The Chiren gas storage: how Bulgaria sabotages its energy independence

The most critical projects for Bulgarian and European energy security have faced delays exceeding a decade, and the Chiren gas storage facility is no exception. The interconnector with Greece, vital for regional gas diversification, has been under construction for 12 years, while the expansion of Bulgaria’s sole gas storage facility in Chiren has surpassed 14 years and is currently under investigation by the European Public Prosecutor’s Office (EPPO).

In contrast, the extension of the TurkStream gas pipeline through Bulgaria to Hungary and Slovakia was completed in just two years and now serves as the only conduit for Russian pipeline gas to Europe. While the EU aims to eliminate Russian gas imports by 2027, the American hedge fund Elliott Management has expressed interest in increasing TurkStream’s capacity. The pipeline’s capacity to Serbia will reach 13 billion cubic meters (bcm) per year, with new capacity from Turkey projected at 17.93 bcm/y.

“Chiren” on standby again

Despite delays, Azeri gas has been flowing through the 183-kilometer Greece-Bulgaria interconnector, with a capacity of 3 billion cubic meters, for three years now. However, the Chiren project remains stalled. The state gas operator Bulgartransgaz canceled a second tender for contractors to drill three exploitation wells, with an option for three more, valued at 109.472 million leva excluding VAT (approximately 56 million euros). A review by EUalive in the public procurement register revealed that no new tenders have been announced. Bulgartransgaz failed to respond—despite assurances—to questions about when new tenders will be launched and the current status of the ground infrastructure.

“The longer the expansion of Chiren is delayed, the worse it is for Europe and far worse for us (Bulgaria),” former Energy Minister Alexander Nikolov recently stated. He emphasized that increased gas storage capacity would enhance energy independence, stabilize prices, and reduce the risk of supply crises.

The Chiren underground gas storage facility, built on a depleted gas condensate field discovered in 1963 in northwestern Bulgaria, aims to double its storage capacity from 550 million cubic meters to 1.1 billion cubic meters. This would increase the daily extraction capacity to 10 million m³/day and the injection capacity to 8 million m³/day (currently, the maximum daily extraction capacity is 3.82 million m³/day and injection capacity is 3.2 million m³/day).

In 2022, the Chiren project received a €78 million grant under the Connecting Europe Facility, with a grant agreement signed between Bulgartransgaz and the European Climate, Infrastructure and Environment Executive Agency (CINEA) in June 2022. However, this covers only part of the project’s total cost, which exceeds €300 million. The EU is also funding 3D seismic surveys for the expansion with €3.9 million.

The planned storage capacity of 1.1 billion cubic meters represents more than a third of Bulgaria’s annual gas consumption, which has declined in recent years and is projected to reach 2.744 billion cubic meters by 2024, according to national statistics. In April 2022, when Gazprom unilaterally halted Russian gas supplies to Bulgaria, the country was 92% dependent on Russian natural gas, and its gas storage was nearly empty at the end of the heating season. On May 6, the European Commission announced a comprehensive plan to phase out all Russian gas and oil imports by the end of 2027, a landmark decision to sever energy ties with Moscow in response to Russia’s 2022 invasion of Ukraine. Currently, Russian gas accounts for approximately 19% of European imports (pipeline gas and LNG).

EU to end all Russian gas and oil imports by 2027, signals robust energy sanctions

By coincidence, Brussels’ goal aligns with the deadline for the Chiren gas storage expansion, initially planned for March 2025. The delay stems from the fact that work on the project’s most complex and critical component—the underground infrastructure—has not yet begun. Suspended public procurement procedures have prevented any of the planned drilling from starting. The project envisages a total of 13 boreholes: ten for injection and three for observation.

Energy Minister Zhecho Stankov publicly stated that the ground infrastructure has been completed and new compressors installed. For the upcoming injection season, the storage capacity of the Chiren facility was increased by 100 million cubic meters, reaching 650 million cubic meters. Over 87% of its capacity for the 2025/2026 gas year has been reserved by 15 companies, eight of which have international participation. However, the minister did not address the problematic drilling component of the project.

The European Prosecutor’s Office investigates

The public procurement for the project’s most critical components, such as drilling rigs, triggered an investigation by the EPPO, which seized documents from Bulgartransgaz in August 2024 related to the procurements. The Anti-Corruption Fund (ACF) reported violations identified a year earlier in an inspection by Bulgartransgaz’s internal auditor, Velko Peev. The most significant issue was a change in drilling technology, which, according to Peev, violates the project’s terms of reference and jeopardizes safety. As early as February 2025, the ACF had filed a report with the EPPO and the European Climate Agency regarding several indicators of misuse of EU public funds in the procurement documentation.

The initial procurement for the Chiren expansion was awarded to Glavbolgarstroy, but two years after its announcement, the construction company withdrew from the contract. Bulgartransgaz did not contest the decision or seek penalties, estimated by the ACF at up to BGN 26 million.

Bulgartransgaz’s CEO, Vladimir Malinov, is also under investigation by the EPPO. In late March, he was summoned to face charges but was not removed from his position and was even re-elected a month ago. Malinov publicly stated that he would not resign, would remain in office, and would successfully complete the project. But will the ribbon be cut in 2027?

Two months ago, the investigation escalated after a video surfaced incriminating Bulgarian European Prosecutor Teodora Georgieva in alleged collusion related to her 2021 election to the position. Georgieva neither confirmed nor denied the video’s authenticity but withdrew from the Chiren investigation, citing threats. In public comments, she accused Delyan Peevski, leader of the DPS-New Beginning and a figure sanctioned under the Magnitsky Act, of “demanding 20 million leva from subcontractors of the project.”

As a result of the scandals, the EPPO temporarily suspended Georgieva, stating, “As the strongest measure available against any risk or perception of compromised integrity of investigations, the supervising Bulgarian European Prosecutor has been temporarily suspended. This is without prejudice to the outcome of the administrative enquiry.”

In addition to Bulgaria, the delay in the Chiren project directly affects Greece. A January 2023 memorandum of energy cooperation allows Greece to store up to 0.7 TWh (approximately 66.7 million cubic meters) in the Bulgarian gas storage facility. This stems from a European regulation adopted after the start of the war in Ukraine, requiring countries without underground gas storage facilities to maintain reserves in another member state equivalent to 15% of their annual consumption.

Bulgartransgaz remains silent on the status of new drilling tenders for Chiren and the ongoing EPPO investigation. For Laura Kövesi’s office, demonstrating efficiency in this investigation – where it has unprecedentedly removed its own prosecutor – will be a matter of honour. In the meantime, the outcome of this first significant investigation into abuse in Bulgaria’s energy sector remains uncertain.

Caption: A general view of the new natural gas pipeline connecting Komotini in northern Greece with Stara Zagora in southern Bulgaria, at Komotini, Greece, 8 July 2022. The Interconnector Greece-Bulgaria (IGB) is a crucial energy bridge that is important for Greece, Bulgaria, the Balkans and for Europe, Prime Minister Kyriakos Mitsotakis stressed on 8 July at the inauguration of the new natural gas pipeline. [EPA-EFE/ACHILLEAS CHIRAS]

Updated: May 15, 2025 - 05:50