Bulgaria, Turkey gas supply deal could be coverup for Russian gas imports, US ex-diplomat says

Bulgaria, Turkey gas supply deal could be coverup for Russian gas imports, US ex-diplomat says
Bulgaria’s gas incumbent Bulgargaz signed a deal earlier this year to access gas supplies via Turkey.
By Denitsa Koseva in Sofia October 23, 2023

A contract signed by Bulgaria’s gas incumbent Bulgargaz to access gas supplies via Turkey could be a coverup for imports of Russian natural gas in Europe despite sanctions, according to ex-US diplomat Matthew Bryza.

He made the suggestion a day after information emerged that the European Commission is probing the deal amid questions over potential EU competition rule breaches. The probe was confirmed by Bulgargaz, but the company said that the EC had questions about other deals too.

In an interview with Capital news outlet, Bryza said that a big liquefied natural gas (LNG) deal failed following the agreement between Bulgargaz and Turkey’s Botas.

“Until recently, I was working on a draft liquefied gas (LNG) contract between Turkey and the United States. I was looking for a way and permission to provide American LNG from Texas to the Botas system in Turkey and then to reach Bulgaria. But the deal with US companies fell through when the agreement between Bulgargaz and Botas was announced. The Turkish state changed its mind, and this was surprisingly reported to me by the ministry,” Bryza said.

He added that the deal between Bulgaria and Turkey creates a monopoly of the gas network as Botas gives access to its network only to the Bulgarian company. Moreover, the deal obliges Bulgaria to import any type of gas from Botas without demanding that Turkey reveal its origin.

“This is killing the possibility of fair competition and is an attempt to mask the import of Russian gas. I am sure that this is part of the plan of [Russian President] Vladimir Putin who talks about a gas hub in Turkey and can easily take advantage of such a deal with Bulgargaz,” Bryza said.

In a letter, revealed by ICIS, the EU Directorate-General for Competition reportedly asked Bulgargaz to send a comprehensive list of documents, including information related to supply agreements with Turkish incumbent Botas and capacity bookings on the Turkish-Bulgarian border.

It also asked Bulgargaz to submit information on contracts agreed or subject to negotiations in which Bulgargaz may be acting as an exclusive agent or distributor for gas supply to Bulgaria or other EU member states.

There is concern that Bulgargaz may be the only EU-based company with access to natural gas via the Turkish infrastructure and is possibly acting as an intermediary for gas secured in Turkey and transited to the region.

The deal between Bulgargaz and Botas was announced in January. At that point, the European Federation of Energy Traders raised concerns about possible competition breaches.

The Bulgarian government that came to power in an April general election has, meanwhile, launched its own investigation into the supply deal, which was signed by the former caretaker government led by Gulub Donev. It said the probe was part of a wider review of the work of the previous caretaker administration. The review was called over suspicions that actions taken by Donev's government lacked transparency and would cost the country billions.

Valid for 13 years, Bulgargaz and Botas’ arrangement allows them to split daily capacity at the Strandzha-Malkolcar border point.