U.S. hedge fund Elliott Investment Management is in preliminary discussions to acquire a stake in a package of infrastructure assets that includes the Bulgarian section of the TurkStream natural gas pipeline.

According to a report by The Wall Street Journal, citing sources familiar with the matter, the New York-based fund recently signed a nondisclosure agreement with Bulgaria’s state gas operator Bulgartransgaz.

Elliott representatives reportedly met with Bulgarian government officials in Sofia in late April to discuss the potential investment that could see more Russian gas supplied to European markets. 

The targeted infrastructure includes the Bulgarian extension of TurkStream, a critical conduit for transporting Russian natural gas to Europe via Türkiye and the Black Sea. 

Following the cessation of transit via Ukraine on Jan. 1, 2025, TurkStream became Gazprom's sole operational pipeline route for delivering gas to the continent. 

The pipeline supplies gas to countries including Serbia, Hungary, Romania, Greece, Bosnia and Herzegovina, and North Macedonia, with a total annual capacity of 31.5 billion cubic meters.

The potential deal, if finalized, could help secure the flow of Russian gas into Europe. 

Bulgarian officials reportedly believe an investment by Elliott could shield the infrastructure from future sanctions and potentially facilitate expansion.

While this could sound like good news to Russia, whose economy largely relies on energy exports, EU leaders are working to phase out their dependence on Russian energy sources. 

So far, the European Commission has proposed ending Russian gas imports by 2027. However, this strategy has faced opposition from member states that are heavily reliant on the supply, such as Hungary and Slovakia.

According to the WSJ report, Bulgarian officials see a potential U.S. investment as an opportunity to strengthen bilateral ties with Washington and shield their energy infrastructure against future punitive measures.