Bulgarian state-owned gas company Bulgargas is seeking more than €400 million in damages from Russian gas monopoly Gazprom Export-Import for the sudden suspension of natural gas supplies at the end of April 2022.
Gazprom halted supplies to Bulgaria after the country refused to pay for Russian gas in roubles following the start of the war in Ukraine. Though Bulgaria has looked into ways to recoup the losses, it is now seeking damages directly from Gazprom.
“The Russian company will have a period of one month to settle the claim voluntarily. If no agreement is reached, an arbitration case will be filed in Paris,” Energy Minister Vladimir Malinov said on Thursday, noting that the €400 million in damages were calculated after a legal and financial analysis prepared by international law firms.
The minister added that previous Bulgarian governments have allowed an “unacceptable” two-year delay in making claims against Gazprom.
In April 2022, Gazprom justified the suspension of gas to Bulgaria after the country, along with Poland, refused to pay for Russian gas in rubles, citing – at the time – Russian President Vladimir Putin’s decree that gas must be paid for in rubles, despite the contract’s reference to US dollars.
In other words, both sides faced force majeure—Bulgargas could not pay for gas in roubles due to EU sanctions against Russia, and Gazprom could not accept payment in roubles.
In 2023, Bulgaria tried to take a firm stance against Russian gas policy, which has seen it pay some of the highest prices for natural gas for many years. In October, the country decided to introduce an additional energy tax on Russian gas transiting Bulgaria, to be paid by Gazprom.
Hungary and Serbia strongly objected, as this would have led to a significant increase in the price of Russian gas entering Central Europe via Bulgaria.
In December, the Bulgarian government abandoned the idea while negotiations were underway for Bulgaria to join Schengen by air and sea. Hungary threatened to veto Bulgaria’s accession.
In March 2024, GERB leader and former Bulgarian prime minister Boyko Borissov admitted that introducing the gas tax was only a tool to pressure Austria to lift its veto on Bulgaria’s accession to the Schengen zone.
From 1 January 2025, Bulgaria will be the only route for pipeline imports of Russian gas via Turkish Stream, as Gazprom’s contracts with Ukraine are set to expire.
