Bulgaria replaces Russian gas with LNG via Greece

With Russian gas being phased out, Bulgaria is becoming dependent on Greek LNG terminals to source LNG from suppliers such as the U.S. and Qatar.

Bulgartransgaz, the national grid operator, is a 20% shareholder in the 5.5 bcm/year Alexandroupolis Floating Storage Regasification Unit (FSRU), through its stake in Gastrade, and imports via the 7 bcm/year Revithousa LNG terminal are also an option.

On December 11th, the unloading of the second cargo of LNG from the United States delivered to state-owned distribution company Bulgargaz took place at the Alexandroupolis floating terminal. LNG can also be imported via Turkey, although this is believed to be a more expensive option.

Despite relatively strong renewables growth, Bulgaria is still dependent on gas for heating and industry although overall consumption is modest. Demand is forecast to rise over the next 10 years, according to Bulgartransgaz, from about 3 bcm in 2025 to over 5 bcm in 2034. This is in line with expected economic growth and the coal phase out, among other factors.

But not everyone believes this will be the case.

“Gas demand in Bulgaria has adjusted downward and is unlikely to recover to pre-crisis levels. We are not a huge consumer. Most gas is used for district heating, through CHPs. We only have one gas-fired power plant as gas is an expensive fuel,” says Tsvetomir Nikolov, an analyst at the Еnergy and Climate Program

at the Sofia-based Center for the Study of Democracy, told Gas Outlook.

Nikolov says it is cheaper for Bulgaria to import electricity from neighbouring countries, such as Greece, during peak hours than to use domestic coal-fired power plants. Due to the continued existence of too many coal-fired power plants and insufficient integration of renewable energy sources in Bulgaria, he says, gas-fired power plants in Greece are cost-effective.

Coal is currently the second largest contributor to electricity generation in Bulgaria, after nuclear power, with a share of close to 23%, according to 2024 data from Ember. 

Against this backdrop, Nikolov says phasing out coal for electricity generation will take time due to government subsidies.

“Coal is the main question for the energy transition in Bulgaria,” says Nikolov. “There is a distorted market environment, with government intervention to preserve coal-fired capacity through capacity mechanisms. This keeps coal plants online that would otherwise not be able to compete and it creates investor uncertainty. As long as coal is subsidised, the energy transition will be slower than it needs to be.

That said, renewables growth in Bulgaria has been strong, driven almost entirely by solar.

“The installed solar PV capacity has exceeded 5 GW compared with just 2 GW only a few years ago. There is also a substantial pipeline of projects that are under construction or near completion. We are expecting 5 GWh of battery storage by 2030,” said Nikolov.

Wind power, by contrast, has barely grown, he added.

“The offshore wind segment lacks a regulatory framework including a price support mechanism such as contracts for Difference (CfD). As for onshore wind, there is strong opposition from local communities. Onshore wind capacity has remained at 1 GW for 10 years.”

More gas to Ukraine?

The Greece-Bulgaria Interconnector (IGB) plays a pivotal role in transporting gas from Greece’s LNG terminals to Bulgarian consumers. However, the IGB also forms part of the transit route for LNG to reach Ukraine as it connects with the Trans-Balkan Pipeline which transports gas onwards to Romania and Moldova before it reaches Ukraine.

Bulgartransgaz and and other TSOs in the region are now planning to facilitate more gas exports from Alexandroupolis LNG and the Trans Adriatic Pipeline (TAP) to reach Ukraine and have announced tariff reductions along the Vertical Corridor route in a move to boost transit volumes.

However, a capacity auction for three pipeline routes via the Trans-Balkan corridor, which took place on 22nd December last year, reportedly yielded no bids. The starting points from the three routes are from Revythoussa LNG (Route 1), the Alexandroupoli FSRU (Route 2) and via the Trans Adriatic Pipeline (TAP) at the Greek city of Komotini (Route 3). All three route follow the Trans-Balkan corridor to Ukraine.

Nevertheless, Justin Dargin, an energy expert at the Middle East Council on Global Affairs, told Gas Outlook that Bulgaria’s role as a transit country via the IGB is likely to grow in importance as Russian pipeline gas is phased out across Southeast and Central Europe.

“With access to LNG imported through Alexandroupolis, including U.S. volumes, Bulgaria is increasingly positioned as a conduit rather than just an end-market, particularly for supplying neighbouring countries facing tightening supply options,” he says.

In terms of capacity, the 3 bcm/year IGB pipeline does have some headroom, but its ability to support large-scale onward transit will still be constrained by upstream LNG availability and downstream network bottlenecks, said Dargin. A planned planned capacity expansion to 5 bcm/year is moving through preparatory steps, but has not yet been fully implemented.

“Any sustained role supplying Ukraine or the wider region would require not only full utilisation of IGB but also coordinated upgrades and commercial alignment across the broader regional transmission system,” said Dargin.

As for Russian gas transiting via TurkStream toward Hungary and Slovakia, Bulgaria’s role in that corridor is likely to diminish over time.

“The Bulgarian government announced that it would align with the EU goals of completely phasing out Russian gas imports by 2027. While Russian gas flows may persist in the near-term due to contractual obligations and security-of-supply considerations, the EU’s political and regulatory trajectory clearly points toward a reduction of Russian gas imports,” Dargin said.

(Writing by Andreas Walstad; editing by Sophie Davies)