The Bulgarian Energy Holding: The Bulgarian side cannot determine unilaterally or change the delivery point of Azeri gas

The contract for the supply of Azeri gas has been fully agreed with the Azerbaijani institutions and in line with the spare capacity of Komotini. This is stated in the position of the Bulgarian Energy Holding (BEH).

Last week, deputies from the rostrum of the National Assembly accused that during the previous government the supply of the entire amount of natural gas from Azerbaijan was not organized, and our country continues to pay for expensive Russian gas.

In this regard, the Bulgarian Energy Holding (BEH) circulated a position explaining that the agreement with the Azerbaijani side does not provide for the right of the Bulgarian side to determine the delivery points itself.

The contract for the supply of natural gas from Azerbaijan and the documents on its implementation stipulate that Bulgargaz EAD will receive the supplies at the Komotini point in Greece. This is the connecting point between the Trans-Adriatic Pipeline (TAP) and the Greece-Bulgaria Interconnection (IGB), through which natural gas is expected to reach Bulgaria.

The contract does not provide for the right of the Bulgarian side to unilaterally determine or change the delivery point, which means that a temporary change in the delivery point requires the consent of the Azeri supplier, said BEH.

In their position, the energy holding also clarifies the situation in connection with the ongoing construction of the Bulgarian-Greek gas interconnection.

Due to the ongoing construction of the interconnection, Komotini point was not put into operation as of the date of commencement of deliveries under the contract - 31.12.2020. and is expected to be put into operation in mid-2022. This necessitated negotiations with the Azerbaijani supplier, as a result of which an agreement was reached for temporary use of another supply point on the territory of Greece and transmission of natural gas to Bulgaria by alternative route for the period from 31.12.2020 until 30.09.2021. The possible quantities of natural gas were agreed with the Azerbaijani side, as well as the conditions under which they will be delivered to the temporary point. The free capacities, the applicable procedures and the trade conditions of all gas pipeline systems through which the natural gas passes on the alternative route to the Bulgarian gas transmission system were taken into account. Similar negotiations for reaching an agreement are currently underway with regard to supplies for the period 1.10.2021 - 30.06.2022.

Bulgarian Energy Holding EAD expects the Greece-Bulgaria interconnection to be put into commercial operation within the period announced by the project company by July 1, 2022, which will allow the full volume of Azeri gas supplies to reach Bulgaria under the terms of the Agreement.

Bulgarian Energy Holding EAD continues to provide financial and other support to its subsidiaries, taking into account their operational independence - as a shareholder in ICGB AD - to complete the construction of the interconnection as soon as possible and to extension of the temporary agreements for receiving natural gas from Azerbaijan until its completion, including as a guarantor for the obligations of Bulgargaz EAD under the issued bank guarantee to ensure the fulfillment of its obligations under the Agreement.

In conclusion, we note that foreign law is applicable to the Agreement and all actions and approvals of Bulgarian Energy Holding EAD and Bulgargaz EAD are undertaken after the relevant analyzes, inspections and obtaining specialized legal advice from consultants qualified to practice this right. This is necessary because any free interpretations of the contract can be misleading and harm the relations with the Azerbaijani supplier and, accordingly, the interests of the Bulgarian state, concluded BEH.

Meanwhile, according to Azerbaijani media, based on the State Customs Service of Azerbaijan, the country's natural gas exports to Bulgaria amounted to 134.9 million cubic meters worth $ 19.3 million in the first seven months of the year.

Exports to the Greek side amounted to 344 million cubic meters worth 96.1 million dollars.

In total, Azeri gas exports to Europe during the period amounted to 3 billion cubic meters of natural gas worth $ 773.7 million.