Page 16 - EurOil Week 46 2022

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Estonian gas sellers lowering ultra-low-cost airline, operates a fleet of 172 or 30% of its revenues, which is still to be
Meanwhile, the company has BGN1.2bn,
Airbus A320 and A321 aircraft, which is
December prices one of the youngest in the industry with an collected. The largest debt to Bulgargaz is that
average of five years.
of the Sofia heating utility, Toplofikatsia Sofia,
Estonian gas sellers are reducing the price of The low-fare carrier racked up a €384.3mn which was worth BGN500mn as of end-
natural gas next month, although it will still loss in the first half of its business year starting September.
remain significantly higher than the price of April 1, widening from a €120.9mn loss in
December futures on the gas market, ERR. the base period as fuel costs jumped 302% to
ee, an Estonian news website, reported on €1.03bn. Hungarian consumers cut back
November 18. Fuel consumption rose 87% to 760,851
Estonian energy company Eesti Gaas is tonnes during the period. on gas usage
currently offering natural gas to household Revenue rose 149% to €2.19bn as
customers with flexible plans at a price of passenger numbers increased 112% to Hungrian domestic gas consumption fell 9%
€2.85 per cubic meter, but is reducing its price 26.5mn. y/y in September as consumers continued
to €1.75 next month — a drop of nearly 40%. The airline has recently been recognised to adapt to rising prices, according to the
“Natural gas storage sites in Europe are as the “Most Sustainable Low-Cost Airline” monthly report of the Hungarian Energy and
full, and the weather has been warmer and within the World Finance Sustainability Public Utilities Regulatory Office (MEKH) on
consumption lower than expected,” Eesti Gaas Awards 2022 and the “Global Environmental November 14. The daily peak consumption,
board chairman Margus Kaasik explained. Sustainability Airline Group of the Year” by 197GWh, was the lowest since 2016.
“We’ve got our new gas suppliers and supply the CAPA-Centre for Aviation Awards for Detailed and revised data from August
routes in place and have shifted entirely to Excellence 2022. showed residential gas consumption in
LNG from Norway and the US.” OMV has already been supplying the first August plunged 18% y/y following the
At the same time, December futures prices volumes of SAF to Austrian Airlines, part of overhaul of the retail utility subsidy scheme a
on the Dutch Title Transfer Facility (TTF) the Lufthansa Group, at Vienna International month earlier.
natural gas market have remained in the €100- Airport since March 2022. Households consuming more than the
120 range per megawatt-hour. The European Sustainable aviation fuel is produced average national consumption limit of around
Gas Spot Index (EGSI) likewise currently by OMV by co-processing sustainable and 1800-1850cm per year from August to next
stands at just over €101 per megawatt-hour. regional raw materials, specifically used July will have to pay between HUF732-753/
Other gas sellers in Estonia are reducing cooking oil. cm (€1-1.85) compared to the regulated price
their natural gas prices as well. Alexela and of HUF102/cm for consumption below that
220energia are both charging €1.75 per threshold.
cubic meter under their changing price plans Bulgaria’s Bulgargaz posts According to government data, 72% of
in December, while the state-owned Eesti households consume less than the national
Energia will be charging €2.10 per cubic €14.3mn loss through September average and pay the subsidised price for gas
meter. and electricity.
From October through the end of next Bulgaria’s state-owned gas supplier Bulgargaz The cutback in subsidies marked a major
March, the Estonian government will be posted a net loss of BGN28mn (€14.3mn) reversal from the government’s election
compensating household consumers 80% of as of the end of September 2022, reversing a promise of keeping energy bills low. Rising
the monthly average price of gas exceeding net profit of BGN33mn a year earlier, Capital global energy prices and the faltering forint
€80 per megawatt-hour exclusive of VAT, weekly reported. has put a huge financial strain on the budget
ERR.ee said. The main reason for the negative result is after the pre-election spending spree lifted the
the lower demand following the EU’s directive deficit.
on voluntary lowering of gas consumption by The surge in monthly energy bills comes at
OMW and Wizz Air agree on 15% in member states. a time when food inflation hit a multi-decade
high of 40% in October, further aggravating
Bulgargaz said that its clients have
supply of sustainable fuel demanded the amendment of their contracts the cost of living crisis.
Electricity consumption fell 2.3% y/y in
so that they are no longer obliged to pay for
between 2023-2030 natural gas even if it is not consumed, the so- September after a 2.6% decline in the previous
month, while the maximum system load
called “take or pay” clause, Capital reported.
OMV and Wizz Air have signed a Meanwhile, due to the surging prices of was down 3.8% and 5% respectively in the
memorandum of understanding (MoU) for natural gas the consumption of Bulgargaz’s same period, lower than in the base period,
the supply of cc. 185,000 tons of sustainable clients has decreased. according to a previous report by MEKH,
aviation fuel (SAF) until 2030, the Hungarian- Bulgargaz also said that it was forced to sell November future gas prices in September
owned no-frills airline informed state news the liquified natural gas that was not puchased fell by €50/MWh on European and Asian
agency MTI on November 18. The agreement by its contractors at a much lower price. markets due to high storage levels and the
paves the way for Wizz Air to reduce its The company’s revenue was more than decline in natural gas-intensive industrial
carbon footprint by 25% by the end of the BGN4.4bn through September, four times production.
decade and to become carbon-neutral by higher y/y. The revenue is expected to reach The government mandated a 25%
2050. BGN6bn by the end of the year. reduction in gas consumption at state
“We have achieved our market-leading On the other hand, the purchased institutions and state-owned companies in
sustainability position by continued quantities of gas in Bulgaria were almost Q4.
investment in innovative technology and unchanged y/y at 2.5bn cubic metres, or 80%
operating the most up-to-date aircraft in the of the usual annual consumption. Capital
most efficient way,” Wizz Air Development noted that Bulgargaz seems to have lost
Officer Owain Jain Jones commented. market share as the consumption of gas in the
Wizz Air, the fastest-growing European country has not decreased.

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