Energy Crisis

Bulgaria reviewing gas transit contracts with Gazprom after delivery suspension

Bulgaria reviewing gas transit contracts Gazprom delivery suspension

Photo: Council of Ministers of the Republic of Bulgaria

Published

April 27, 2022

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Published:

April 27, 2022

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Russia’s Gazprom stopped sending gas to Bulgaria and Poland and warned them not to take the fuel destined for other countries from the pipelines. Bulgarian Prime Minister Kiril Petkov called the move a breach of contract and blackmail and said his government is reviewing all agreements with the company including those for gas transit. Some EU countries accepted the new Russian terms of payment.

Gazprom said today that it halted gas deliveries to Bulgaria’s Bulgargaz and Poland’s PGNiG as they didn’t pay for the fuel in rubles for April. The Russian state-owned company added that it informed the two counterparts the suspension of supply would last until they pay in an appropriate way.

“Bulgaria and Poland are transit states. In case of unauthorized offtake of Russian gas from the volumes intended for transit into third countries, the transited supplies will be reduced by the volume that was offtaken,” the announcement reads.

Petkov: We will not succumb to such a racket

Prime Minister of Bulgaria Kiril Petkov said his government was prepared for the current scenario, securing alternative sources, and that consumers wouldn’t be affected by any reductions, Novinite reported.

“Their suspension of the gas flow is a gross violation of contract and it is blackmail to implement a plan for payment in rubles through third parties, which wasn’t agreed and does not secure guarantees either for supply to Bulgarians or for their money. We will not succumb to such a racket… Bulgaria is also reviewing all agreements with Gazprom, including the ones on transit through Bulgaria, because unilateral extortion is unacceptable,” Petkov stated.

He added he spoke to his Greek counterpart Kyriakos Mitsotakis and that he told him the gas interconnection with Greece would become operational in June.

Bulgaria won’t cause gas transit disturbances for Serbia, Hungary

Minister of Energy Alexander Nikolov said shortly before that Bulgaria is a loyal partner to Serbia and Hungary. “Bulgaria is not Russia. When we have the opportunity, we will help all neighboring countries. We will not create artificial disturbances in neighboring countries,” he stressed.

Bulgaria won’t create artificial disturbances in Serbia and Hungary, according to Minister of Energy Alexander Nikolov

The payment procedure in two stages that Russia proposed carries substantial risk, in Nikolov’s opinion. “We would lose control over payments. It is unclear what exchange rate will be used. Thus, the Bulgarian side is at risk of paying for fuel without receiving it,” the minister added.

He asserted that deliveries to consumers are guaranteed for another month. Bulgaria paid its bill for April, Nikolov claims. In his words, the deliveries from Azerbaijan will be boosted on July 1.

Deliveries of Russian gas to Serbia unchanged

Serbia is still receiving Russian gas via Bulgaria, Deputy Prime Minister and Minister of Mining and Energy Zorana Mihajlović said. The volume is still at around six million cubic meters per day, against a consumption of 4.6 million cubic meters, as the weather is warm and the heating season ended, she underscored.

In case of an emergency, Serbia’s part of the Banatski dvor underground storage facility has enough gas for 21 days and the Russian part can cover 22 days, she said. Five million cubic meters can be drawn from there per day, Mihajlović asserted. She added she hopes Bulgaria wouldn’t take any gas that belongs to Serbia. The capacity of its pipeline from Greece is very low and “they didn’t make an arrangement with the Turks,” according to the deputy prime minister.

Von der Leyen claims EU is united but some are indirectly paying in rubles

European Commission President Ursula von der Leyen said Russia’s latest move shows it is an unreliable supplier and stressed that the European Union is prepared for the current scenario. “Europeans can trust that we stand united and in full solidarity with the Member States impacted in the face of this new challenge. Europeans can count on our full support,” she stated.

However, Austrian Chancellor Karl Nehammer said today that his cabinet and Austrian company OMV agreed to Russia’s terms of payment, and that Germany did the same, adding that it has been determined that the mechanism doesn’t breach sanctions. He later denounced reports from Russia that Austria agreed to pay in rubles as “fake news.”

An anonymous source close to Gazprom said four European buyers have already paid for gas in rubles and that ten companies have opened accounts for the purpose in Gazprombank

Hungary’s Minister of Foreign Affairs and Trade Péter Szijjártó said his country is still getting gas via Bulgaria and Serbia. The next payment date is May 22 and Hungary will pay in euros to Gazprombank, which will convert the funds into rubles, he pointed out.

Bloomberg reported, quoting an unnamed person close to Gazprom, that four European buyers already paid for gas in rubles and that ten companies have opened accounts in Gazprombank to meet the demands from the Kremlin. The article adds no more cutoffs are expected until at least the second half of May, when the next payments are due.

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