Bulgaria awards June LNG tender to Turkey's Botas

The Bulgargaz tender for delivering LNG into Turkey over June 24-25 has been awarded to Turkish state gas importer Botas, Bulgarian energy minister Vladimir Malinov said May 16.

Malinov said 13 companies had expressed interest in delivering LNG, of which 10 had submitted offers.

Botas will be making a discount for Bulgargaz, which will help it save BGN 11.5 million ($6.4 million) for June.

"In addition to the reserved capacity under the agreement signed between the companies at the end of 2022 agreement, Botas will make a discount," Malinov said.

A Mediterranean-based LNG trader with the knowledge of the matter said the price for the tender was unusually low.

"It makes sense if you consider the maintenance schedule for Turkstream at the start of June," the trader said.

The tender was announced May 2 and closed May 13. The cargo was for a total quantity of 1 million MWh (3.4 TBtu), with an operational tolerance of a maximum plus/minus 5%.

Platts, part of S&P Global Commodity Insights, assessed LNG DES East Mediterranean Marker for June delivery at $9.44/MMBtu on May 15, at parity with the June TTF hub futures price or at a premium of 20 cents/MMBtu to DES Northwest Europe.

For a 3.4 TBtu cargo, that would translate to $32 million. However, a saving of $6.4 million on the cargo, would bring the final price to around $25.7 million or a sale price around $7.56/MMBtu. That would be a discount of $1.85/MMBtu to June TTF as on May 14 when the tender was originally awarded.

The company previously tendered for a May 18 cargo for delivery into Alexandroupolis, with an alternative option to deliver into Turkey.

However, since commercial operations for the Greek FSRU were delayed, market participants said the cargo was potentially delivered into Turkey at a premium to TTF.