On 6 July, Bulgargaz and Türkiye’s BOTAŞ agreed to suspend the existing commercial terms of their contract for 15 months. During the suspension, Bulgaria will pay only for transmission capacity that it uses under revised conditions. The temporary arrangement follows an obligation that was previously linked to reserved capacity rather than utilisation.
Suspension terms and payment basis
The suspension is set to last 15 months, with payments limited to transmission capacity that is actually used. Revised conditions apply during the period, while the prior commercial structure is paused. The agreement also keeps Bulgaria’s access tied to the Turkish route through the same contractual framework.
The original contract was signed on 3 January 2023 and reserved approximately 106.4 GWh of daily capacity at Turkish LNG terminals and across the BOTAŞ network. Under that deal, Bulgargaz was required to pay around BGN1 million, or €512,000, every day regardless of utilisation. The contract runs until 2035.
Cost levels and arrears under the original deal
The fixed daily obligation equated to almost €187 million annually. If the same rate were applied across the 15-month suspension, it would imply a gross payment of approximately €234 million. The figure is not treated as a confirmed saving because amended variable charges, arrears treatment and final renegotiation terms have not been disclosed.
Bulgargaz was reported to have accumulated about BGN300 million, or €153 million, of arrears by early May. Under the original provisions, full termination could expose the company to damages approaching BGN3 billion, or about €1.53 billion. That risk is cited as a factor making renegotiation financially preferable to unilateral withdrawal.
LNG diversification option and commercial mismatch
The agreement was originally described as providing Bulgaria with a diversification option after the loss of direct Russian pipeline supply. Its weakness lay in the mismatch between large take-or-pay capacity and actual LNG flows. Gas imported through Türkiye became commercially unattractive once regasification and transmission charges were added.
This left Bulgargaz paying for infrastructure it rarely used under the reserved-capacity structure. The temporary reset is intended to preserve access to Turkish LNG terminals while the parties seek a permanent commercial structure. It also relates to liquidity considerations for the state supplier and potential effects on regulated Bulgarian gas prices.
Open questions for a permanent commercial structure
An unresolved issue is whether BOTAŞ will accept a durable reduction in fixed payments or instead seek compensation through higher variable tariffs. Other possibilities mentioned include an extended contract or settlement of historic claims. The value of the Turkish route will be assessed based on actual gas flows and competitive delivered prices rather than unused capacity on Bulgargaz’s balance sheet.
