site.btaUPDATED Parliamentary Ad Hoc Commission Has Decided to Refer to Prosecution Service Bulgargaz-BOTAS Deal

State-owed natural gas supplier Bulgargaz has to pay USD 500,000 every day to Turkish energy company BOTAS for gas capacity which remains largely unused, MP Radoslav Ribarski (CC-DB) told journalists in the National Assembly on Thursday. He spoke about the completion of a parliamentary investigation into Bulgargaz' agreement with BOTAS, signed in Sofia on January 3, 2023. Borislav Gutsanov (Socialist) said that the committee has decided to refer to the prosecution service the Bulgargaz-BOTAS deal.

"Things seem quite disturbing," Ribarski commented. He and Gutsanov said the report on the three-month investigation is ready and should reach the debating chamber of the National Assembly next week. In Gutsanov's words, "it is a shameful contract that enslaved Bulgaria".

According to Ribarski, only one and a half shiploads of liquefied natural gas out of a potential 14 shiploads, for which Bulgaria had capacity, were supplied. "Although we are not using the capacity [in full], we pay those fees every day for the whole capacity agreed by the former caretaker government in which Rosen Hristov was minister of energy," Ribarski said.

Next week, when the report will be discussed, the present caretaker Minister of Energy Vladimir Malinov will be invited to the National Assembly in his capacity as a direct participant in the negotiations with BOTAS to present his side of the story and his opinion about the possibility for renegotiation, this MP said.

He explained that the agreement between Bulgargaz and BOTAS, which also involves Bulgartransgaz as a third party, stipulates that Bulgaria will supply natural gas for Turkish networks, and then the gas will be bought back at the Bulgarian border. "This is not the normal kind of system-to-system interconnection which allows flexibility of supplies. We are supposed to pay for the capacity regardless of the number of shiploads received."

While Bulgaria pays huge capacity charges over a period of 13 years, as envisaged in the agreement, BOTAS uses the Bulgarian gas transmission system and thus robs Bulgargaz of part of its market share, Ribarski said. He estimated that Bulgargaz lost 27% of its market share in 2023.

He insisted that the agreement should be renegotiated.

According to Gutsanov, the agreement will be hard to undo. "The contractual terms need to be improved which is why the ad hoc committee decided to refer the agreement to the prosecution service and the State Agency for National Security so that the competent institutions can take the necessary measures. In plenary, the Bulgarian Socialist Party will move for firing the Bulgargaz directors. A year and a half later they remain in their offices and it is hard to imagine them renegotiating this odd contract they have signed themselves, said he. He added that all committee members agree on what needs to be done.

The Bulgargaz-BOTAS deal

Signed in January 3, 2023, the agreement granted Bulgaria access to the Turkish LNG terminals for 13 years and gave access to BOTAS to the Bulgarian gas transmission network. 

Financial details were not available.

Then Bulgarian caretaker Minister of Energy, Rossen Hristov, said that it made it possible for Bulgaria to purchase gas from all global producers and unload it in Turkiye. He called the signing “a historic moment”. In a TV appearance several days later, he said that the agreement was “a great breakthrough for the EU because it provides for natural gas supplies through the Turkish terminals to Bulgaria and Europe”. "We have the European Commission's full support," he added.

The Turkish Minister of Energy and Natural Resources Fatih Donmez, said that the agreement would improve the security of natural gas supply in the Balkan region. The annual gas transfer would be 1.5 billion cubic metres, he said.

President Rumen Radev has called the signing “a historic occasion for both countries” and said it opened new, previously unthinkable prospects for cooperation.

The first LNG carrier for Bulgaria under the agreement arrived at the Marmara Ereglisi LNG terminal in Northwest Turkiye on April 12. Bulgarian caretaker Energy Minister Rossen Hristov and Bulgargaz Executive Director Denitsa Zlateva visited the terminal for the event. The LNG was supplied by the US company Cheniere Energy, which won a Bulgargaz tender.

Then in August 2023, then Energy Minister Rumen Radev of the Nikolay Denkov Cabinet, said that the 13-year agreement between Bulgargaz and BOTAS should not have been signed, particularly in the last weeks of the caretaker government.

In December 2023, the MPs established an ad hoc committee of inquiry to look into the matter.