Some Problems of Energy Interconnectivity of Bulgaria in European and Regional Context

Most people think of the European Union primarily as a "Common Market". This is true, but it does not mean that there is complete interconnectivity between the energy infrastructures of the member states. On the contrary, this is one of the most serious problems of the European Union. The connectivity between the electricity networks of Western and Central Europe on the one hand, and South-Eastern Europe on the other, is unsatisfactory.

Let us emphasize that one of the significant reasons for the high price of electricity in our country is the poor West-East connectivity of the EU member states' power grids. Of course, we have to confess that the EU has created tools to improve this connectivity, but there is still much to be desired.

On the other hand, the disunity of gas transportation networks in the EU is a kind of "triumph of nationalism". The connectivity of European gas transportation networks is at a very low level, and this creates one problem after another.

In this regard, below we will consider Bulgaria’s place in the general context of the connectivity of gas and electricity networks – not so much within the EU, but with the EU’s neighbouring countries, towards which an adequate partnership policy should be applied.

Geopolitical and geoeconomic context of the problems of gas connectivity of EU countries with neighboring countries

In 2022, Vladimir Putin unilaterally cut off gas supplies to two countries first: Poland and Bulgaria. In the future, we will understand his motives for starting with Bulgaria (as for Poland, everything is easier to explain in a retrospective historical context), but one thing is certain. If the Bulgaria-Greece connecting gas pipeline (IGB) had not been launched in October 2022, the country would have suffered an energy and, most likely, a raw materials catastrophe. An energy catastrophe for everyone, and a raw materials catastrophe for some industries, primarily fertilizer producers.

The IGB interconnector connects Bulgaria to the Southern Gas Corridor, a giant structure linking the Shah Deniz II field on the Caspian shelf near Baku with Europe. It consists of three gas pipelines built successively over many years: the South Caucasus Pipeline (SCP), the Trans-Anatolian Natural Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP). The South Caucasus Pipeline transports natural gas from the Shah Deniz II field to the border between Georgia and Turkey. TANAP carries out transmission from the Georgian-Turkish border to the border between Turkey and Greece. The Trans-Adriatic Pipeline (TAP) runs through the entire territory of Northern Greece, crosses Albania and along the bottom of the Adriatic Sea reaches the port of San Foca in southern Italy.

The IGB interconnector starts from the TAP route in Komotini (Gyumurghina) and reaches the Stara Zagora region. This pipeline can and does supply slightly more than 3 billion cubic meters of natural gas annually. Bulgaria has a long-term contract with the State Oil Company of Azerbaijan (SOCAR) for the purchase of 1 billion cubic meters of natural gas per year. In fact, in 2024, Bulgaria purchased and transported 2 (two) billion cubic meters of natural gas through the interconnector. Due to the long-term nature of the contract and good relations with Azerbaijan, the price of natural gas supplied through the pipeline is relatively low and absolutely advantageous compared to the alternative - liquefied gas.

(Bulgaria has a stake in the LNG unloading and regasification terminal in Alexandroupolis (Dedeagach), but there the pricing aspects are much more opaque, incidental and dependent on the specific circumstances of each individual shipment).

The IGB interconnector is the second independent natural gas operator, licensed in Bulgaria. It is also an independent operator in neighboring Greece. The IGB interconnector is fully loaded, with one to two thirds of its capacity used for Bulgaria.

The connecting pipeline could increase its capacity if an additional compressor station is built near Komotini, making it possible to transport 5 billion cubic meters of natural gas per year.

During the last visit of Azerbaijani President Ilham Aliyev to Bulgaria, an agreement called the “Ring of Solidarity” was signed, the participants of which are the EU member states Bulgaria, Romania, Hungary and Slovakia. An element of the “Ring of Solidarity” is the so-called “Vertical Corridor”, which consists essentially of the existing gas infrastructure, primarily of Bulgaria and Romania, through which natural gas is supposed to be supplied to Hungary and Slovakia, as well as to Austria. Here we can see that all the countries that are called pro-Russian and favorable to Putin are rushing to diversify their natural gas supplies by importing Azerbaijani gas.

