Electricity.Trade analysis of the Bulgargaz–BOTAS agreement highlights its significance beyond Bulgaria’s gas sector. The contract reserves up to 1.3 bcm per year of LNG terminal and transmission capacity at a fixed cost of approximately 500,000 EUR per day, translating into annual liabilities of roughly 180 million EUR regardless of utilization.
Because the reserved capacity has remained largely unused, fixed costs distort Bulgaria’s gas cost base. Electricity.Trade notes that this distortion reduces the competitiveness of gas-fired power generation, constraining exports and tightening regional power supply during peak periods.
The resulting impact extends into neighboring markets. Reduced Bulgarian exports increase reliance on Hungarian and Romanian supply, lifting prices across SEE during stress events. Electricity.Trade concludes that long-term gas contracts with rigid cost structures can materially alter power market dynamics, even when not directly activated.
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