Bulgargaz Turns Profit Amidst Storage Gains and Contract Woes

State gas supplier significantly reduces losses in Q1 2025

Bulgargaz has posted a stark financial turnaround in the first three months of 2025, reporting a profit of BGN 12.631 million from natural gas sales. This positive performance, coupled with other factors, has dramatically shrunk the company’s overall loss to a mere BGN 32.44, a dramatic improvement from last year’s deficit of BGN 315.889 million.

Storage Value Recovery Boosts Financials

The improved financial standing, detailed in a recent report from the Agency for Public Enterprises and Control, is partly attributed to the recovery of value from natural gas stored last year. A significant factor was the ability to utilize contract volumes with Turkish supplier Botash following an incident at an accidental gas terminal in Alexandroupolis, Greece.

This situation allowed Bulgargaz to revalue previously impaired gas quantities, securing nearly BGN 14 million in revenue. This contrasts sharply with the previous year, where depreciation of stored gas contributed significantly to the company’s losses.

Cost Reductions Offset by Unused Capacity Obligations

The mishap at the Alexandroupolis facility also enabled Bulgargaz to reduce costs associated with unused capacity on its contract with Botash. Expenses in this area dropped from BGN 64.278 million in Q1 2024 to BGN 55.371 million in the same period this year.

However, the company’s financial statements also highlight ongoing challenges. Last year’s figures included costs for unused capacity at both the Alexandroupolis terminal and the Greek Despa network, as well as the interconnector between Bulgaria and Greece. While Bulgargaz has ceased payments to Botash since June last year, the contract terms and financial conditions remain under renegotiation, with no resolution yet achieved, leading to accumulating obligations.

“Energy Minister Zhecho Stankov said months ago that the struggle was already exceeding $260 million. However, the Turkish company clearly assisted the Bulgarian in receiving the quantities of gas stored on its territory.”

—Unnamed Source, Reporting on Bulgargaz Financials

Market Share Grows Amidst Import Fluctuations

Despite contract complexities, Bulgargaz’s market share saw a modest increase, rising from 64.44% at the end of December 2024 to 67.76% by the close of March 2025. This growth occurred even as the company’s total supplies decreased by 7.58% in the first quarter of 2025.

The company’s sales, however, surged by 11.25%, with notable increases on the regulated market (20.58%) and the stock exchange (70.38%). Bulgargaz is also expanding its trading reach, securing a trade license on the Hungarian Exchange and establishing a subsidiary in Moldova with plans to trade there, in addition to holding a license for the Romanian Exchange.

Debt Remains a Significant Concern

On the downside, Bulgargaz continues to grapple with substantial debt. Loans now exceed BGN 1.2 billion, an increase of BGN 114 million from the end of 2024, primarily due to overdrafts. The company’s liabilities are also growing, reaching BGN 1.578 million.

Data indicates that at the end of March, Bulgargaz held 1.5 million MWh of natural gas in Turkey, a decrease from the end of the previous year. However, imports from Turkish stocks are ongoing. At the Alexandroupolis terminal, 173,609 MWh of gas intended for Bulgaria awaits the facility’s operational restoration.

The European Union’s natural gas storage levels, crucial for ensuring energy security, stood at an average of 65.2% full as of May 15, 2024, according to Eurostat, underscoring the ongoing need for reliable supply chains and efficient gas management.