Construction and installation work is underway on the Bulgarian gas transportation network, which is directly related to ensuring greater productivity of our part of the "Vertical Corridor". Although it is not widely advertised, Moldova has been receiving Azerbaijani gas through the "Vertical Corridor" for at least six months, regardless of its current state.

The IGB interconnector was financed by the EU as a “project of common interest,” and for that we should be very grateful, as the project had been stalled for years due to lack of local funding. It was saved by European funding and the exceptional consistency of the Azerbaijanis, who swallowed all the sabotage (literally) of our administration and the unfulfilled clauses of our bilateral agreement.

Again, as a “project of common interest,” the EU financed and built the Sofia-Nis interconnector, which again supplies Azerbaijani gas, diversifying Serbia’s supplies and reducing its dependence on “Gazprom”. We have no data on the price of the natural gas that “Gazprom” sells to Serbia, but it is known that supplies to Hungary (!) are currently carried out at a murderously high price. (By the way, even in peacetime, supplies of natural gas from Russia to Germany and Bulgaria were carried out at completely different prices, and for Bulgaria they were, naturally, significantly higher).

Intensive research into the possibility of transporting hydrogen via the Trans-Adriatic Pipeline has been underway for at least three years. It is assumed that certain technical improvements will be required, and the only serious obstacles to this are certain financial circumstances - the refusal of EU development and investment banks to provide loans for the construction of new pipelines and the improvement of existing ones, arguing that they transport "harmful" fossil fuels.

Some analysts tend to underestimate the role of natural gas supplies from Azerbaijan, comparing their volumes, for example, with the volumes of (now suspended) natural gas supplies from Russia to Germany. This approach is counterproductive.

Firstly, because the consumption of South-Eastern European countries is lower than that of the "thirsty" German industry and German households.

Second, because the infrastructure built by Azerbaijan and SOCAR's partners, the world's leading natural gas producers and suppliers, will be of critical importance if Turkmenistan overcomes its fears and starts supplying natural gas to Europe.

Russia, Iran and Turkmenistan are the three countries in the world with the largest reserves of natural gas, and no one can say for sure which of the three countries has the largest reserves. However, it is certain that the aggression in Ukraine was initiated by Russia, which is under a set of sanctions. It is also certain that Iran is under a set of sanctions, mainly because of its nuclear program.

In this situation, Turkmenistan is a welcome partner. The European Commission is pursuing a completely adequate policy in this matter. Back in 2015, the European Commission's Special Representative for Central Asia publicly stated at the First Caspian Energy Forum that the EU was ready to finance the construction of a gas pipeline along the bottom of the Caspian Sea to transport Turkmen gas to Azerbaijan.

And right there, at the Energy Forum itself, Russia (represented by Medvedev himself) and Iran spoke out against this project. However, the difference in their positions is significant. Russia is simply against the export of Turkmen gas to Europe. Having lost once (and most likely forever) its position on the Turkmen gas market, Russia is only concerned that huge volumes of Turkmen gas would not end up on the European market.

(Russia itself lost its position in the Turkmen gas market in 2009. This happened because the demand for Russian gas decreased due to the financial crisis and the consequences of the war in Georgia. Russia literally sabotaged the gas pipeline connecting Turkmenistan to the Russian Federation, and the pipeline “ruptured”. The Russian side declared that it would not buy Turkmen gas due to a “force majeure” situation and would not pay penalties for non-fulfillment of the contract. To the surprise of the Russians, the then new President of Turkmenistan Gurbanguly Berdimuhamedov managed to reach an agreement with China very quickly. Within a year, a gas pipeline was built from Turkmenistan to the border with China, and China completely replaced Russia in the purchase of Turkmen natural gas. The irony is that the builder of the gas pipeline was... a Russian company. Turkmenistan is currently the largest supplier of natural gas to China - more than Russia).

Iran, on the contrary, opposes the construction of an underwater gas pipeline along the bottom of the Caspian Sea, but declared its readiness to provide any assistance in transporting natural gas from Turkmenistan in any direction by land. This statement was made at that time in response to the EU's declared interest in the Trans-Caspian gas pipeline along the bottom of the Caspian Sea. Here Iran does not take into account the interests of its "ally" Russia, but prefers pragmatically to earn (considerable amount of) money. 

