipate that this geopolitical tension will add an additional layer of uncertainty to gas prices. The situation has been further complicated by reports that, towards the end of last year, certain tankers carrying liquefied natural gas began avoiding the Red Sea route. 

Analysts suggest that this alteration in shipping routes may slow down deliveries and potentially lead to increased costs.

Bulgargaz’s proposal for a reduction in gas prices comes when consumers are grappling with the economic repercussions of various global challenges. 

If approved, The potential decrease could provide some relief to households and businesses.

It’s worth noting that the Energy and Water Regulatory Commission will decide on the proposed gas prices after thorough consideration. 

The regulatory body will weigh Bulgargaz’s calculations against market conditions, geopolitical developments, and economic landscape.

As Bulgargaz navigates the intricacies of the energy market, consumers will be keenly watching for updates on the final decision, hopeful that the proposed reduction will materialize and ease the financial burden associated with energy consumption in the coming month.

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members