March 4. 2024. 8:31

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EXCLUSIVE: Gazprom and Bulgaria wrangle over gas bill

Bulgaria stopped receiving Russian gas after Gazprom cut supplies unilaterally last April, but are at loggerheads over the amount of the last bill, ЕURACTIV Bulgaria has revealed.

Responding to a request for information about “official claims by the Russian gas company Gazprom against the Bulgarian contractors”, the Bulgarian Energy Ministry acknowledged an ongoing conflict with Gazprom over the cost of Russian gas delivered to Bulgaria in April 2022.

“At the present time, there is ongoing correspondence between Gazprom Export and Bulgargaz related to the order and method of repayment of sums for delivered quantities of natural gas in April 2022 under the contract in effect at the time”, the ministry said.

‘Take or pay’

Bulgarian politicians previously warned that Bulgaria risks paying huge sums to Gazprom under the “take or pay” clause for the gas it was contractually committed to receiving, even though Gazprom discontinued supply after Bulgaria refused to open a rouble account for payments as Russia had demanded.

Take-or-pay stipulates that a buyer will take an agreed-upon amount of a commodity from a seller on a specific date or pay a fixed penalty fee.

First, it was the caretaker defence minister Dimitar Stoyanov who said Bulgaria would most likely have to pay $1 billion to Russia’s Gazprom if the Russian company decided to file a lawsuit.

Later, caretaker Energy Minister Rosen Hristov said Bulgaria “has no choice” but to start negotiations with Gazprom to resume supplies because it risked losing a possible arbitrage court case.

In its responses to EURACTIV, the caretaker Ministry of Energy says there is no information on a Russian decision to file an arbitration case against the Russian gas company for the suspended supplies and that no steps have been taken to prepare an arbitration claim from the Bulgarian side either.

But, the minister acknowledged that Bulgaria and Gazprom disagree over the amount of the April bill.

According to unofficial information, the dispute is over several million dollars. The Bulgarian side refuses to pay this sum, but the case has yet to enter the judicial phase.

Bulgargaz paid for the gas in advance, and the Bulgarian company insists that the delivery of less than the requested quantities in April is a failure from Gazprom to fulfil the request, which also means a lower price, according to the contract clauses. Reportedly the Russian side insists that a higher price must be paid.

Bulgarians will vote in a snap election on 2 April. The current caretaker government is accused by political opponents close to the former prime minister Kiril Petkov of being too accommodating to Russia.

‘We don’t owe anything to Gazprom.’

Former energy minister Alexander Nikolov, who served in Petkov’s cabinet, told EURACTIV in exclusive comments that Bulgargaz does not owe Gazprom any money and sharply criticised the caretaker cabinet for its attitude towards the Russian gas monopolist.

“Bulgaria did not take measures to protect its interests in connection with the suspended gas supplies from the Russian company Gazprom, and there is no prospect of filing a lawsuit”, he said.

According to him, Bulgaria has had enough opportunities to seek its rights against Gazprom in court and by joining collective claims, such as those initiated by Poland. Moreover, he has European support and allies on his side.

The former minister is confident Bulgaria emerged as a winner after the Russian state giant stopped gas supplies.

“Bulgaria won many allies and congratulations at the European and global level because of how it handled the situation. In contrast, the current minister several times argued how the sun would not rise without Gazprom”, said Nikolov, whose term as minister ended on 2 August.

After Gazprom cut supplies, Bulgaria massively increased imports from other sources, particularly Azeri gas via the newly inaugurated ICBG gas link with Greece, and re-gasified LNG from terminals in Greece.

Bulgaria no longer imports gas from Russia, but it continues to transit gas to Gazprom’s clients in Serbia and Hungary via the pipeline known as TurkStream in Turkey and BalkanStream in the region.