For their part, the Turkmen authorities know from experience that partnering with China is not an easy task, and when China is your creditor, it becomes even more difficult. So Ashgabat is looking for ways to diversify its exports. Such is the TAPI (Turkmenistan-Afghanistan-Pakistan-India) project. This project has been slow and difficult to implement for many years, mainly because of the situation in Afghanistan.

(Ironically, it is now possible that the project will be accelerated due to the Taliban's interest in using certain volumes of natural gas and, above all, in receiving transit fees for its transportation to Pakistan. The project is also indirectly supported by China, as Beijing hopes that once the pipeline reaches Pakistan, a bypass route can be made to Chinese regions bordering Pakistan, despite the complete inconsistency with the establishment of international borders in the region that could be simultaneously recognized by China, Pakistan and India.).

It would be extremely beneficial for Turkmenistan to send significant volumes of natural gas to Turkey and Europe, but this is hampered by Russia’s aggressive position, as well as by purely technical problems with creating delivery infrastructure if the option of an underwater Trans-Caspian gas pipeline is not implemented.

In any case, any “unblocking” of supplies from Turkmenistan to Turkey and Europe goes through Azerbaijan – both for purely geographical reasons and because of the gas transportation infrastructure already built on Azerbaijan’s initiative.

From this perspective, Azerbaijan, represented by its state-owned company SOCAR, has strategic importance in developing options for the supply of natural gas from Turkmenistan, as well as from other “trans-Caspian” gas fields. (It is quite possible that large natural gas fields may be discovered on the Kazakh shelf of the Caspian Sea).

Incidentally, for a time this was done as part of a swap deal (suap deal) between Azerbaijan, Turkmenistan and Iran. Turkmenistan supplied natural gas to the important northeastern Iranian city of Mashhad, where the Eighth Imam is buried, and Iran supplied the same amount of natural gas to Azerbaijan, which exported it or used it for domestic needs as it saw fit.

(We are talking about the second most populous city of Iran – Mashhad. Translated, its name means “place of martyrdom” because of the tomb of “Imam Reza”, where the Eighth Shiite Imam – Ali al-Rida is buried. The Abbasid Caliph Harun al-Rashid, known to us mainly from the fairy tails about him, is also buried in this tomb. The tomb is a very important place of pilgrimage, with about 25 million people visiting it every year. That is why Mashhad is called “the holiest city in Iran”.

Since Iran's gas fields are mostly in the Persian Gulf region, it is much more profitable for the authorities in Tehran to buy natural gas for Mashhad from neighboring Turkmenistan than to build endless gas pipelines across the desert Iranian plateau. That is why Iran is participating in the swap deal with Azerbaijan and Turkmenistan).

This amounts to 1 billion cubic meters of natural gas per year. This amount is not that big, but it still corresponds to a third of Bulgaria's annual consumption. Incidentally, it corresponds exactly to the annual volume of supplies agreed between Bulgaria and SOCAR.

Over the past year, this operation has been suspended due to new negotiations between Azerbaijan and Turkmenistan, but there are signals that work in this direction will be resumed, including due to the serious interest of the Turkish side in Turkmen gas.

For the EU and Bulgaria in particular, it is fundamentally important that part of Ashgabat's large gas resources should be sent to us, and not to the "endlessly thirsty" for energy Chinese economy. This can only be done in close partnership with Azerbaijan and Turkey.

The overall assessment of the region's and Bulgaria's relations with Azerbaijan in particular is clearly positive. Bulgaria and the region receive natural gas under a long-term contract at a favorable price, which in turn stabilizes the cost of the gas mix in our country. The fact that the volume of supplies has almost doubled, compared to the contracted volume speaks for itself.

The development of this gas infrastructure is important for the whole of South-Eastern Europe and even for Central Europe: Greece, Bulgaria, Romania, Croatia, Slovenia, Hungary, Slovakia and Austria. Recently, the Czech Republic has also shown interest.

