Can power change in Bulgaria deal a blow to energy cooperation with Azerbaijan? Speculations about suspension of negotiations already surfaced

Bulgaria is embroiled in a political crisis following the resignation of the government led by Prime Minister Kiril Petkov on August 2 and his shoes being filled by Galab Donev, who was sworn in on the same day as the premier of the caretaker government having the hand of President Rumen Radev on his shoulders.

The crisis was fueled by the Bulgarian people’s mistrust of the new authorities over their alleged intentions of rapprochement with Russia and its energy giant Gazprom.

On August 10, hundreds of Bulgarians took to the streets of the capital Sofia to voice fears that the new caretaker government could abandon the policies of its pro-Western predecessor and return to Russia’s energy orbit. The protests took place amidst growing disturbance in European Union and NATO member Bulgaria that the motives for the dethronement of the previous, pro-Western government, which were linked to its hard stance on Russia’s invasion of Ukraine, could be pushed aside by Donev’s government for the sake of smoothing ties with Moscow.

The sour relationship of former PM Petkov’s administration with Russia took a nosedive in late April when Gazprom cut off gas supplies to Bulgaria due to Sofia’s refusal to pay for purchases in Russian roubles. Petkov has subsequently expedited the search for alternative imports and pinned the resources of Azerbaijan as one of the key alternatives to fill the gap left after Gazprom’s cessation of exports.

Bulgaria agreed to buy one billion cubic meters (bcm) of gas from Azerbaijan annually based on an agreement signed in 2013. But due to the delay in the construction of the Interconnector Greece-Bulgaria (ICGB) pipeline, an offshoot to the Southern Gas Corridor (SGC) mega gas pipeline, Bulgaria received only a third of the contracted gas volume from Azerbaijan on SGC.

On July 22, Petkov landed a deal with the Azerbaijani authorities on the purchase of additional volumes of natural gas. He then said that Azerbaijan could annually sell Bulgaria, in addition to the previously contracted volume, from 500 million to 1 billion bcm of gas. One bcm of Azerbaijani gas, which could meet one-third of the Balkan country’s overall annual demand for natural gas, was expected to reach Bulgaria on ICGB starting on September 1, 2022.

However, Petkov’s resignation sparked speculations about how the new government will evaluate his attempts for decreasing dependence on Russian supplies through alternatives. Media reports even claimed that the caretaker government already suspended the negotiations with Azerbaijan, initiated by the Petkov government, "until the new team is acquainted with the details of the agreements reached."

In the meantime, in response to Petkov’s unfinished strategy, in the first public statement, the current caretaker government indicated that Bulgaria could restart talks with Gazprom to avoid natural gas shortages later in the year. The country’s acting Energy Minister Rosen Hristov said on August 8 that the government has already carried out a risk analysis, and the resumption of negotiations with Gazprom could help ensure that “supplies are stable, at the best price, and as safe as possible.”

In addition, he said deliveries through terminals in Türkiye and increased imports from Azerbaijan were among the options reviewed by Donev’s government. The Energy Ministry of Bulgaria confirmed in a statement the minister's remarks about the priority of alternative supplies, calling the reports on suspending negotiations for natural gas purchase with Azerbaijan "fake news".

However, Hristov’s predecessor Alexander Nikolov said despite his attempts to provide his successor with information about the details of negotiations with the Azerbaijani side, the new administration team was obviously not interested in this. The Bulgarian media also reported that Hristov cancelled new appointments in the ICGB AD company, the operator of the Greece-Bulgaria (IGB) gas interconnector, which is a mandatory condition for the certification and commissioning of the gas pipeline, set by the regulatory authorities in Bulgaria and Greece.

The director of the Bulgarian energy company Bulgargaz, Lyudmil Yotsov, said the commissioning of the ICGB gas pipeline could be postponed until October or shelved to a later date due to shortcomings and difficulties with project certification, which could challenge the purchase of additional supplies of Azerbaijani gas in the near future.

Caliber.Az is closely following the issue and will provide additional information on further developments.