Bulgaria, Hungary agree to cooperate on LNG supplies for CEE

September 15 (SeeNews) - Bulgarian state-owned gas supplier Bulgargaz and Hungarian peer MVM CEEnergy have agreed to cooperate in the delivery and trading of liquefied natural gas (LNG), the press office of Bulgarian President Rumen Radev said.

The memorandum, which was signed by the heads of the two companies in Budapest, will pave the way for Bulgaria to participate in LNG markets in Central and Eastern Europe (CEE), the president's press office said in a statement after Radev held meetings in the Hungarian capital with his counterpart Katalin Novak and Hungarian Prime Minister Viktor Orban on Thursday.

The terms of the agreement were not disclosed.

Bulgaria, which, until April 2022, heavily depended on Russian gas, now has access to LNG terminals in Greece and Turkey, along with their gas transmission systems. These infrastructures enable Bulgaria to import gas for domestic use and for transit to neighboring countries.

Already an active participant in the regional LNG market, Bulgaria can play a more ambitious role in the security of gas deliveries and Europe's energy diversification, according to the statement. This will require increasing the capacity of natural gas transit through the country.

Through the Greece-Bulgaria interconnector, which currently has a capacity of 3 bcm per year, Bulgaria imports both Caspian gas and LNG from the Revithoussa terminal in Greece.

Last week, the pipeline's operator ICGB said that keen interest from traders observed during recent market tests will help advance its planned expansion to 5 billion cubic metres (bcm) per year. This will boost imports of Caspian natural gas, including for transit. The expansion will also facilitate greater volumes of LNG imports once the Alexandroupolis terminal in the Greek Aegean Sea, in which Bulgargaz owns 20%, becomes operational next year.

The gas link, which has played a major role in helping wean Bulgaria off Russian gas, connects to the Southern Gas Corridor via the Trans-Adriatic pipeline. ICGB is also among several CEE transmission system operators (TSOs), including Hungary’s FGSZ, which last week agreed to explore ways to accelerate the capacity expansion of the Vertical Gas Corridor that allows for deliveries from Greece to northern Europe, via Bulgaria, Romania and Hungary.

At the beginning of this year, Bulgargaz signed a 13-year agreement with Turkish peer Botas, enabling the import of 1.5 bcm of gas per year via the Turkish natural gas grid infrastructure and LNG terminals.

In August, Botas and MVM CEEnergy signed an initial agreement, which foresees Hungary starting to import 300 million cubic metres (mcm) of natural gas from Turkey in 2024. Earlier this year, the Hungarian gas supplier also signed a deal with SOCAR, the state oil company of Azerbaijan, to start receiving 100 mcm of Caspian natural gas from the fourth quarter of 2023.