How much does the gas contract with « botash » cost

A Bulgarian state -owned company owes hundreds of millions of levs under a gas contract it cannot pay. The news came from the statement of the Minister of Energy Zhecho Stankov. But this is just the tip of the iceberg in a longer history. It is for the agreement with the Turkish state gas company Botash, concluded in 2023 under the Government of Pigeon Donev, appointed by President Rumen Radev.

The company cannot terminate the contract unless it pays the full amount – nearly BGN 4 billion. « He is made not to change, not to be interrupted, because the Damoclane sword of the penalties always hangs, » Ilian Vassilev, a former Bulgarian ambassador to Moscow and energy specialist Ilian Vassilev, told the Free Europe.

Several governments say they are trying to renegotiate the conditions, but so far this has not led to a result.

The agreement has long been criticized by experts and politicians who say it is unprofitable for Bulgaria. The question is whether it can open the door for imports of Russian gas to Bulgaria and Europe. In 2023, a temporary parliamentary committee was established to check the contract. In April 2024, Parliament decided to submit its report to the prosecutor’s office and to the State Agency for National Security (SANS). But there is no public information that they have done something since then.

And now the account is coming.

What is this contract

The agreement between the Bulgarian state -owned Bulgargaz and the Turkish Botash was signed on January 3, 2023. It envisages Bulgaria to pay Turkey nearly $ 500,000 per day for access to Turkish terminals for liquefied gas and for transmission under Turkish infrastructure.

The contract also provides for a change of fee depending on inflation. On Monday to BNT, Zhecho Stankov said that because of this 2025 the fee increased by BGN 50,000 a day.

The agreement is for 13 years and is worth over $ 2 billion or nearly $ 4 billion. In case of early termination, Bulgargaz will owe the full amount. It was signed on January 3, 2023 by the leadership of Bulgargaz and Botash in the presence of the then Minister of Energy Rosen Hristov and the then Turkish Minister of Energy and Natural Resources Fatih Donmez.

The document also provides for Botash to receive a reserved capacity in the Bulgarian gas transmission network, which is managed by Bulgartransgaz. This in practice means that the Turkish company can sell gas to end customers in Bulgaria.

The agreement itself is not publicly on the argument that it is a « trade secret ». This is a practice in the conclusion of such contracts.

Who concluded it

The document itself was signed by the then director of Bulgargaz Denitsa Zlateva and Botash Director Burhan Yozjan.

However, in the expired document stands the signature of Hristov. Later, it became clear that a separate agreement was signed by Vladimir Malinov-then the director of the gas transmission operator Bulgartransgaz, later the Minister of Energy Minister of Energy, and now again the director of the state-owned company.

What is the problem with the contract

The Botash Treaty has long been criticized by experts. They point out several major problems.

Bulgaria owes nearly $ 500,000 a day, whether it uses the transfer capacity it pays for or not. There is no information on how this price was formed.

According to the agreement, this fee is for imports of 1.85 billion cubic meters of gas per year. At the same time, Bulgaria can unload 14 tankers a year, which is only 1.3 billion cubic meters a year, the report of the parliamentary committee, which checked the contract. That is, Bulgaria cannot take full advantage of the capacity it pays for.

Until April 2024, when the parliamentary committee published its report, Bulgaria had submitted a tanker and a half gas.

At the end of March, Zhecho Stankov said, in response to a question from a MP that at the beginning of the year a tanker was diverted to a Turkish terminal because of the damage to the terminal in Alexandroupolis, which Bulgaria uses and in which it has shares.

There is no public information on other liquefied gas supplies through Turkish terminals.

« Bulgargaz » has not paid the contract fees for nine months because it cannot afford it, and owes BGN 250 million to Botash, said Energy Minister Zhecho Stankov. For 2024 – the first year for which the company owes full fees – it registered a loss of BGN 280 million, Stankov said. It not only comes from the contract with Botash, but it also has a role.

« This contract is practically immersing Bulgargaz, » said energy expert Ilian Vasilev.

Even when signing the contract, there were doubts that it could lead to the import of Russian gas to Bulgaria and exports to other countries in Europe, but « masked » as Turkish. The reason is that, according to Turkish legislation, the gas, which enters the Turkish gas transmission network, becomes Turkish, no matter what its origin is.

Turkey is one of the largest clients of the Russian Gazprom, and the signing of the agreement came against the background of the idea of ​​Turkey becoming a hub for Russian gas.

Bulgargaz claims that it does not buy Russian gas and that the delivery auctions requires that the source of liquefied gas is from a state without sanctions. But EU sanctions against Russia do not include Russian gas, which, according to the report of the parliamentary committee, means that the suppliers of Bulgargaz can also supply Russian gas.

How much is the account

According to the calculations on the basis of the terms of the contract as described in the report of the parliamentary committee, Bulgargaz must have so far paid nearly $ 270 million (over 480 million levs) to Botash. Some of this money is paid, others « Bulgargaz » owes.

Each month, the bill is increased by about BGN 30 million.

Can it be renegotiated

The agreement does not contain a renegotiation clause. If Bulgargaz terminates it early, it owes the full amount – over $ 2 billion.

However, parliament assigned a renegotiation of the agreement. Several governments say they are working to change the terms. So far, this has not resulted in a result. An expired letter quoted by Capital in August 2024 showed that Botash at that time rejected the negotiating demands.