Bulgaria will not Suspend Gas Supplies to Serbia and Hungary but will Review Contracts with Gazprom

Business » ENERGY | April 27, 2022, Wednesday // 12:43
Bulgaria: Bulgaria will not Suspend Gas Supplies to Serbia and Hungary but will Review Contracts with Gazprom Ex-PM Boyko Borissov (left), Russian president Vladimir Putin (center-left), Turkish president Recep Tayyip Erdoğan (center-right), Serbian president Aleksandar Vučić (right) inaugurate the Turkstream pipeline (08.01.2020)

For the time being, Bulgaria has no intention of stopping transit gas to Serbia and Hungary. This became clear at a briefing by Bulgarian Energy Minister Alexander Nikolov, who gave more details about Gazprom's decision to suspend natural gas supplies to Bulgaria. He added that our country is a loyal partner to neighboring countries, but clarified that all existing agreements, to which Gazprom is a party, will be reviewed. Nikolov did not specify the purpose of this decision.

Natural gas for both countries is supplied through the Turkish Stream pipeline, built by the GERB government for BGN 3 billion. Bulgaria receives money for transit shares.

Nikolov explained at the briefing that in early April, Gazprom told the Bulgarian side that it wanted natural gas supplies to be paid for in rubles, not dollars, as agreed. Immediately afterwards, an analysis of Russia's new two-stage payment procedure began. It was found that it hides risks, as it is not known at what exchange rate the relevant amounts will be converted into rubles. According to Nikolov, this could lead to large losses for Bulgarian energy companies. According to him, there is a risk of paying for supplies that will not even be made.

The Minister of Energy also said that Bulgaria sent a reply to Gazprom after their first letter, in which it asked for more details on the method of payment. We did not receive anything specific in response, and so it was until April 26, when the Russian company announced that it was suspending supplies.

"We want a legal opinion on the existing contract. Bulgargaz is a long-term and loyal partner of Gazprom. We have documents that deliveries for this month have been paid. Failure to deliver the quantities under the contract is a violation," Nikolov said, without explaining whether Bulgaria will seek its rights.

The Minister added that besides Bulgaria, Poland and Lithuania are in the same situation. According to him, this showed that "natural gas is used more as a political and economic weapon in times of war, rather than as a legal and commercial relationship."

"As long as I am Minister of Energy, Bulgaria will not negotiate under pressure and with its head bowed. Bulgaria is not for sale and is not amenable to any price and to any other counterparty from a third country," Nikolov said.

However, he did not specify why Bulgaria has not made an account to pay in rubles to Russia. A few weeks ago, the European Union announced that paying for Russian gas in rubles from European buyers, as requested by President Vladimir Putin, would violate the EU's sanctions regime against Moscow.

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