The contract between "Bulgargaz" and the Turkish state-owned company "Botas" continues to be one of the most controversial topics in Bulgarian energy. The issues surrounding the high costs, unused capacity, the financial condition of the state-owned gas supplier and the future of gas supplies after the ban on the import of Russian gas into the European Union are giving rise to serious debates. Is it possible for Bulgaria to renegotiate the unfavorable conditions, what are the risks surrounding the so-called Turkish Blend and can our country become a key transit center for natural gas in the region? Plamen Dimitrov from the Bulgarian Geopolitical Society spoke to FACTS on these topics.
- Mr. Dimitrov, What is the essence of the contract between “Bulgargaz“ and “Botaş“ and why does society continue to have the wrong impression that Bulgaria is buying Turkish gas?
- Yes, indeed, we can often hear that according to this contract Bulgaria buys gas from Turkey, but this is not true. The contract between “Bulgargaz“ and “Botaş“ is not for the purchase of goods, but for a service - regasification of liquefied gas and its transportation to the Bulgarian-Turkish border. This is a raw material that must first be purchased by the Bulgarian company on the international market and then directed to one of the Turkish terminals for unloading. However, the contract also has another aspect - “Botaş“ receives access to the Bulgarian transmission network and the gas market in Bulgaria, i.e. - the Turkish company can sell gas to Bulgarian end customers, and also and to transit its gas to neighboring countries through Bulgarian territory.
- Why does „Bulgargaz“ use only between 10 and 20% of the reserved capacity under the contract? Are the high fees the only reason, or are there other factors?
- The Bulgarian side uses a very small part of the capacity that it has undertaken to pay under the contract with „Botaş“. Traycho Traykov, who was Minister of Energy until May this year, mentioned this very percentage - between 10 and 20. For 2025 alone, „Bulgargaz“ reports that it used 23% of the capacity reserved at the Turkish terminals. The main reason for this is the high tariffs for regasification and transmission, written in the contract of January 3, 2023 with the Turkish company. According to some data of „Bulgargaz“ its It is three times cheaper to get liquefied gas from Greek terminals than from Turkish ones.
Proof of the unfavorable conditions under the contract with “Botaş“ is the fact that in the summer of 2024 “Bulgargaz“ announced a tender for the transfer of the reserved capacity of the Turkish terminals, but not a single participant showed up - apparently no one believes that it is profitable for them to pay the fees that the Bulgarian company has burdened itself with.
In addition, the current price of gas at European hubs is of great importance. Since the regasification and transmission fee paid to Turkey is a fixed amount, it did not have a particularly large impact on the final price of gas at the beginning of 2023, when the hubs' quotes were extremely high - over 100 euros per megawatt-hour. Then the market calmed down and in 2024, 2025 and the first two months of this year, the quotes of the main hub - TTF in the Netherlands, moved in the corridor between 30 and 35 euros per megawatt hour. And against this background, it may turn out that the use of Turkish terminals raises the price of gas by about a quarter - something that no buyer can afford.
- How economically justified is it for Bulgaria to pay for capacity that it practically does not use, given that it also has the terminal in Alexandroupolis, in which it has a 20% stake?
- This is a question that the authorities in Sofia should have asked themselves at the beginning of 2023, when the contract with “Botaş“ was signed. Long before that date, it was clear that Bulgaria had a long-term contract for the supply of Azerbaijani gas – 1 billion cubic meters per year. In September 2022, frightened by the energy crisis in Europe, the Bulgarian government decided to increase the capacity reserved by our country at the terminal in Alexandroupolis from half to one billion cubic meters per year. True, at that time this terminal was not yet operational, but there was already a date for the start of supplies through it – April 2024. In reality, it became operational in October 2024. As of today, it is clear that it is not profitable for Bulgaria to pay high tariffs for the use of Turkish terminals, since in Greece, in addition to Alexandroupolis, the terminal in Revitousa is also available and they charge lower regasification fees than "Botas". Of course, at the end of 2022 and the beginning of 2023, things looked a little different, then there was a shortage of capacity for receiving liquefied gas in Southeast Europe. But when a long-term contract is concluded, the development of the market for many years to come must be modeled, something that the then Bulgarian government clearly did not cope with. It is clear that it is not profitable for "Bulgargaz" to pay such a large capacity at Turkish terminals, but this is from a Bulgarian point of view. This contract is very profitable for the Turks, which is why it is logical that they do not want to change it.
- Bulgaria currently has a contracted import of natural gas that significantly exceeds domestic consumption. How did this over-reservation of capacity come about and who bears the political and managerial responsibility?
- Yes, let's calculate: 1 billion cubic meters per year from Azerbaijan plus 1 billion cubic meters through the terminal in Alexandroupolis and another 1.85 billion cubic meters from the Turkish terminals under the contract with “Botaş“. In total, this makes 3.85 billion cubic meters per year, and Bulgaria's consumption is now about 2.7-2.8 billion cubic meters. That is, if it fully realizes imports under the three contracts – with “Botaş“, Alexandroupolis and Azerbaijan (the Shah-Deniz consortium), “Bulgargaz“ there will be a surplus of at least 1 billion cubic meters per year. In reality, the surplus will be even more, because "Bulgargaz" has long ceased to be a monopolist on the Bulgarian gas market - the company's share has fallen to just over 60%. Some large buyers in Bulgaria, such as "Lukoil-Neftekhim", supply their gas through other intermediaries, and not from "Bulgargaz". Before talking about political responsibility, we must also consider the possibility that these gas surpluses are not a burden for "Bulgargaz", but a good asset from which the company can profit. For this purpose, the gas received, but not needed by Bulgaria, can be resold on international markets. However, it is clear that "Bulgargaz" does not have the necessary personnel capacity and self-confidence to behave like a truly large international gas trader. For many years, the company was something like an accounting firm, which was engaged in collecting money from Bulgarian consumers as a monopoly supplier and cashing in the invoices issued to it by the Russian company “Gazprom“. Today, the situation has changed radically - “Bulgargaz“ is no longer a monopolist on the domestic market, and “Gazprom“ is at least officially out of the game. Apart from that, “Bulgargaz“ has also been pushed to bankruptcy by the wrong decisions made at the political level by more than one or two governments.