Italy is also a major consumer of natural gas supplied via the Southern Gas Corridor. Significantly, the country has no natural gas production of its own (it imports natural gas mainly from Libya via an undersea pipeline, and now also from Azerbaijan). At the same time, the start of the exploitation of the Trans Adriatic Pipeline in 2020 allowed Italy to become a net exporter of natural gas during the gas crisis caused by Russia in 2022.

There are several problematic issues in our relations with Azerbaijan that have a direct impact on us.

The European Commission, pursuing a pragmatic policy towards Azerbaijan, has officially agreed to double the supply of natural gas from the Caspian shelf in the foreseeable future. The corresponding agreement was signed by Ursula von der Leyen and Ilham Aliyev.

However, for this to happen, appropriate investments are needed, which cannot be made by the several companies that own different shares of the Southern Gas Corridor, nor by Azerbaijan alone, which owns 15 to 20 percent of each section. The participation of the recipients of natural gas – the buyers – is also necessary.

This is not easy, given the wait-and-see attitude of most buyers.

The second problem, which largely follows from the first mentioned above, is the policy of banks not to finance the construction of new hydrocarbon pipelines. This policy is deeply flawed and destructive for a number of reasons – not least because the pipelines transport not only “fossil fuels” but also raw materials for the chemical industry.

(By the way, Azerbaijan has acquired Turkey's largest chemical company, “Petkim”. Over the past six to seven years, Azerbaijan has become the largest one-time and systematic investor in Turkey through the construction of the Trans-Anatolian Gas Pipeline, the purchase of “Petkim” and its expansion, and the construction of the brand new STAR refinery in Izmir).

The third problem is purely political. Unlike the European Commission, which takes a reasonable position in relations with Azerbaijan, many members of the European Parliament hold directly opposite views. There are several powerful lobby groups operating there:

- first of all, the Armenian lobby (unfortunately, the majority of the Armenian diaspora is extremely nationalistic, even racist to some extend);

- also lobbyists for importers of natural gas (via pipelines) from North Africa – from Libya and from Algeria;

- lobbyists for liquefied gas importers in alliance with pro-Russian forces;

- Fourthly, but not least, there are communities of MPs who can be called “abstract” or “sterile” democrats. The latter are people who primarily come from countries that do not depend on natural gas supplies from Azerbaijan and who, on the one hand, are under the influence of the agitators listed above, and on the other, demand that all EU partners have to be ideal liberal democrats, while not noticing the anti-democratic layers in their own countries.

Several times, resolutions full of hostile connotations towards Azerbaijan have been put to vote in the European Parliament, and once there were even calls for the introduction of “sanctions against Azerbaijan” by… suspending natural gas supplies. Some of the theses in these resolutions demonstrate incompetence, but what is worse, they can only cause harm without achieving any positive goal.

For Bulgaria, as well as for the whole of South-Eastern Europe including Italy, such an approach is not only unthinkable, but also hostile. Thank God, these resolutions are “non-binding papers”, texts that do not oblige anyone, but the very existence of such sentiments is frightening. It should be emphasized that the role of the European Commission in minimizing the damage from such propaganda is enormous.

When revising (recalibrating) the Green Deal, it is also very important to “unleash” the possibilities for financing the construction of new pipelines, as well as improving the parameters of existing pipelines.

Geopolitical and geoeconomic context of the problems of connectivity of the EU countries' electricity grids with neighboring countries

In the introduction, it was already stressed that the poor connectivity of the electricity grids of Western and Central Europe with those of South-Eastern Europe is one of the reasons for the high electricity prices in Greece, Bulgaria, Romania and Hungary.

In this sense, we must welcome the EU measures to improve connectivity, but we can also say that much remains to be done.

Recently, the question of the interconnectedness of EU countries with their neighbours outside the Union has arisen. In some cases, as in the case of Ukraine and Moldova, these are countries that are subject to obvious or covert aggression (in both cases by the Russian Federation) and that need assistance for their “energy survival”. The case of Ukraine is particularly indicative, where the country’s energy infrastructure is “target number one” for the aggressor.

Action to help such countries in serious trouble is a moral (and other) imperative, but ultimately, given the current level of connectivity in Europe, it results in higher costs for the countries of South-East Europe and Bulgaria in particular. This needs to be taken into account when developing and implementing various energy policies.

