Bulgargaz SPJSC - Sofia - Short Company profile

315 million leva loss: Bulgargaz is heading for bankruptcy due to the contract with Botas The public gas supplier Bulgargaz reports a loss of 315 million leva for 2024. In just one year, it has grown by over 500%, after the company reported a loss of 52 million leva in 2023. The main reason for this result is the costs of unused capacity under the agreement with Botas, which amount to about 267 million leva for 2024 alone. Recent calculations have shown that Bulgargaz is losing nearly a million per day under the contract with the Turkish gas operator. It was concluded during the Donev cabinet at the end of 2022 and is valid until 2035. The termination of the contract will require the payment of all due fees for the entire period, or over three billion leva. The reason for the negative financial result of Bulgargaz is also the unused capacity on the route from the terminal in Alexandroupolis to Bulgaria due to the delay in the date of its commissioning (16 million leva). Losses were also generated by the depreciation of natural gas in the storage facility in Chiren, injected in the summer of 2022 (36 million leva), etc. The total amount of operating revenues is 1.49 billion leva, or a decrease of over 40% compared to a year earlier, which is due to the decrease in the price compared to the previous reporting period, as well as to the weaker consumption - the company is increasingly losing customers. Gas sales are decreasing significantly - by the end of 2024, a total of 17,806,287 MWh were traded, which is a decrease of about 28% compared to the same period of the previous year. The largest decline in the quantities sold comes from stock exchange sales (-82%) and from the chemical (-76%), construction (25%) and glass and porcelain (23%) sectors. The total amount of liabilities is almost 1.9 billion leva. The trend of increasing the share of LNG supplies after the reduced supplies of "pipe" gas from Russia to Europe continues in 2024. Since the beginning of the year, a decrease in natural gas prices has also been observed on the European gas markets, which, on the one hand, is due to the filling of gas storage facilities and the provision of alternative supplies of liquefied gas. On the other hand, the construction of new LNG regasification terminals in more European ports, the relatively warm winter, etc. also have an impact. Bulgargaz reports continued local and regional supplies of Russian natural gas quantities at a large discount. The main part of the quantities in the Chiren storage facility were injected in 2022. at a price significantly higher than the market price in 2023. These quantities were injected in accordance with several European regulations and in connection with the goals of filling 80% of the capacity of local gas storage facilities. The public supplier received BGN 157 million under the Program for providing compensation to enterprises that injected natural gas into the underground gas storage facility in the period from May to October 2022. This amounts to 1,045,167 MWh at a price of up to BGN 150 per MWh. As a result, the company has recovered a large part of its loss accumulated from the sale of gas below cost. Bulgargaz is also reporting financial losses on another line. Due to technical reasons, the terminal in Alexandroupolis has not been operational since January 2024, as planned, and this has required the quantities of liquefied natural gas agreed for delivery under the announced tenders by the company to be delivered to terminals in Turkey in accordance with the agreement with Botas. Amid the record loss of Bulgargaz, the municipal company "Toplofikatsiya Sofia" continues to delay the repayment of its debts. The public supplier has been a "creditor" of the capital's heating system for years, whose overdue gross debts to Bulgargaz are 985.5 million leva, compared to 784 million leva a year earlier. As of 19.05.2025, the total debt of "Toplofikatsiya Sofia" to "Bulgargaz" was already 1.3 billion leva. By virtue of an agreement between "Toplofikatsiya", the "Security of the Electricity System" fund, BEH and "Bulgargaz", the monthly amounts of the fund's payments are redirected to "Bulgargaz" and BEH in a ratio of 80/20. At the end of last year, it became clear that the debts of "Toplofikatsiya Sofia" are on track to reach 1 billion leva. And the reason is that the loss of the Sofia district heating system for 2024 is already 160 million leva and without a state subsidy, a loan from BEH or other form of support, it will not be able to cover its debts soon.