Episode Notes:

Last week, Bulgaria signed a deal with Turkey to allow it to import natural gas through Turkish terminals and transportation networks. To discuss what this means for southeastern Europe’s energy security, we’re joined by Dimitar Bechev

Dimitar Bechev is a lecturer at the Oxford School of Global and Area Studies and a visiting scholar at Carnegie Europe. He is also the author of Turkey Under Erdogan: How a Country Turned from Democracy and the West and Rival Power: Russia in Southeast Europe.

[:50] The natural gas deal with Turkey

[3:18] Implications of the deal

[5:18] Oil and gas from Greece

[8:22] Bulgarian attitudes toward the conflict in Ukraine

[10:04] Future attitudes towards Ukraine

Episode Transcript:

Nicholas Danforth: My name is Nicholas Danforth and I'm an editor at War on the Rocks. You are listening to the Warcast, a members only podcast for what you need to know now.

On Tuesday, Bulgaria signed a deal with Turkey to allow it to import natural gas through Turkish terminals and transportation networks. To discuss what this means for Southeastern Europe's energy security, we're joined today by Dimitar Bechev.

Dimitar is a lecturer at the Oxford School of Global and Area Studies and a visiting scholar at Carnegie Europe. He's also the author of Turkey Under Erdogan: How a Country Turned From Democracy in the West, as well as the book Rival Power: Russia in Southeast Europe.

Welcome to the Warcast.

Dimitar Bechev: Thank you.

Nicholas Danforth: Tell us a little bit about the recent deal with Turkey, specifically what it actually entails, and then what it's going to mean for energy security more broadly.

Dimitar Bechev: Since Bulgaria got cut off from Russian gas supplies, which happened in April because of this commercial dispute to do with payment in rubles, it has been relying to some extent on liquified natural gas, that is LNG, and has been using on an ad-hoc basis the capacity at Turkish energy terminals.

Now this deal, which is for a period of 13 years, basically officializes the relationship and makes it possible for the state gas company, Bulgargaz, to reserve capacity because it was not a given before. It required political lobbying. That was the case last August when the government, the then government was calling Ankara to intervene, and now this is put on a permanent basis.

Beyond the terminal, what is interesting is probably Bulgaria will be tapping into a storage site, which is now being expanded, is next to Silivri. So if your listeners who follow Turkish affairs probably think about the prison facility, which is there, but there's something more to Silivri. There's also a gas storage site.

And that way basically Bulgaria shows that if they manage to contract suppliers, including US suppliers like Cheniere, which delivered the cargo last August, there'll be a place where you can offload it and re-gasify it and then transport it to the Bulgarian border. It also makes it possible to do it on a long term basis because as any energy company, also energy suppliers prefer to have long term contracts rather than trade on the spot markets. It creates predictability. So this is the very short version of what was agreed on Tuesday.

Nicholas Danforth: And what are the implications for Bulgaria's energy security going to be and what benefits, if any, will this have for other countries in the region?

Dimitar Bechev: Well, this allows Bulgaria to import additional gas. That's in addition to 1 billion cubic meters coming through the so-called southern gas corridor that runs through Greece all the way to Azerbaijan to the Caspian Sea, and now it's connected to the Bulgarian grid. So the Turkey deal allows for another one bcm, billion cubic meters. And that together is about two thirds of annual consumption in the country.

Of course, energy security is more multifaceted thing. Bulgaria actually doesn't consume that much gas overall. Just to put things in perspective. Hungary, which is often in the spotlight and it's a country of 10 million of course versus 7 million in Bulgaria, but Hungary consumes 10 million bcm versus three in Bulgaria. So it's a factor of three and it has to do with the fact that gas is much more common with households. That's pretty much everywhere in Western Europe because of gasification. That's not the case in Bulgaria.

But yeah, it makes it easier for Bulgaria to find commercial partners, disentangles the longstanding relationship with Russia. Although as a footnote, and maybe that's a good segue to our conversation from this point onwards, Bulgaria has a very close connection to Lukoil, which is a big Russian oil trader and refiner and probably oil is much more important than natural gas when it comes to energy security, but also the economy.

Nicholas Danforth: Well, let me ask about that because I know there was also I think the LNG pipeline with Greece that just went online in December. Now there's talk of an oil pipeline with Greece that would presumably enable the area to diversify its oil supplies. Can you tell us about that?

