December 1 (SeeNews) - Bulgaria's utilities regulator said on Thursday that it approved a wholesale price of natural gas valid for December of 146.09 levs ($78.54/74.69 euro) per MWh, which is an increase of almost 19% on the November price.
The increase is the result of the higher prices of gas stored in Bulgaria's Chiren underground storage site in the past months and the rise in consumption by heating utilities in winter, the Energy and Water Regulatory Commission (EWRC) said in a statement.
The gas injected in Chiren was purchased at higher prices in August and September and is the most expensive element of the price mix for December, EWRC noted.
The definitive price was slightly reduced from 146.83 levs per MWh which public gas supplier Bulgargaz had requested, revising upwards its initial price proposal of 145.87 levs per MWh for December.
By comparison, prices on European spot gas markets for December delivery amount to 119 euro ($125.17) per MWh, EWRC said. The approved price is also lower than the hypothetical purchase price of over 157 levs per MWh if Bulgargaz had continued to receive deliveries from Russia's Gazprom, the regulator said. Gazprom cut off gas deliveries to Bulgaria at the end of April, with Bulgaria's long-term contract expiring in December.
The more favourable price is also due to imports of gas from Azerbaijan via the Greece-Bulgaria interconnector. Those quantities cover 27% of Bulgaria's consumption needs.
Bulgargaz has also signed supply agreements with traders from the region for the delivery of liquefied natural gas (LNG). Quantities of pipeline gas have also been purchased through an auction on the Balkan Gas Hub.
Bulgaria is expected to pass legislation which will remove the need for Bulgargaz to release quantities of natural gas for trading on the Balkan Gas Hub. These volumes, which come at very competitive prices, will thus remain for inclusion in the price mix for the regulated market, leading to a reduction in the final cost. For December, this move would have saved Bulgargaz 17 million levs in expenses, EWRC noted.
(1 euro = 1.95583 levs)