The opposite situation is observed when designing connections with countries wishing to import electricity, even "green" electricity, to EU countries. We are currently witnessing two projects for the production and import of "green" electricity to the EU, which directly affect Bulgaria due to its geographical location.

The first option is the production and import of "green" energy from Azerbaijan and Central Asian countries. The peculiarity of this option is that there are areas in the Caspian Sea where the wind blows “around the clock”. In other words, in these areas, electricity could be generated from renewable energy sources, which would constitute a base load. At present, such opportunities exist only in the North Sea, and they are used by Denmark, Sweden, Germany and the United Kingdom. The concept of producing "green" energy as a base load is extremely interesting, since it is supported by appropriate scientific arguments and is supported by global companies in the energy sector.

In this case, it is planned that electricity will be supplied to the Romanian coast via a cable along the bottom of the Black Sea. The designers claim that the losses in the power cable will be lower than if the transmission was carried out via conventional "overhead" power lines.

From a legal perspective, there has been real progress on this issue – a cooperation agreement has been concluded between Azerbaijan, Georgia, Romania and Hungary. There are conflicting signals about whether Bulgaria will join this agreement, but the answer is most likely “yes”.

The version with imports from the East has a second part. It envisages importing significant volumes of “green” electricity, this time from Kazakhstan and Uzbekistan. Both countries have great potential for producing renewable energy, although in this case we are not talking about “base load”, as is the case with Azerbaijani wind power.

The supply of this electricity is planned to be carried out via conventional "overhead" power lines, due to the existing possibility of connecting production capacities from Kazakhstan and Uzbekistan in this case. Just a few days ago, a meeting of the energy ministers of Azerbaijan, Georgia, Turkey and Bulgaria (in the order of electricity transmission from west to east...) was held in Istanbul. At the meeting, specific aspects of possible cooperation in the production and transmission of "green" energy from Central Asia to the Balkan Peninsula were discussed.

In general, the project of importing "green" energy from the east to the west is structurally divided into two sub-options. What they have in common is that in both cases, electricity is supplied via Azerbaijan and Georgia. (By the way, natural gas supplies also pass through these two countries.) This raises the question of the attitude of European institutions towards them. The position of the European Commission is moderate, pragmatic and adequate. The position of the European Parliament is aggressive, chaotic and, in fact, hostile. In the previous section, the topic of European Parliament resolutions on the Azerbaijan issue was discussed to some extent upon. Here we can only add that in recent weeks a similar tone has been adopted towards Georgia.

Yes, there is no doubt that Georgia's rulers have been behaving inappropriately since the escalation of the war in Ukraine. Like Armenia, they have sided with Russia, although in Tbilisi they have done that in a more covert way than in Yerevan. (Armenia has directly sent "volunteer" battalions to the front against Ukraine.)

Georgia's entire foreign policy since 2008 deserves a detailed critical analysis, but it should still be borne in mind that, unlike Russia, Georgia is not threatening anyone. Rather, the Georgians are scared and are pursuing a policy that we rightly do not like, but this policy should not become the reason for a sharp break in relations between Brussels and Tbilisi.

However, these same days we read about proposals by the European Parliament to impose sanctions against Georgian politicians etc. Such actions must be very carefully weighed and assessed, since a complete rupture of relations with Georgia, as well as similar attacks on Azerbaijan, can only lead to the failure of an important energy policy and to losses that will benefit only Putin.

An alternative project is the GREGY project, for import of electricity from Egypt via a underwater cable under the Aegean Sea to Greece. The initiator of this project is “Copelouzos Group”, and thanks to good lobbying, it is already one step away from being declared a “project of common interest”. Officially, the idea is that the undrwater cable will transport “green” electricity generated by wind turbines in the Sinai Peninsula.

In Bulgaria, support for this project was given very easy, almost without analysis and any doubts by one of the countless interim governments in recent times. No one paid attention to such details as the fact that “Copelouzos” is extremely close to “Gazprom”. In fact, it is the official importer of “Gazprom” natural gas to Greece, although this import has now ceased.

