Iran Energy News Oil, Gas, Petrochemical and Energy Field Specialized Channel
Related Articles
Bulgaria said it may halt the transit of Russian natural gas to central Europe if Gazprom PJSC doesn’t find a payment solution amid US sanctions.
It’s the latest twist in a saga over the future of European energy supplies, with gas demand poised to rise over the winter months. The region still receives some fuel from Russia via pipeline, and any potential disruption could ripple through the broader market.
Bulgaria hosts a pipeline extending the so-called TurkStream network, allowing the transit of gas to Serbia and Hungary, with most of the capacity booked by Gazprom. However, the Russian gas giant uses Gazprombank — subject to US sanctions — to pay state-grid operator Bulgartransgaz, raising questions about the reliability of supplies.
“Bulgartransgaz will strictly fulfill its contract and won’t allow the transit of natural gas if the service hasn’t been paid for,” Energy Minister Vladimir Malinov told reporters in Sofia, the capital. It is the duty of “the company that has booked capacity and has paid via Gazprombank to find a solution, if it wants to receive this service,” he said, referring to Gazprom.
Earlier this month, Russia was forced to change the procedure for foreign buyers to pay for its gas over concerns that the US sanctions would lead to a supply halt.
The European Union is exploring ways to mitigate the effect of the sanctions to preserve Russian supplies to the bloc. Hungary expressed concerns that the measures threaten energy security and submitted a request to the US for a waiver.
The pipeline through Bulgaria carries almost 18 billion cubic meters annually to Serbia and Hungary. Some of these supplies also serve other countries in the western Balkans. Bulgaria has received transit fees amounting to more than $750 million since the link was fully launched in early 2022.
Future Supplies
Bulgartransgaz has so far received all due payments, according to Malinov, noting that “there’s still time” to settle as the US sanctions take full effect Dec. 20. The supplies for December can be secured, he added.
“From now on, we’re awaiting the proposal of Gazpromexport,” the export unit of the Russian supplier, Malinov said.
Bulgaria, along with Poland, was among the first countries in the EU to get cut off from Russian pipeline supplies in April 2022 after the Kremlin demanded payments for deliveries to be made in rubles. Last year, the Balkan nation tried to apply a tax of about 20% of the price on all Russian transit, but was forced to give up on the levy under pressure from Hungary.
Separately, a transit agreement for Russian gas to other EU nations via Ukraine expires at the end of the year, raising further questions about continued flows. Once that agreement expires, TurkStream is effectively the only significant source of Russian pipeline gas for Europe.
