Despite Doomsday predictions, Bulgaria proves there is life after Russian gas

On April 27 Gazprom abruptly shut off the gas taps to Bulgaria and Poland, because the countries refused to pay for their contracts in rubles. It was a wake up call for Bulgaria, that was heavily dependant on Russian energy sources. Surprisingly enough the country quickly changed course and now gets most of its gas from Azerbaijan. This ended Russia's energy meddling for political purposes, explains Tony Wesolowsky for Radio Free Europe.

bulgarian gas pipelinesBulgaria ends gas dependance on Gazprom

by Tony Wesolowsky

Shortly after Russian President Vladimir Putin launched his country's unprovoked invasion of Ukraine on February 24, debate heated up in the European Union over how and when to end the bloc's dependency on Russian natural gas and oil.

For some states that are highly dependent on Russian energy, like Bulgaria, the move seemed like science fiction.

Speaking on March 8, Prime Minister Kiril Petkov made Bulgaria's position clear. 'We fully back the existing sanctions [against Russia]. We work with the EU [to ensure] that these sanctions have maximum power, but a thing that we cannot afford [to do] is to stop the import of oil and the import of gas,' he said.

Not only did Bulgaria rely on Russia for most of its natural gas, but its only oil refinery -- the largest in the Balkans -- is owned by Russia's LUKoil. Along with Gazprom, LUKoil wielded much political weight in Bulgaria, resulting, in part, in huge tax breaks.

However, Bulgaria -- along with Poland -- was forced to not only rethink energy strategy -- and fast -- but act when Gazprom abruptly shut off the gas taps on April 27.

Gazprom's stated reason for halting gas deliveries was the refusal by Poland and Bulgaria to pay in rubles, a unilateral decision taken by Russia just a month earlier in March even though its foreign contracts generally call for payment in dollars or euros.

But Petkov said on May 20 that one of Putin's goals was to bring down his government, which has steered a more EU-friendly course than previous Bulgarian governments.

bulgaria petkov meets kamela harrisBulgarian Prime Minister Kiril Petkov (left) meets with U.S. Vice President Kamala Harris in Washington. (picture press servive Bulgarian government)

Whatever the Kremlin's goals were, the move forced Bulgaria's hand. While just months ago Bulgaria might have been seen as too dependent on Russia to squawk, the country was now at the forefront of the EU's pivot away from Russia. The EU is aiming to cut its dependency on Russian gas by two-thirds this year and end all Russian fossil-fuel imports by 2027 due to Russia's invasion of Ukraine.

New Pipeline, New Promise

Bulgaria's room to maneuver was due to an ever-changing energy market, including new pipelines and new opportunities offered by liquified natural gas (LNG).

Sofia has proved it is not only possible, but due to Gazprom's price manipulation to exert pressure on the EU, it makes economic sense, explains Georgi Angelov, an analyst at Sofia's Open Society Institute.

'Over the last 20 months or so, Russian natural gas, that had cost about nine euros per megawatt, now costs about 90 euros, which is about 10 times higher,' Angelov recently told RFE/RL's Bulgarian Service. 'Russia has begun artificially cutting supplies to Europe to force up prices; that is something that hadn't happened before.'

A big part of Bulgaria's bold new energy plans is a small pipeline.

The Interconnector Greece-Bulgaria (ICGB) pipeline, linking Komotini in Greece's northeastern province of Thrace with Stara Zagora in central Bulgaria, is expected to start pumping gas in both directions in July.

A small link in Europe's vast network, construction began in 2019 on the new 180-kilometer pipeline, which promises to bring energy security to a wider swath of Europe. The new interconnector is fused with the newly built Trans-Adriatic Pipeline (TAP), which carries gas from Azerbaijan, and suppliers of LNG that arrives by ship, likely to include Qatar, Algeria, and the United States.

TAP is the final leg of the 3,500-kilometer-long Southern Gas Corridor, which brings gas from Azerbaijan's giant Shah Deniz II field in the Caspian Sea. The Southern Gas Corridor was built to diversify the European Union's gas supply and reduce the number of EU countries that have a single supply source, namely Russia. Southern Europe can receive Azerbaijani gas via TAP to Italy and the Trans-Anatolian Natural Gas Pipeline (TANAP) through Turkey.

'The interconnector with Greece would allow us to receive in much-larger-than-now-possible volumes of gas from Azerbaijan, which currently comes through the [TAP] and TANAP gas pipelines through the reverse connection with Greece,' Assen Vassilev, a deputy prime minister and former energy minister, told RFE/RL's Bulgarian Service in 2021.

