Bulgaria renegotiates costly Turkish gas deal signed after Ukraine war

Bulgaria is seeking to renegotiate a significant gas supply agreement with Turkey's BOTAŞ, initially hailed as a strategic move for energy security following Russia's post-Ukraine war gas cutbacks. The 2023 deal allowed Bulgaria to import up to 1.5 billion cubic meters of natural gas annually over 13 years, aiming to reduce dependence on Russia and access global LNG markets via Turkey.

However, the agreement quickly proved to be a heavy financial burden rather than a reliable security instrument. Bulgaria was obligated to pay not only for the gas consumed but also for reserved capacity, a structure that seemed like insurance in 2023 but became costly when much of that capacity went unused. This led to the decision to suspend the contract for 15 months and renegotiate its terms.

Terminating the agreement could have incurred substantial costs, with estimates ranging from over 2 billion euros to approximately 4 billion Bulgarian lev ($2.3 billion). This financial predicament forced Bulgaria to pursue political and legal avenues to alter the contract's terms while still facing its obligations.

Separately, Bulgaria and Turkey have a different operational interconnection agreement signed in January 2024 between their transmission system operators. This agreement facilitates gas flow from Turkey to Bulgaria, supporting long-term objectives for regional energy access through Turkey's transmission system, and should not be confused with the commercial BOTAŞ-Bulgargaz contract.