Greek independent gas company M&M Gas exported first natural gas to Bulgaria on 1 July, a source familiar with the issue said.

Small volumes were sold on a test basis.

The price of the deal was agreed on bilateral basis and was based on “a very small discount to Bulgarian regulated price,” the source said, quoted by writes Hellenic Shipping News.

The counterparty to the transaction is a subsidiary of an international energy major rather than a Bulgarian company, the source said.

The gas was sold from M&M’s own gas portfolio, which includes LNG.

The trade took place at the interconnection point Kulata-Sidirokastro. The deal follows the signing of an interconnection agreement between gas network operators DESFA and Bulgartransgaz, allowing the transport of gas between Greece and Bulgaria from 1 July.The agreement also provides for a possibility of virtual supply of gas from the Revithoussa LNG terminal in Greece.

However, the source in Greece said that it is unlikely that M&M Gas would import an LNG cargo in July. The wholesale price of gas in Greece, which underwent quarterly revision on 1 July, is relatively low at present as the incumbent gas buyer DEPA continues to be long on gas.

An LNG cargo would need to be priced at no more than $4.10/MMBtu in order to be competitive against the wholesale gas price in the country, the source said.

The Bulgarian energy regulator last week approved a reduction of wholesale gas prices by 10% in Q3 2016. While the source in Greece did not exclude the importing an LNG cargo for onward partial sale to Bulgaria, international LNG prices would have to soften significantly before such transaction could take place.

At the beginning of June, M&M Gas, a joint venture between the Mytilineos and Motor Oil groups, became the first independent gas company in Greece to import gas from Bulgaria. The volumes were also transported in test mode.