The Gazprom Lobby

Plans to build the interconnector first emerged in 2009, when Russia cut off midwinter gas supplies to Ukraine in a payment dispute. However, a lack of backers other than Sofia and Athens meant the project was mothballed.

Domestic politics -- and Gazprom's ability to influence them -- have played a role in the delay as well. Gazprom was able to use its monopoly position inside Bulgaria to put pressure on Bulgarian politicians and those close to then-Prime Minister Boyko Borisov to delay the project, contended Traicho Traikov, a former government minister for energy, in an interview with RFE/RL.

He and others note that while the ICGB was plagued by delays, another pipeline in Bulgaria -- a 474-kilometer project from Bulgaria to Serbia that connects with Russia's TurkStream pipeline -- was built in just over a year amid questions over the cost.

That project is now being investigated, Petkov recently announced, saying it served Putin's interests to bypass Ukrainian gas routes. 'This type of project is exactly what is being talked about when corruption is used as a foreign-policy tool by Putin,' Petkov said on May 12, a day after returning from a visit to the United States.

bulgaria gas pipelineGreece/Bulgaria gas pipeline between Stara Zagora and Komotini will be operational by the end of 2022 (Source ICGB)

Despite the past setbacks with the ICGB, the emergence of the Southern Gas Corridor as a strategic priority for the EU has catapulted the project up Bulgaria's political agenda in recent years. 'The Southern Gas Corridor project gave ICGB a big push. ICGB makes much more sense if it's part of a transit route to Ukraine's border and part of an integrated regional market,'Teodora Georgieva, executive officer of the company overseeing the ICGB project, recently said.

Up until the cutoff by Gazprom, Bulgaria imported 77 percent of its gas from Russia. That serious dependency, however, doesn't translate into huge gas-shipment numbers. In recent years, Bulgaria has consumed about 3 billion cubic meters of gas a year. That's 30 times less than leading gas consumer Germany, according to 2020 data from the EU statistics agency Eurostat.

Data from the Bulgarian Energy Ministry shows that figure dipping below 3 billion cubic meters in 2019 and 2020.

Natural gas is also only a small slice of Bulgaria's energy pie. In 2019, it represented 12.9 percent of the country's energy mix. That puts Bulgaria at the bottom of the EU in terms of dependence on gas. By comparison, Italy relies on natural gas for 38.6 percent of its energy, Eurostat data shows. For Hungary, the figure is 31.7 percent, Romania 27.9 percent, and Austria 22.1 percent.

And most of the gas Bulgaria uses, two-thirds of it, in fact, goes to heating businesses and homes during the winter months, according to Bulgargaz, the Bulgarian state gas company.

Replacing Russian Deliveries

Given that it does not consume much gas, Bulgaria does not, in theory, face a huge challenge replacing Russian deliveries. In fact, all of Bulgaria's gas needs could be met by shipments from Azerbaijan and one shipment a month of LNG, analyst Angelov estimates.

Bulgaria has already secured a contract for 1 billion cubic meters of natural gas from Azerbaijan -- and negotiations with the Azerbaijani energy giant SOCAR are said to be ongoing with an eye to tripling that amount to 3 billion cubic meters, which just happens to be the annual capacity of the ICGB.

Sofia has also been busy securing LNG supplies as well. Petkov said on May 11 that Bulgaria had agreed to purchase two shipments of LNG for June from the United States and that talks were ongoing to seal a long-term contract.

The U.S. gas will come at a better price than Gazprom's, Petkov said upon his return from Washington, where he met with U.S. Vice President Kamala Harris and other U.S. officials.

The shipments were not part of the U.S. plan to supply 15 billion cubic meters of LNG to the EU this year to help wean it off Russian energy supplies, Petkov said. 'We have negotiated deliveries specifically for Bulgaria, which also showed the support of our partners,' he said, adding that the LNG gas will come either from neighboring Greek or Turkish terminals.

For Bulgaria, the task now is to make sure gas supplies at an underground storage facility in Chiren, in northwestern Bulgaria, are adequately filled ahead of next winter, Angelov says.

'By the beginning of the summer, we should have filled Chiren, which is very important to cover supply problems, and we should be working with our neighbors to see whether any infrastructure projects can be launched.'

This article was first published by RadioFreeEurope/Radio Liberty. 

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