Dimitar Bechev: So it's not an LNG pipeline. It's a pipeline full stop. It helps Bulgaria import this Azeri gas that I mentioned before. But it's good to mention, to bring in LNG into the conversation because there's another project which will probably come onstream at the end of this year or maybe early next year for floating, regasification and storage unit next to Alexandroupolis. That's a port city in northeast of Greece, just at the border with Turkey.

Just to offer a parenthesis. It's one of the logistical hubs that the US military uses to supply Ukraine from the south. But we know about the Polish corridor, but also there's Alexandroupolis, which is as a railway running to Bulgaria, and then Romania all the way to Ukraine. Closing the parenthesis, the LNG storage capacity and regasification unit will probably bring even more gas into this connection with Greece then will then be also directed to other places, including Romania. So it will probably reach Moldova, which has been on the strain, and some of it will probably go into Serbia, which is now working on interconnection with Bulgaria.

So this is a huge deal. This thing has always been a US interest in this great Bulgaria venture. The former ambassador, Jeffrey Piatt was very much involved as the ambassador to Greece. Some of the cargos that will be gasified there will be coming from the US, and it's one of the nodes in The Three Seas initiatives or initiative that has been developed by US allies in Central and Eastern Europe as well.

So that's the big development coming up in the next 12 months or so. That's an old idea to bypass the Bosporus with an oil pipeline. Back in the day it was about Russian and maybe Kazakh oil being shipped from The Black Sea towards the Aegean in order to avoid the congested Bosporus. It came also after '94 when the Turks changed the commercial ships regime, hiking up the charges for tankers.

Now the idea is the opposite to use such a pipeline to ship crude oil from the south towards the north. But it's a preliminary discussion. It's not a given that there'll be enough commercial interest and it'll be a economically viable thing, but it's a part of a conversation now. And it's a very different stage than the gas projects that we've been discussing.

Nicholas Danforth: Now, as a final question, let me ask you, how have Bulgarian attitudes towards the Ukraine conflict evolved in general over the last year?

Dimitar Bechev: It's a hotly contested issue. Bulgaria only in November took formal decision to supply arms to Ukraine. And we still don't know what sort of weapons will be delivered because political opinion is split with some parties in favor and others permanently opposed because they see Russia and it's a friendly country and don't want to go against it.

There is another side of the story which is worth mentioning. Bulgaria has a huge or relatively sizable military industrial complex, which is operating according to Warsaw Pact specifications. In other words, all these munitions needed for Ukraine, the famous 152 millimeter shells are produced in scale in Bulgaria, and for months on end there have been flights going to Poland from Bulgaria. So it's a well kept secret or maybe not well kept secret at all that Bulgaria has been supplying Ukraine through the back doors of Poland and now this cooperation has become official.

But yeah, it doesn't mean that it'll be less controversial and it's very likely we have another round of elections in the coming months and I'll be surprised if Ukraine will be front, right, and center in the political discussion with some populist parties, but also the former Communist Party, the Socialists trying to instrumentalize it to rally voters.

Nicholas Danforth: And so what is that discussion going to look like during the elections? I mean, what are the arguments that both sides are making?

Dimitar Bechev: Well, there are two positions. One position is saying we have to be acting in solidarity with our allies in the EU and NATO and Ukraine is under attack, so we have to do our share. Also, it's a good way to get rid of Soviet equipment and get the US and other Western European allies replace it with more advanced gear. And there's another side of the argument, which is not actually arguing that Russia is in the right. It's saying it's not for Bulgaria to intervene. That's very dangerous. There's the sort of soft pro Kremlin line, if you will. Rather than saying that we have to put in this war of aggression, it's just Bulgaria's too small, let's not stick our neck out. And that's how we're playing out.

And of course some of that is not genuine because going back to the Socialist Party, they were in government when all those deliveries were taking place through Poland. But for their voters, many of whom are diehard Kremlin supporters and nostalgists for the good old days, they have to put up a show that they are resisting. They're also, their bleeding support to the populist force that I mentioned briefly.

So there's an internal dynamic also within the camp of those who are skeptical towards the West and have a close relationship with the Russians.

Nicholas Danforth: Thank you so much for joining us on the Warcast.