On 6 July, Bulgaria’s state gas suppliers Bulgargaz and Türkiye’s BOTAŞ agreed to suspend the existing commercial terms of their contract for 15 months. During the suspension period, Bulgaria will pay only for transmission capacity that it uses, under revised conditions.
Suspension of contract terms and revised payment basis
The original agreement was signed on 3 January 2023. It 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.
The fixed daily obligation amounted to almost €187 million per year. If applied over the 15-month suspension at the same rate, it would imply a gross payment of approximately €234 million.
The potential reduction is not treated as confirmed because details on amended variable charges, how arrears are handled, and the final renegotiation terms have not been disclosed.
Arrears and exposure under original termination provisions
Bulgargaz was reported to have accumulated approximately BGN300 million, or €153 million, in arrears by early May. Full termination under the original provisions could expose the company to damages approaching BGN3 billion, or about €1.53 billion.
Given that level of potential exposure, renegotiation has been described as financially preferable to unilateral withdrawal. The suspension therefore changes the near-term payment structure while discussions continue.
Diversification through Türkiye route and remaining commercial questions
The agreement was initially positioned as a diversification option after Bulgaria lost direct Russian pipeline supply. Its operational weakness related to a mismatch between take-or-pay capacity and actual LNG flows through Türkiye.
Gas imported via Türkiye became commercially unattractive once regasification and transmission charges were added. As a result, Bulgargaz faced paying for infrastructure it rarely used.
The temporary reset is intended to support Bulgargaz’s liquidity and may reduce pressure on regulated Bulgarian gas prices. It also preserves access to Turkish LNG terminals while the parties seek 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, an extended contract, or settlement of historic claims. The value of the Turkish route will be measured by actual gas flows and competitive delivered prices rather than unused capacity on Bulgargaz’s balance sheet.
