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Deal on gas supplies to Bulgaria and Turkey may be a cover for Russian gas imports

According to former US diplomat Matthew Bryza, the contract of Bulgarian company Bulgargaz to supply gas via Turkey could be a cover for importing Russian natural gas to Europe in defiance of sanctions.

He made this statement immediately after the information about the European Commission’s inspection of the transaction for possible violation of the EU antimonopoly rules appeared. Representatives of Bulgargaze confirmed the fact of the inspection, but the company said that the EC would also check other deals. Bryza gave an in-depth interview to the Capital news outlet, where he said that a major liquefied natural gas (LNG) deal had failed after an agreement between Bulgargaz and Turkey’s Botas. Bryza said:

Until recently, I was working on a draft liquefied gas (LNG) contract between Turkey and the United States. I was looking for a way and permission to provide American LNG from Texas to the Botas system in Turkey and then to reach Bulgaria. But the deal with US companies fell through when the agreement between Bulgargaz and Botas was announced. The Turkish state changed its mind, and this was surprisingly reported to me by the ministry.

He added that Botas only gives access to its network to a Bulgarian company, so the deal between Bulgaria and Turkey creates a monopoly on the gas network. Moreover, under the terms of the deal Bulgaria can import any gas from Boat without requiring Turkey to disclose its origin. Bryza added:

This is killing the possibility of fair competition and is an attempt to mask the import of Russian gas. I am sure that this is part of the plan of [Russian President] Vladimir Putin who talks about a gas hub in Turkey and can easily take advantage of such a deal with Bulgargaz.

In the letter, the EU Directorate General for Competition asked Bulgargaz to send a full list of documents, including information regarding supply agreements with the Turkish company Botas and capacity reservation at the Turkish-Bulgarian border. The company will also have to provide information on contracts agreed or under negotiation in which Bulgargaz may act as exclusive agent or distributor for gas supplies to Bulgaria or other EU member states.

There is a concern that Bulgargaz may be the only company in the EU with access to natural gas through Turkish infrastructure and is possibly acting as an intermediary for gas produced in Turkey and transported to the region.

The deal between Botas and Bulgargaz was announced in January. At the same time, the European Federation of Energy Traders expressed concern about possible competition violations.

As a result of the general election in April, the Bulgarian government that came to power launched its own investigation into the supply deal, which was signed by the former interim government led by Gulub Donev. The government said the enquiry was part of a wider review of the previous interim government. The probe was prompted by suspicions that the Donewa government’s actions were not transparent and cost the country billions.

The 13-year agreement between Bulgargaz and Botas allows them to share the daily capacity of the Strandzha-Malkolkar border crossing.

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