Bulgaria has said it may suspend Russian gas deliveries to Central Europe if Gazprom fails to find a payment solution amid US sanctions.
This is the latest twist in the future of European energy supplies, with gas demand set to rise in the winter months. Europe still receives Russian gas via pipelines, and any potential disruption could impact the common market, according to Bloomberg.
Bulgaria has the TurkStream pipeline to transport gas to Serbia and Hungary, with most of the pipeline's capacity laid by Gazprom.
However, Gazprom uses Gazprombank to pay its operator Bulgartransgaz. Gazprombank is currently subject to US sanctions.
“Bulgartransgaz will strictly implement the contract and will not allow gas transportation if the service has not been paid for,” Energy Minister Vladimir Malinov told reporters in the capital Sofia.
Earlier this month, Russia was forced to change its gas payment procedures for foreign buyers amid fears that US sanctions would lead to a halt in supplies.
The European Union is also looking to mitigate the impact of sanctions to ensure supplies of Russian gas to the bloc. Hungary has expressed concern that the measures threaten its energy security and has asked the US for an exemption.
The Bulgarian pipeline carries nearly 18 billion cubic meters of gas to Serbia and Hungary each year. Some of the gas also serves other countries in the western Balkans. Bulgaria has received transit fees of more than $750 million since the pipeline was fully operational in early 2022.
According to Minister Malinov, Bulgartransgaz has received all the payments due so far. He also noted that “there is still time” to resolve the issue when the US sanctions come into force on December 20. He added that gas supplies for December can be guaranteed.
“We are waiting for a proposal from Gazpromexport” - the Russian supplier's export unit, he added.
Bulgaria, along with Poland, was one of the first EU countries to be cut off from Russian gas supplies via pipeline in April 2022 after the Kremlin demanded payment in rubles. Last year, the Balkan country attempted to impose a tariff of around 20% on all transited Russian gas but was forced to abandon it under pressure from Hungary.
Additionally, a transit agreement for Russian gas to other EU countries via Ukraine expires at the end of this year, raising further questions about the ability to continue Russian gas flows. Once the transit agreement via Ukraine expires, TurkStream will effectively be the only significant source of Russian pipeline gas to Europe.
