site.btaUPDATED Sofia City Prosecution Office Takes Investigative Actions Related to LNG Contract with BOTAS of Turkiye

Investigative actions are being carried out within a pretrial proceeding by the Sofia City Prosecution Office regarding a LNG contract with BOTAS of Turkiye, the Sofia City Prosecution Office told BTA. They added that operation is being conducted at the Energy Ministry, public gas supplier Bulgargaz, and Bulgartransgaz, as well as at addresses of private individuals.

The prosecution office specified that procedural-investigative actions are being carried out with the aim of collecting and verifying evidence. Letters have been sent requesting documents from the Ministry of Energy, Bulgargaz, and Bulgartransgaz. "Due to urgency, a search is being conducted at the residence of R.H. with the purpose of discovering, documenting, seizing, and preserving objects and items that may be of relevance to the case," the prosecution office said.

The pre-trial proceedings were initiated by a decree from a prosecutor at the Sofia City Prosecutor’s Office on August 16 of last year, based on materials submitted to the prosecution following an inspection by the State Agency for National Security.

The subject of the investigation is the contract between the Bulgarian company Bulgargaz and BOTAS, the circumstances surrounding its conclusion, and whether the contract caused damage to the State.

The investigation concerns the allegation that in December 2022, an official failed to exercise due diligence in the management, administration, and safeguarding of entrusted property during the conclusion of the contract, resulting in significant damage to Bulgargaz. The offense is classified as causing major damage and constituting a grave case.

Numerous specific instructions for the collection of evidence have been issued and are being carried out by the Counter-Corruption Commission under the direction and supervision of the Sofia City Prosecution Office.

The Bulgargaz-BOTAS deal

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.

Energy Ministry ordered to provide full cooperation

Energy Minister Zhecho Stankov has ordered the Ministry's administration to provide full cooperation to the authorities in the probe into the deal with BOTAS, the Ministry press office said. They will provide all available documents and information, according to the press release.