In official publications, “Copelouzos” has long been mentioned as the main channel for importing toxic capital from Russia to Greece. In fact, two companies are named: one of them is “Copelouzos”, the other is a company that is constantly accused of cigarette smuggling...

The proximity to “Gazprom” is not denied, and even is also emphasized in every possible way by the company. A separate issue is that “Copelouzos” is the concessionaire for many airports in Greece, including Athens Airport, but this is a national security issue for Greece.

There is no doubt that good relations between Russia and Egypt significantly helped the people from Copelouzos to quickly establish direct contact with the country's military leader, Al-Sisi.

There is a clear double standard in the policies of some European policymakers (unfortunately, their number is not a small one). They are constantly looking for arguments to prove that Azerbaijan is an authoritarian state, despite the fact that elections are held there regularly (23 of the 24 parties registered in the country participated in the last local elections in January 2025), they criticize (fairly, but selectively) Georgia for adopting laws “in the style of Putin”, but they do not notice that Egyptian leader Al-Sisi came to power as a result of a military coup, which overthrew the only president of Egypt elected in a general election during the so-called “Arab Spring”. The former president of Egypt was subsequently executed, as were hundreds of his supporters.

In any case, if we hold our noses and ignore the origins of Egypt's leadership, the best bet is to have ties to both the South Caucasus and Central Asia on the one hand and Egypt on the other. That would be fine, even if the suspicions of some more skeptical analysts, who believe that Egypt will build wind turbines with false power ratings and sell much of the electricity from natural gas fueled thermal power plants as “green” energy, because it has discovered large deposits of natural gas, are correct,

Some circles in Brussels seem to prefer Egypt to the South Caucasus and Central Asia, but it should be borne in mind that, at least for the moment, Azerbaijan and the Central Asian countries seem to be our only sincere allies in terms of the transition to “green” energy. The countries of South-East Europe, including Bulgaria, are extremely interested in continuing the work of the Southern Gas Corridor (SGC); perhaps to start transporting hydrogen (more precisely, methane-hydrogen mixtures with an increased hydrogen content of 30% and above) through the SGC; and eventually it will be duplicated and tripled by deliveries of green energy via underwater power cables and “overhead” power lines.

Supplies from Egypt would be welcome, but they should in no way become a reason for abandoning partnership with the countries of the South Caucasus and Central Asia.

This is a suitable time to point out another circumstance that we should take into account. It has recently become clear that Azerbaijan is in an advanced stage of acquiring a stake in the natural gas production of Israel's Tamar gas field in the Eastern Mediterranean.

Until now, the use of hydrocarbons from the Eastern Mediterranean (not only Israeli, but also Lebanese and Cypriot) seemed problematic due to the bad relations of Israel (and also Cyprus) with Turkey. Mega-projects have been proposed to build giant underwater gas pipelines to Crete and mainland Greece, which are extremely expensive and, in the current situation, when banks refuse to finance “fossil fuel” pipelines, practically impossible to be build.

The inclusion of Azerbaijan in the gas chess game in the Eastern Mediterranean changes the overall balance of power. Azerbaijan is a close ally of Turkey and Israel. Baku is the largest supplier of oil to Israel, thanks to the Baku-Ceyhan (Turkish port in the Eastern Mediterranean) oil pipeline and the excellent interstate relations between the two countries. For this reason, Azerbaijan is precisely the country that could negotiate the transportation of Israeli natural gas through Turkey, especially since it also owns pipeline infrastructure there.

Such a solution would make natural gas supplies from Israel to Europe much cheaper than mega-projects under the Aegean Sea and would make them technically feasible. Azerbaijan’s mediation in such a joint economic project would also likely contribute to reducing tensions in the Middle East, at least along the Turkey-Israel axis. Both the EU as a whole and Bulgaria should view such a scenario positively.

In conclusion, it is necessary once again to emphasize the need to strengthen work on the internal connectivity of energy networks and electricity grids within EU countries on the one hand, and the connectivity of EU countries with neighboring countries, with which it is necessary to build partnership relations, despite the shortcomings of their political systems, which we believe to exist.