Minister: Bulgargaz exists thanks to contract with Azerbaijan

Bulgaria's national gas company, Bulgargaz, is effectively bankrupt, and its only remaining operational stability is its long-term gas supply contract with Azerbaijan, which is extremely profitable for Bulgaria, Bulgarian Energy Minister Traycho Traykov said on Bulgarian National Radio, Report informs referring to Bulgarian media.

He stated that Bulgargaz is failing to fulfill its contractual commitments with the Turkish state-owned oil and gas company, BOTAS, which creates serious risks in the event of claims from Ankara.

Traykov also announced his intention to hold meetings with BOTAS experts and representatives to revise the terms of the agreement signed in late 2022. He emphasized that the situation on the European gas market may change significantly by the end of 2027, when Russian pipeline gas imports to the EU will be permanently discontinued.

Bulgargaz management attributes the company's difficult financial situation to the terms of its contract with BOTAS, as well as the debt of Toplofikacia-Sofia EAD, the main supplier of district heating and hot water in Bulgaria's capital.

The agreement with Türkiye provides access to liquefied natural gas terminals and supplies up to 1.5 billion cubic meters of gas annually, which exceeds the country's current needs and obliges the Bulgarian side to pay for reserve capacity. The contract runs until 2035.

Toplofikacia-Sofia's debt to Bulgargaz exceeds BGN 1.25 billion (approximately EUR 615 million).

Azerbaijan supplies natural gas to Bulgaria as part of the Southern Gas Corridor, a strategic route for diversifying supplies to Europe. The gas flows through the following infrastructure chain: the South Caucasus Pipeline (SCP) from the Shah Deniz field through Azerbaijan and Georgia to the Turkish border, then the Trans-Anatolian Natural Gas Pipeline (TANAP) through Türkiye to the Greek border. Then, the Trans-Adriatic Pipeline (TAP) passes through Greece and the 182-kilometer-long Greece-Bulgaria Interconnector (IGB), connecting TAP in the Komotini region with the Bulgarian gas grid in Stara Zagora.

The initial 25-year agreement, signed in 2013, provided for the supply of 1 billion cubic meters of gas per year. However, amid the energy crisis and Sofia's growing needs, volumes have gradually increased: in 2024, supplies reached 1.896 billion cubic meters, and in 2025, 1.931 billion cubic meters.

Azerbaijani gas currently covers 70% to 80% of Bulgaria's domestic consumption.

Since June 2024, the State Oil Company of Azerbaijan (SOCAR) has begun supplying gas not only to the operator Bulgargaz, but also directly to Bulgarian industrial enterprises. Direct supplies to the country's social infrastructure have also commenced since September 2024.