site.btaUPDATED Energy Minister: BOTAS Agreement Signed Without Need, Now Costing Bulgaria Millions

At the time of signing the contract with BOTAS there was no requirement for such an agreement, Energy Minister Zhecho Stankov told the Bulgarian National Television (BNT) on Saturday, explaining that this is one of the findings of the parliamentary committee, which he chaired.

Stankov noted that the state-owned company Bulgargaz knows by the end of each year how much gas its clients will need for the following year. He added that this was also the case at the end of 2022. Consumers needed 25 units of gas, 10 of which were covered by a long-term contract with Azerbaijan and 15 through contracts with two Greek companies that have long-term agreements with Gazprom. “When the President now shifts the blame onto us, claiming someone is still buying gas from Russian sources, I want to refute that,” said Stankov. It was during the caretaker government that contracts were signed with Gazprom’s intermediaries, who provided the additional 15 units, he added.

Stankov explained that this fully secured consumption and noted that, in addition, there were 4 units of gas from the underground gas storage facility. Yet at that moment, a contract with BOTAS was signed, providing additional gas units that were not needed. This led to 8,000 trades on the energy exchange the following year, 7,000 of which resulted in losses for Bulgargaz due to the surplus of unnecessary gas. In fact, there were even moments when those Greek companies delivered gas to Bulgaria, and that same gas was resold by Bulgargaz back to Greece at half price, said Stankov. "The bigger problem is that we left the Bulgarian state and the state company with zero debt and dependencies, and now we find it with BGN 1.8 billion in debt," he pointed out.

Since the signing of the contract in early 2023, it has only been used twice, with just 13% of the capacity utilized, Stankov said. "This vignette, for which we pay BGN 1.05 million every day, is only used at 13%, which means that by the end of the year we had paid nearly 400 million, of which we used just 13%," he stated. This cost was passed on in the form of higher heating prices because the high price we pay for transit through BOTAS inevitably affects the prices of goods and services, including energy, the minister said. “We’ve reached the point where in 2023 and 2024, exactly 13% of the capacity was used,” he added.

Stankov stated that he and the companies' management are doing everything possible to use more of the capacity so that there is not just an expense but also some benefit. "The capacity through BOTAS makes our gas nearly 30% more expensive. We can't find cheaper gas on the market because no one would be foolish enough to sell it to us at a lower price when they can sell it to us at 30% more. So we look for market moments when the price is expected to be lowest, to compensate for the high cost, but that doesn’t make the Botas contract better," explained Stankov.

He said the question of whether the contract is advantageous is no longer open. "I think all Bulgarian citizens understand the financial damage it has caused," Stankov said. “As for the claims that the Turks had better conditions to offer, I never received such conditions, this was the first I heard of them, from the President. But if those better conditions existed, why weren’t they used in 2023? Instead, we signed a 13-year contract with no termination clause and a billion-lev penalty, which burdens Bulgarian energy,” he said.

“We shouldn’t be discussing whether the BOTAS contract is good or bad; we should focus on renegotiating it to reduce the damage in a way that is sustainable for the state,” Stankov said, though he added that this would be extremely difficult since the Turkish side is profiting significantly from the contract and will be hard to convince to renegotiate.

The minister also noted that following Boyko Borissov’s visit to Turkiye and meeting with President Erdogan, dynamic technical meetings began between both sides. Two weeks ago, representatives from BOTAS were in Sofia for meetings with their counterparts at Bulgargaz and Bulgartransgaz. Stankov said he gave them a full mandate to find the best possible solution, as Bulgaria is entitled to renegotiate the contract once. "Now, we need to find the best formula to minimize the damage as much as possible," the minister concluded.