Bulgarian gas transmission operator Bulgartransgaz has cancelled a €56 million procurement for new production wells at the Chiren underground gas storage facility. The cancellation followed an outcome in which the only financially evaluated offer exceeded the available budget. The decision affects Bulgaria’s programme to expand gas storage capacity and support winter supply security.
Two bids were submitted to the procurement process, but only one advanced to financial evaluation. The offer for the first three production wells was priced at 21.37% above the operator’s estimate. The price proposed for an optional second package of three wells exceeded the projected budget by 17.75%.
Procurement outcome and next steps for the Chiren expansion
Bulgartransgaz decided not to award the contract based on the bid prices relative to budget limits. The operator said it will instead engage external experts to review alternative approaches for implementing the broader Chiren expansion. This follows a procurement process that had been launched in April 2026.
The April 2026 procedure was initiated after an earlier procurement covering the same works had also been terminated. Bulgartransgaz’s decision leaves the production-well component without a contracted implementation pathway under the cancelled tender process.
Cost assumptions and technical factors in underground storage projects
Repeated tender failures have highlighted the role of construction-cost assumptions and technical risk allocation in underground gas storage developments. Storage projects can be influenced by geological conditions, drilling performance, and access to specialised contractors and equipment. These elements are distinct from above-ground energy facilities in how project execution can be affected.
The procurement outcome does not specify whether those factors caused the difference between budgeted and offered costs. However, the gap between planned spending and bid pricing creates a need to reassess contracting and financing assumptions for the expansion.
Role of Chiren in winter demand management
For Bulgaria, expanding Chiren remains strategically significant for managing seasonal gas demand. The facility also provides an additional supply option when imported pipeline gas or LNG deliveries face disruption. Additional withdrawal capability could support responses to short-term regional supply pressures.
The immediate priority is identifying an implementation structure that can attract commercially acceptable bids while meeting the technical objectives of the expansion. Without a viable procurement solution, Bulgaria faces potential further delays to infrastructure intended to increase flexibility during periods of winter gas demand.
