Mediapool reports that all contracts for the constuction and financing of the extension of the Turkish Stream gas pipeline on Bulgarian territory – the so-called “Balkan Stream” were concluded by the state gas operator Bulgartransgaz (BTG) in violation of the Ordinance on the licensing of the activities in the energy sector. According to its requirements, Bulgartransgaz had to request prior approval from the Energy and Water Regulatory Commission (EWRC) – both for the contracts with the Saudi consortium Arkad and the Bulgarian-German Ferrostaal for the construction of the pipeline, as well as for the financing. The loan agreements concluded by Bulgartransgaz EAD have increased the debt of the gas operator from 4 BGN million in the beginning of 2019 to over 2.6 BGN billion today. These contracts were supposed to be approved by the EWRC, but Bulgartransgaz EAD did not notify the commission about them at all, the Ministry of Energy stated.
The inspection of the EWRC was requested by the chairman Ivan Ivanov on April 5, 2021. The results of the inspection and the conclusions of the energy regulator were discussed at a closed meeting of its members on Friday – July 2, and their decision was that BTG had committed a violation. The report with the conclusions on the violations was sent to the Minister of Energy and to the director of the Bulgarian Energy Holding, which owns the gas operator. It is clear from the documents published on the EWRC website that a working group of the energy regulator will conduct an additional investigation on whether the cumulative effect of the transactions concluded by Bulgartransgaz EAD has led to accumulation of excessive debt of the energy company and endanger the security of supply.
Subsequently, the Minister of Energy – Andrey Zhivkov demanded management change in Bulgartransgaz, due to violations in the signing of contracts for the construction and financing of the gas pipeline “Balkan Stream”. The response from BEH, states that the holding will request from Bulgartransgaz’s supervisory board the relevant reports and opinions concerning the circumstances related to the inspection performed by the EWRC and then BEH will take its decision.