On 1 April Bosnia and Herzegovina started receiving gas supplies from Russia via the TurkStream pipeline, facing the possibility of US sanctions.

The Energoinvest company, which is the authorised provider of gas for the Federation of Bosnia and Herzegovina entity, in whose territory most of the imported gas is used, has signed with the Russian state-owned company Gazprom an annexe to an earlier agreement which specifies that as of 1 April gas will be delivered via a new route, a pipeline called the TurkStream.

Until now BiH received gas by a pipeline running via Ukraine and Hungary and that should have stayed so until the end of 2023. Energoinvest officials claim they had to accept the new demand by the Russian supplier.

“Gazprom left us neither room nor the possibility to continue transport via the Hungarian route as of 1 April,” Energoinvest director Bisera Hadžialjević said.

The annexe to the agreement on gas supply for BiH, which the Russian side set as an ultimatum, was signed despite a clear warning by the US Embassy that it could result in sanctions because the current US administration sees the Russian projects TurkStream and Nord Stream as an attempt by Moscow to undermine European stability and make the continent fully dependent on Russian gas.

Andy Allen, an advisor on economic affairs at the US Embassy in BiH, told BiH Foreign Ministry official Nijaz Čardaklija in March that the White House would soon pass a decree on sanctions against individuals, companies and organisations involved in any way in the implementation of the Nord Stream 2 and TurkStream projects, shows a note Čardaklija made during the meeting with Allen, whose copy was published by the local media.

After the relevant decision is made, Washington will give one month to everyone involved in the projects to withdraw, otherwise, they will face sanctions.

Switching to TurkStream leaves BiH without alternative

Commenting on Energoinvest's decision, Jasmin Salkić, director of the BH Gas company, which is the main distributor of gas in the BiH Federation and operates the gas supply network, said that agreeing to Gazprom's demands unconditionally was harmful to BiH even without possible US sanctions.

He warned that the existing agreement on gas supply via Ukraine and Hungary envisages a lease for pipeline capacity along that route for the next two years. Early termination of the agreement entails the obligation to pay a penalty, in BiH's case of as much as $23 million, within 15 days from the issuing of the invoice, he warned.