Bulgaria Eyeing Working With Russia on Gas Again

Yes, this would be the same Bulgaria that just banned Russian Syria aid flights from its airspace - nobody said Sofia's policies have to make an ounce of sense - any they don't

This article originally appeared at Natural Gas Europe


Bulgaria's natural gas strategy over the past few years experienced impressive transformations from overly relying on Gazprom for a project such as South Stream, to outright hostility against Russia.

As of late, a new trend is emerging where Sofia is eyeing Russia again, while also appearing to be settings its sights on Iranian gas supplies.

Bulgarian authorities have already leaked their intentions of resurrecting the Nabucco project to media, which will now be centred on Iranian gas sources. The deals being made since 2013 between Bulgaria and Azerbaijan regarding gas quantities to flow from Shah Deniz via the TANAP-TAP-IGB system of pipelines are not enough for the long-term and for a diversification of the overall gas consumption in the country.

Meanwhile, Bulgaria is exploring a wide range of collaboration with Azeri SOCAR, having made clear its intention to attract investments from that company in the country. This includes underground gas depot construction and natural gas filling stations for vehicles however it was not specified whether new quantities needed will be sourced from Azerbaijan after all.

As such, the Iran option is fervently sought after and the Bulgarian embassy in Teheran has been in a steady round of discussions with all major energy players in the country.

It should be noted that the Iranian embargo is effectively still in place and even if lifted soon, it will take at least a decade before a pipeline is in place towards Europe. This is only if Teheran decides on the matter and if all major EU consumers back it both financially and politically.

Concurrently, it is no secret that the Middle East is in destabilization-mode including Turkey, the main transit route, being in a minor domestic war with its Kurdish minority. Teheran also has a specific aim of establishing its "Shia axis" with Iraq, Syria and Lebanon, thus creating a backlash from the Sunni Kingdoms in the Saudi Peninsula and Israel. It is highly unlikely that the national gas strategy of Bulgaria can wait for long until these complexities are sorted out, if ever.

Sofia prepares to reconcile with Gazprom

Recently, Bulgarian Ambassador to Moscow, Boyko Kotzev, relayed to RIA Novosti that a possible deal could be made between the two countries that will enable Bulgaria to become regional gas hub.

Furthermore, Mr Kotzev noted that both countries are considering options to deliver gas after the terminated South Stream project along with all officials are working hard to find a solution.

At the same time, Bulgarian Energy Minister Temenuzhka Petkova met with her Russian counterpart, Alexander Novak, during the proceedings of the St Petersburg Economic Forum where a proposal was laid down to use Russian gas in transit to Europe via Bulgaria so as to enact a new gas hub in the region.

The tone throughout Bulgarian media is gradually changing in favor of Russia as of late due to the assumption that eventually a Nord Stream 2 pipeline will be established, thus rendering all options for Bulgaria to play any significant role in the EU gas market.

In addition the proposed Tesla Pipeline which may include Greece, FYROM, Serbia and Hungary has been seen as a practical exclusion of Bulgaria from regional energy security developments, with further diplomatic ramifications as well.

All in all, it is only a matter of time before a high-level summit between Bulgaria and Russian stakeholders takes place to confront with the issues.

It should also be mentioned that an option has been reviewed in Moscow and Teheran is calling for an extension and linkage between the Russia-Armenia and Iranian-Armenia gas transmission systems and eventual export in bulk of Iranian gas via Russia to Europe. That would surely be a game changer but it is too soon to assess the validity and viability of such an option.

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