Russian energy giant Gazprom halted gas supplies to Poland and Bulgaria on Wednesday (27 April) citing their failure to pay for gas in roubles, in the Kremlin’s toughest response yet to the crippling sanctions imposed by the West for its invasion of Ukraine.
Poland and Bulgaria are the first countries to have their gas cut off by Europe’s main supplier since Russia invaded Ukraine on 24 February in a military operation that has so far killed thousands, displaced millions more and raised fears of a broader conflict.
“Gazprom has completely suspended gas supplies to Bulgargaz (Bulgaria) and PGNiG (Poland) due to the absence of payments in roubles,” Gazprom said in a statement.
Warsaw and Sofia said the halt to supplies was a breach of contract by Gazprom.
Gazprom, which supplies around 40% of European gas, also warned that transit via Poland and Bulgaria – which host pipelines supplying Germany, Hungary and Serbia – would be cut if gas was siphoned off illegally.
Bulgarian Prime Minister Kiril Petkov slammed Russia for its “gas blackmail” but made it clear his country would not stop the deliveries of Russian gas across its territory to neighbouring Serbia.
Petkov also blamed his predecessor Boyko Borissov for having spent huge amounts of state funds on building the pipeline that brings Russian gas to Serbia and Hungary.
Before Russia started delivering gas via TurkStream to the European territory of Turkey and, in 2020, on to Bulgaria, Bulgaria was receiving its gas via Ukraine and Romania.
It was also transiting significant amounts of Russian gas to Turkey and getting substantial transit fees from Ankara.
Now it is Bulgaria that pays transit fees to Ankara.
It remains unclear why Borissov, who stepped down in 2021 following an electoral defeat, agreed to allocate more than €1.5 billion of state funds to building a pipeline that many believe is not in Bulgaria’s interest.
According to information received by EURACTIV, Borissov had been under Russian pressure, including ‘kompromats’, the most famous one being the photos from his bedroom showing drawers full of 500-euro notes and gold bars.
As a result, the Bulgarian section of TurkStream, dubbed ‘Balkan Stream’, was built in record time, at the expense of Bulgarian taxpayers.
Petkov said he had talked with his Greek counterpart, Kyriakos Mitsotakis, about completing the gas interconnector with Greece.
Reportedly, the physical implementation of the interconnector would be completed in June. Bulgaria counts on the Greece-Bulgaria interconnector to receive natural gas from Azerbaijan, as well as gas from LNG terminals in Greece and Turkey.
Depleted gas reserves
On Wednesday morning, Bulgarian Energy Minister Alexander Nikolov held an emergency briefing, saying alternative gas supplies were provided for the entire month of May and critical consumers of gas were not threatened.
However, he admitted that the country’s only gas storage, at Chiren, was only 18% full.
Bulgaria and the European Commission will hold talks on joint purchases of natural gas and discuss alternative supply routes, Nikolov added.
Bulgaria explained that Russia’s proposed gas payment procedure leads to a loss of control over Bulgargaz’s money in dollars because there is no clarity on the exchange rate of dollars to roubles.
“Bulgaria is a long-term loyal customer with a contract in dollars. There are bank details for payment this month. The suspension is a current breach of the gas contract. These are unilateral demands,” said Nikolov, who accused Russia of using gas as a political and economic weapon.
“Legally, Bulgaria is not in violation. As long as I am the minister, Bulgaria will not negotiate under pressure,” Nikolov said.
He also made it clear that Bulgartransgaz will not suspend transit supplies of Russian gas to Serbia and Hungary because Bulgaria is a loyal partner to all neighbouring countries.
“Bulgaria is not Russia and we will help all countries,” Nikolov said.
Some industry officials, however, expressed different views.
According to Vasil Velev, chairman of the Association of Industrial Capital in Bulgaria, Bulgaria should have opened an account with Gazprombank, on which dollars should be converted into roubles.
“The European Commission does not object to payments in such a way,” Velev said.
According to him, the Bulgarian government has overdone its efforts to please Brussels. In his words, there was no need to antagonise Russia because it would be Gazprombank to convert the dollars, to which the Commission has no objection.
Von de Leyen reacts
Poland and Bulgaria are now receiving gas from their EU neighbours after Russia’s state energy giant Gazprom turned off the taps, European Commission head Ursula von der Leyen stated Wednesday.
“Today, the Kremlin failed once again in its attempt to sow division among member states. The era of Russian fossil fuels in Europe is coming to an end,” von der Leyen said.
Bulgaria’s EU neighbours are Greece and Romania. There was no immediate information as to the new supplies.
[Edited by Zoran Radosavljevic and Benjamin Fox]