Bulgaria threatens to halt Russian gas transit to Serbia and Hungary

Bulgaria has announced that it may halt the transit of Russian gas to Serbia and Hungary if Russian gas company Gazprom is unable to pay transit fees in light of new US sanctions. The Bulgarian service of RFE/RL reported this yesterday, citing Bulgarian Energy Minister Vladimir Malinov.

A pipeline running through Bulgaria and connected to TurkStream allows Russian gas to be transported to Serbia and Hungary. Gazprom has booked most of its capacity there, Bloomberg noted.

Malinov’s comments come after the United States imposed sanctions in November on Russian state-controlled Gazprombank, which until then had been the only Russian bank able to process payments for supplies of Russian gas. Last week, Russian President Vladimir Putin lifted this requirement. Foreign buyers will now be able to use other banks, but it is unclear which ones.

“Bulgartransgaz will strictly comply with the contract and will not allow the transit of natural gas unless the service is paid for accordingly,” Malinov said, according to RFE/RL, referring to Bulgaria’s state-owned gas transmission operator.

Gazprom’s obligations for December have been paid, according to the minister, but it is unclear what will happen in the future.

Bulgaria, along with Poland, was among the first European Union countries to be cut off from Russian gas supplies in April 2022 after refusing to comply with the Kremlin’s demand to start paying for supplies in rubles. Last year, the Balkan country tried to impose a fee of around 20 percent on all Russian gas transit, but abandoned the plan under pressure from Hungary.

The agreement on the transit of Russian gas through Ukraine expires at the end of the year, raising further questions about the continuation of Russian gas supplies to the EU, Bloomberg reported. Once the agreement expires, TurkStream is set to become practically the only significant source of Russian gas delivered to Europe by pipeline.