Bulgargaz files claim against Gazprom over lost gas supply

By Newsbase May 21, 2024

Gazprom faces another compensation claim for lost gas supply from a former European customer – this time Bulgaria’s state gas company Bulgargaz.

Bulgaria was one of a number of European countries to have their Russian gas supply cut off in 2022 after refusing to pay for volumes in rubles, as required under a Kremlin decree. At the time Bulgaria was almost entirely dependent on Gazprom for its gas supply, although since October 1 it has been able to secure alternative pipeline deliveries from Azerbaijan and LNG regasified in Greece thanks to the launch of the Greece-Bulgaria Interconnector.

Bulgargaz is seeking €400mn ($435mn) from Gazprom for losses incurred as a result of Gazprom halting supply, Bulgarian Energy Minister Vladimir Malinov announced on May 16.

“After more than two years of delay, the new management of Bulgargaz decided to demand compensation from Gazprom Export for losses in the amount of €400mn,” the minister said in a statement.

Bulgargaz will first try to collect the funds in a pre-trial process, according to Malinov. If Gazprom refuses, the company will file a claim at the International Court of Arbitration in Paris.

Russian gas supplies to Bulgaria were halted on April 27. The country annually consumes around 3bn cubic metres of gas, out of which it received at least 2.6 bcm of gas annually under a take-or-pay contract with Gazprom that expired at the end of 2022, via the TurkStream pipeline.

Companies from Poland, Germany, the Netherlands and Finland also had their gas supply cut off after refusing to pay in rubles, and buyers in other European countries also received less gas because Gazprom started restricting supply via the Nord Stream pipeline in the summer of 2022. A number of Gazprom’s former customers have filed claims against the Russian company, including Finland’s Gasum, Germany’s Uniper and RWE, Italy’s Eni and the Czech Republic’s CEZ.

While experts believe that these buyers stand a good chance of winning at international courts, it is unlikely that Gazprom will pay out the claims in light of the breakdown in economic and political relations between Russia and the West. Gazprom and other Russian companies have even filed their own suits at Russian courts to have international rulings on compensation declared void.

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