site.btaMPs Debate Impact of Bulgargaz-BOTAS Deal

A parliamentary hearing on Thursday exposed deep political divides and growing concern over the long-term consequences of the 2023 contract between state-owned gas supplier Bulgargaz and Turkish energy company BOTAS. Parliament heard Rossen Hristov, caretaker energy minister in 2022, Vladimir Malinov, executive director of gas operator Bulgartransgaz, and Deniza Slateva, former executive director of Bulgargaz, who headed the company when the contract was signed. The hearing clarified that there was no direct pressure from President Rumen Radev to conclude the 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 If the 13-year take-or-pay agreement is rescinded, the Bulgarian company will be liable for close to BGN 3 billion in damages. 

By a resolution passed on April 19, 2024, the Bulgarian National Assembly assigned then Energy Minister Vladimir Malinov to take action for re-negotiating the agreement.

Hristov said that the supply of LNG under the contract with BOTAS continues, and more than one tanker have already delivered gas to Bulgaria. “At [President] Rumen Radev's meeting with Turkish President Erdogan, we explained the need for stability in the region and for sources of natural gas other than Russia. With the assistance of President Rumen Radev, Erdogan instructed BOTAS to negotiate with Bulgaria,” he explained. According to Hristov, the natural gas supply crisis occurred because of the refusal of Bulgaria's previous regular government to pay Russian natgas supplier Gazprom. He called the hearing a political farce and argued that this contract was part of an overall strategy to supply non-Russian gas to Bulgaria. "I maintain that this is the best, if we want Bulgaria to be independent from Russian gas supplies, and I would again support such a contract," Hristov said. According to the former minister, Bulgaria should not give up on this contract, because strategically it was concluded correctly.

GERB-UDF MP Krasen Krastev stated that the agreement is not beneficial to Bulgaria and lacks economic logic. He called the hearing a political farce and argued that this contract was part of an overall strategy to supply non-Russian gas to Bulgaria. Rossen Hristov said he maintains that "this is the best, if we want Bulgaria to be independent from Russian gas supplies, and I would again support such a contract". According to the former minister, Bulgaria should not give up on this contract, because strategically it was concluded correctly.

Slateva, who headed the Bulgarian gas supplier at the time when the contract was concluded, stated that the contract was strategically important to Bulgaria.

Energy Minister Zhecho Stankov said during the hearing that terminating Bulgargaz’ contract with BOTAS would cost Bulgaria BGN 4.2 billion. He noted that at the time when the agreement was signed, it was obvious that Bulgargaz had a huge surplus of natural gas. Since 2021, the company has lost 50% of its market share. He stated that this agreement is causing Bulgargaz to suffer additional and significant financial bleeding. The Minister also reported that he has discussed potential natural gas supply with colleagues of his from Hungary, Moldova, Slovakia, and Austria.

GERB-UDF MP Delyan Dobrev said that the Bulgargaz-BOTAS agreement on natural gas supply has either been done in a most amateurish way by totally incompetent people or is the worst corruption scam. “We are ordering something that we don't need," he further argued. "It turns out that, without Bulgaria having waged a war on Turkiye, our energy sector has surrendered and we are paying reparations to Turkiye," Dobrev added. In his words, nobody will ever utilize this agreement because this service come at a quadruple or even quintuple the price charged in Greece for a similar service.

According to Movement for Rights and Freedoms - New Beginning leader Delyan Peevski, the hearing was a complete failure. "Do you expect the persons who robbed Bulgaria on someone's orders by over BGN 4 billion to confess to their crimes? They won’t do it", he commented.

Vazrazhdane MPs called the conduct of Hristov, Slateva, and Malinov during the hearing "arrogant". MP Yordan Todorov commented to journalists in Parliament that the worst thing is that in fact these people do not regret in any way, they do not even try to make sure that this deal is renegotiated, and the worst thing is that people will pay BGN 5 billion in the next 12 years and the deal in question cannot be renegotiated.

Radostin Vasilev, leader of Morality, Unity, Honour (MECh), told journalists that the agreement with Turkish energy company BOTAS is a corruption contract, harmful to Bulgarian citizens. "Because of such contracts, Bulgarian citizens remain poor. A government with a two-month mandate concluded a 13-year contract. The capacity under this contract cannot be utilized. There is no termination clause, no possibility of renegotiation," he emphasized. According to him, the prosecution service should look into the case.

BSP – United Left floor leader Dragomir Stoynev said the deal is clearly disadvantageous and blamed the lack of political dialogue and governance during the years of caretaker governments. He expressed his concern over the financial condition of Bulgargaz and called on the Minister of Energy to initiate a thorough legal analysis. "The big question is what is happening with the agreement with Azerbaijan. In the event of a severe crisis at Bulgargaz, preliminary talks with Azerbaijan must be held, lest something good for the country be permanently lost," he warned. The MP also expressed understanding toward Slateva, who, according to him, was not present at all negotiations and whose concerns about the BOTAS agreement were not sufficiently heard. "From here on, it is up to the competent authorities to give their assessment," he added.

CC-DB MP Radoslav Ribarski said that even though natural gas has not been transited through Ukraine for five months, the transmission capacity remains unused. He told reporters that while a year ago, the CEO of Bulgargaz was telling the parliamentary ad hoc committee on the BOTAS contract that there was no political pressure exerted on the case, on Thursday Parliament got an admission that the contract was approved at a political level. In his words, an opinion was requested, but the contract was not sent to the relevant ministries, which also never saw its clauses, yet the caretaker cabinet eventually approved the agreement. The only ministry that got to see the text was the Ministry of Energy. The MP told the media that the agreement was signed at ministerial level first, at which point it was sent to Bulgargaz. Even though the conditions proposed by the State-owned gas supplier were rejected, it did sign the contract, since the Council of Ministers had issued a decision on the matter. Ribarski clarified that the decision of the Council of Ministers was taken without anyone having actually reviewed the contract and added: "So a caretaker cabinet obliged Bulgaria with [BGN] 4 billion for 12 years without anyone having seen the contract or being able to take a position on it."