European prosecutors raid offices in Bulgaria over Chiren gas storage project

The European Public Prosecutor's Office (EPPO) carried out searches Aug. 13 at the offices of state-owned gas grid operator Bulgartransgaz and four other companies related to the expansion of the Chiren gas storage facility.

The searches in three Bulgarian cities are part of a probe into "possible procurement fraud" related to the EU-funded project for the expansion of capacity at Chiren, an EPPO spokesperson told S&P Global Commodity Insights.

"The searches are still ongoing, so we cannot share more information for the moment, in order not to endanger the ongoing procedures and their outcome," the spokesperson said.

Bulgartransgaz could not be reached for immediate comment Aug. 13.

In January 2022 it was agreed that the Chiren gas storage expansion project would be funded with the help of a Eur78 million ($85 million) grant under the EU's Connecting Europe Facility (CEF).

Only projects identified by the EU as Projects of Common Interest (PCI) were eligible for CEF funding, with the Chiren expansion project repeatedly included in PCI lists.

As of late 2023, the expansion was expected to be completed by the end of 2024.

Design capacity

The aim of the project is to bring Chiren's design capacity to 1 Bcm and increase its injection and withdrawal rates up to 8-10 million cu m/d.

Chiren -- Bulgaria's only gas storage site -- currently has a capacity of around 0.6 Bcm and an injection/withdrawal rate of up to 4 million cu m/d.

Bulgarian officials have said the project is a priority for the EU as it could help with gas supply diversification and security, and meet the EU's goals of increasing LNG imports.

The storage capacity increase was also designed to promote gas trade and improve market integration in southeast Europe by enhancing competition and improving gas market liquidity in the region.

Countries of southeast Europe were historically dependent on Russian gas imports, but the region has increasingly turned to LNG and gas imports from Azerbaijan since Moscow's invasion of Ukraine in February 2022.

Bulgaria in particular is looking at increasing imports of regasified LNG via Greece.

Spot LNG prices for delivery to southern Europe remain high, although well down from their August 2022 highs of almost $75/MMBtu.

Platts, part of Commodity Insights, assessed the DES East Mediterranean marker on Aug. 12 at $12.86/MMBtu.