EditCostly Turkish deal pushes Bulgarian state gas company into bankruptcy
The new energy minister says BOTAŞ agreement leaves Bulgarian state gas company accumulating debt despite profitable Azeri imports
Bulgaria’s state-owned gas supplier Bulgargaz is effectively insolvent due to adverse market conditions and its contractual arrangements with Turkey’s state energy company BOTAŞ, newly appointed Energy Minister Traycho Traykov has said, just three days after taking office in the caretaker cabinet.
“The only reason we are not shutting the company down immediately and creating a new ‘Bulgargaz’ or pursuing another form of restructuring is that it is a party to the gas supply contract with Azerbaijan, which is currently quite profitable for Bulgaria. We therefore need to utilise the maximum capacity,” Traykov explained.
Only four years ago, Bulgargaz was among the most profitable state-owned enterprises, after Russia’s Gazprom unilaterally halted gas supplies to Bulgaria. The company reacted swiftly, securing liquefied natural gas (LNG) deliveries for the domestic market, while a long-term pipeline gas contract with Azerbaijan entered into force.
Traykov confirmed that Bulgaria is not making payments under the contract with BOTAŞ and is instead accumulating liabilities.
“This is a risk I cannot quantify at present,” he said, adding that he intends to meet his Turkish counterparts to “put everything on the table”.
In early 2023, a caretaker government appointed by then-president Rumen Radev signed an agreement between Bulgargaz and BOTAŞ granting long-term access, until the end of 2035, to Turkish LNG terminals and the gas transmission network. The deal reserved capacity of up to around 1.3 billion cubic metres per year.
Under the terms of the agreement, Bulgaria pays approximately €500,000 per day for the reserved capacity, irrespective of whether it is used.
This translates into roughly €180 million in fixed annual costs. So far, Bulgargaz has failed to utilise the capacity, accumulating debt under the “take-or-pay” arrangement.
In 2024, the company posted a loss of €130 million, despite its other profitable contracts and its near-monopoly position on the Bulgarian gas market.
“Everyone is asking how this contract with BOTAŞ, which is entirely loss-making for Bulgaria, can be brought closer to a more acceptable form,” Traykov told Bulgarian National Radio. “I have some ideas, but I need facts, discussions and the contribution of many people.”
Radev, widely seen as the potential winner of the parliamentary elections on 19 April, has argued that the agreement with Turkey could yet become operational and profitable for Bulgaria, although he has not publicly set out how.
At the same time, the contract has been under investigation by the prosecution for two years, without any tangible outcome so far. Bulgargaz epitomises some of the structural weaknesses of Bulgaria’s energy sector, where state- and municipally-owned enterprises dominate.
The gas supplier is owed nearly €760 million by Toplofikatsiya Sofia, the capital’s district heating utility, which provides thermal energy to the capital and is itself technically insolvent.
The heating company’s total liabilities amount to €1.26 billion which is more than 1% of Bulgaria’s GDP. The latest option under consideration was for the state budget to allocate €800 million to purchase Toplofikatsiya Sofia’s debt to Bulgargaz, effectively transferring the burden to public finances.
Caption: Footage from a search by the Anti-Corruption Commission and the police at the Bulgargaz building in July, 2025, BGNES
Updated: February 23, 2026 - 05:49