- The financial report of “Bulgargaz“ indicates losses of over 250 million leva from the contract with “Botas“, as well as tens of millions more from unused capacity in Alexandroupolis. Can the company get out of this situation without state aid?
- No, it cannot. The main loss comes from the contract with “Botas“, but the refusal of part of the declared volumes at the Alexandroupolis terminal also brought a loss of 35 million leva last year. It is a small consolation that one fifth of this amount Bulgaria actually pays to itself, because through the state-owned company “Bulgartransgaz“ we hold 20% of the terminal in Alexandroupolis. “Bulgargaz“ has to take the huge sum of 763 million euros from Toplofikatsiya-Sofia, but this debt is uncollectible. So, overall, the liabilities significantly exceed the assets of “Bulgargaz“.
- Prime Minister Rumen Radev announced a freeze on the contract with “Botas“ until the end of September 2027. And then the EU plans to stop importing Russian gas altogether. Is this just a coincidence?
- The government did not announce the reasons for such a long transition period - 15 months, in which Bulgaria and Turkey will decide what to do with the contract between “Bulgargaz“ and “Botaş“. However, the good news for us is that during this period the Bulgarian company will pay only for the actually used capacity of the Turkish terminals. In my opinion, both countries are waiting for the serious change in the geometry of gas trade, which will occur with the entry into force of the complete ban on the import of Russian gas into the territory of the EU.
- What does Turkey actually get in exchange for this decision? Do you believe that after the European ban on Russian gas comes into force in the fall of 2027, Bulgaria could become an entry point for Russian gas, but with Turkish documents of origin?
- Yes, that's the question - what could Turkey get in exchange for agreeing to revise the contract between “Botaş“ and “Bulgargaz“ that is so profitable for it. Let's see what the gas market in our southeastern neighbor looks like. Several large gas flows converge on Turkish territory - gas comes from Russia, Azerbaijan and Iran via pipelines, and apart from that, there are five liquefied gas terminals (two in Thrace and three in Anatolia) with a total annual capacity of 51 billion cubic meters (but in reality only 15.8 billion cubic meters was used in 2025). To the west and northwest of Turkey is the best and most solvent gas market in the world - The European Union. It already receives very little Russian gas, and from September 30, 2027, the Russian raw material will be completely banned from import into the EU. Do you see the coincidence - the contract between “Bulgargaz“ and “Botaş“ is frozen until the end of September 2027!
I think that what Turkey may want from Bulgaria is precisely some scheme under which the Turkish side would export large quantities of gas to Europe through the Bulgarian transmission network. The delicate moment is that a large part of this gas will originate from Russia.
The Turkish-Russian gas connection is outlined by two direct pipelines across the Black Sea - “Turkish Stream“ (capacity 31.5 billion cubic meters per year) and “Blue Stream“ (16 billion cubic meters per year). The first one goes to the European part of Turkey, the second one – to the Asian one. Their total capacity is about 48 billion cubic meters per year. In 2025, Turkey used 21 billion cubic meters of Russian pipeline gas. The arithmetic is as follows – 48 minus 21 equals 27 billion cubic meters, which can be resold profitably in Europe. Why profitably? Well, because at the moment “Gazprom” produces more gas than it manages to sell, and it desperately needs markets. This means that the Russians will agree to prices slightly below market prices.
- How could Bulgarian institutions reliably verify the origin of the natural gas that will enter through Turkey, and is there a risk that our country will be involved in circumventing European sanctions?
- Certificates of origin for the gas will probably be requested, but this is a specific product, not some machines that have serial numbers. The gas molecules are not labeled. Turkey has already announced that it intends to export gas to Europe under the Turkish Blend brand, which can mix raw materials from Azerbaijan, Iran, Russia, liquefied gas terminals and its own Turkish production in the Black Sea. I assume that after September 2027, “Botaş“ will simply declare that there is no Russian component in this Turkish Blend, and that the entire amount of Russian gas imported into Turkey is consumed within the country.
– What would be the most reasonable way out of the situation – renegotiation, final termination, or turning it into an instrument for Bulgaria to become a real gas hub in the Balkans?
- The way out of this situation is very difficult. A complete termination of the contract is hardly possible. Rather, Bulgaria can insist on reducing the regasification fees, as well as the volume of reserved capacity. And in return, offer the opportunity to “Botaş“ to export gas through the Bulgarian transmission network. For this purpose, construction work will probably be needed to increase the transmission capacity of the entry-exit point of the Bulgarian-Turkish border. Turkey is interested in the large Ukrainian gas market, and possibly also in Ukrainian gas storage facilities, because the volume of Turkish storage facilities is insufficient. Bulgaria could be a gas bridge between Turkey and Ukraine. In addition, Ankara is also interested in the export of electricity through Bulgarian territory. Of course, opportunities should also be sought for “Bulgargaz“ to become a real trader and resell the gas for which it has supply contracts, but cannot place on the domestic market. In principle, a hub is the point where different gas flows change direction. Or the country that accumulates gas from different sources - imports through pipelines and terminals plus its own production. In this sense, Bulgaria is not a typical gas hub, but it has a well-developed transmission network and is a very important route for gas transit. Ultimately, the name “hub” is not the most important thing when our country can realize good revenues from gas transmission.