European Commission launches probe into Bulgaria-Turkey gas supply deal

LONDON (ICIS)–The European Commission is investigating a deal allowing Bulgaria’s gas incumbent to access gas supplies via Turkey amid questions over possible breaches of EU competition rules, according to a letter seen by ICIS.

In the letter it sent earlier this month, the EU Directorate-General for Competition asked Bulgargaz to send a comprehensive list of documents, including information related to supply agreements with Turkish incumbent BOTAS and capacity bookings on the Turkish-Bulgarian border.

It also asked Bulgargaz to submit information on contracts that have been agreed or are negotiated where Bulgargaz may be acting as an exclusive agent or distributor for the supply of gas in Bulgaria or elsewhere in the EU.

The investigation comes amid concerns Bulgargaz may be the only EU-based company with access to natural gas via the Turkish infrastructure and potentially acting as an intermediary for gas secured in Turkey and shipped to the region.

When the arrangement was first announced in January, the European Federation of Energy Traders raised concerns about possible competition breaches.

The Bulgarian government that was formed following the April general elections also commissioned an investigation into the supply deal as part of a wider review into the work of the previous caretaker administration, on the grounds that it lacked transparency and would cost the country billions.

Bulgargaz did not respond to questions from ICIS by publication time.

USE OF BORDER POINT

Details of the deal were revealed by ICIS earlier this year.

The arrangement, valid for 13 years, allows Bulgargaz and BOTAS to split daily capacity at the Strandzha-Malkolcar border point. The interconnection was previously used to ship Russian gas into Turkey across the Trans-Balkan pipeline via Bulgaria.

Under the agreement, Bulgargaz can import LNG into Turkey and off-take a similar amount of regasifed gas at the border point. BOTAS can instruct Bulgargaz to have the LNG delivered either at Turkish terminals or elsewhere in Europe.

Furthermore, BOTAS can also ask Bulgargaz to book capacity via the Bulgarian transmission system for its own export needs either to Bulgaria or to ship volumes to neighbouring countries such as Romania, Serbia or Greece.

BOTAS announced a spate of new supply arrangements in recent weeks including with buyers in Hungary , Romania and Moldova. Volumes are expected to transit through Bulgaria.