site.btaState Agency for National Security Questions Former Caretaker Energy Minister Hristov about BOTAS

Former caretaker energy minister Rossen Hristov was questioned about Bulgaria's contract with the Turkish energy company BOTAS at the State Agency for National Security on Thursday evening. The problem is the implementation of the contract, he told journalists in response to a question after the interrogation.

On January 3, 2023, the Bulgarian state-owed natural gas supplier Bulgargaz and Turkish energy company BOTAS signed an interconnection agreement, under which the Bulgarian side booked capacity of 106.4GWh/day on the Turkish LNG regasification terminals and agreed to pay for this BGN 1 million (EUR 512,000) daily for a period ending in 2035. At present, Bulgargaz does not import gas under the agreement with BOTAS, and in early May its arrears to the Turkish company approximated BGN 300 million. If the 13-year take-or-pay agreement is rescinded, the Bulgarian company will be liable for close to BGN 3 billion in damages. In December 2023, the MPs established an ad hoc committee of inquiry to look into the matter. On April 11, 2024, the committee decided to refer the matter to the prosecution service.

"The question is why the contract is not being fully used. One of the likely reasons is the change in the market conjuncture. By 2022 everyone in Europe was saying that we should give up Russian gas supplies immediately. Within a very short time - less than a year - the whole of Europe was to be 100% independent of Russian gas supplies and, in general, of Russian energy sources. Over time, not only has this not happened, but now, rather evasively, all those who were very aggressive at the time and made firm demands, including the European Commission (EC), Bulgarian politicians, are all now postponing this - currently until 2027, and until then, we do not know what will happen. This is a radical change in the situation, this gives the opportunity for Russian gas to regain part of its market position, therefore reducing the demand for non-Russian gas and therefore the demand for infrastructure to deliver this gas, not only to Bulgaria, but also to Central and Eastern Europe, where the countries that are highly dependent on Russian supplies are concentrated," Hristov said.

He reiterated that the problem is not with the contract. "Absolutely everything was respected at the signing and it was strategic and still is," Hristov said. "The refusal of Russian gas is not cancelled, it is just postponed in time. Throughout its history, the contract is likely to prove extremely important for Bulgaria both financially and strategically," Hristov said.

What can be done at the moment is active negotiations in this transit period to possibly reduce payments or replace them with something else, he said. "It is a practice in the energy sector to renegotiate long-term contracts when they deviate too much from market conditions, even though there are no such clauses in them. Parties always look at long-term cooperation and don't look to maximize some momentary gain. I am sure that our Turkish colleagues view Bulgaria in the same way - as a long-term strategic partner. They are also important to us, so we can always find common ground, we need to work actively on the basis of clearly demonstrated changes in the market," Hristov argued.

Hristov said that he was asked questions during the interrogation, which he has already answered, adding that he hoped they were able to give more details so that the investigation could move faster and the case could be closed. He added that there was no new information on the case. He added that he was assured that there was no political background and this was a procedure that had been going on for a long time. "I sincerely hope that there is none and that it is concluded soon with all the necessary information being analysed," Hristov added.

This action happened because the public comments had to end somehow and the easiest way was to end with a pre-trial proceeding, said Hristov's lawyer Lyudmil Rangelov. According to him, there is no way to satisfy public opinion without such an investigation.

Rangelov did not confirm that a sum of EUR 80,000 was found in Hristov's home.