State-owned gas transportation operator Bulgartransgaz has initiated talks with Azerbaijan for gas supplies beyond the present contract, deputy energy minister Zhecho Stankov said during his presentation at the 12th Annual Conference “Strategic Infrastructure and Investments in Bulgaria” June 15.
According to the deputy minister, Bulgaria has been considering several sources for its plans to set up an energy hub near the Black Sea port of Varna. One of them could be from Shah Deniz 2, where Bulgaria is already a buyer.
“The Bulgarian company is considering contracting some of the free volumes of gas from Azerbaijan’s Shah Deniz 2. This is about 3bn m³/yr,” he said, pointing out that the talks are at a very early stage, a report says.
The late energy minister Natik Aliev said that the potential of the field is much higher than the 16bn m³/yr sold and total annual production could be as much as 30bn m³/yr.
Although it is likely a spare amount of gas from Shah Deniz 2 will be available for export there are no exact volumes and schedule for extra delivery to Bulgaria, Socar sources told NGW.
The company has had discussions with Bulgarian as well as other partners in the regular course of work. But it does not have any firm contracts to supply Bulgartransgas or any schedule for future gas export to Bulgaria after 2020, they said.
Bulgaria has a long term contract for 1bn m³/yr from Shah Deniz 2. It will be delivered via Interconnector Greece-Bulgaria that should be built in time for first gas beyond Turkey in 2020.
IGB is moving forward according to plan, said CEO Teodora Georgieva. “The project is on track. All land acquisition procedures in Bulgaria have been completed, a construction permit is expected in the third quarter of 2017 in Bulgaria and in the fourth quarter in Greece,” she told the same conference.
The €240mn Interconnector that will provide a direct link to the Trans-Adriatic Pipeline (TAP) will have an initial capacity of about 3bn m³/yr. The European Union has already provided €45mn, said Georgieva. IGB has been applying for additional funds from the Operational Program “Innovation and Competitiveness”. In addition to European funds, the Bulgarian state gave €110mn in guarantees to build the line.
According to Bulgaria energy ministry statement, an open tender for the selection of an IGB builder is due to be announced with plans to start construction in the first quarter of 2018.
In order to start receiving gas from Azerbaijan in 2020, we should definitely start the construction in 2018 so as to be ready, said Georgieva in her interview with Trend newswire early this year. The project comprises 31 km ih Greece and 151 km in Bulgaria. The project equal shareholders are Bulgarian Energy Holding (50%) and IGI Poseidon (JV between Greece Depa and Italy’s Edison), she added.
Other sources for Balkan gas hub
Bulgaria is also eyeing its involvement in an LNG terminal mooted for Alexandroupolis, Greece. “We are discussing an opportunity for an investment by the Bulgarian Energy Holding in the project, which means that the IGB will also be a possible supply gateway through the LNG terminal for Bulgaria,” she said.
Energy infrastructure is structurally relevant for the development of the European Energy Union for ensuring the security of supply, said Stankov. Bulgaria is working on upgrading and extending the gas transmission system. One of the important achievements according to him is the completion of the first interconnector with Romania.
Meanwhile the pre-feasibility studies for interconnector with Turkey have been completed and a specific route has been submitted, said Stankov. The first phase relating to the grant funding of the Bulgarian-Serbian interconnector has also been completed.
IGB is a necessary element of the Balkan gas hub, but neither it nor the other interconnectors are enough to bring it into being, Stankov said. The region needs a lot more storage capacity to house gas from different suppliers, he explained. The plan to expand Chiren is under way with a second well being drilled. It will be put into operation soon.
The implementation of a regional gas hub project would cost €1.4bn – €2.4bn ($1.52bn – $2.6bn) and could be completed by the end of 2022, according to Bulgarian gas transmission system operator Bulgartransgaz’ 2017-2026 network development plan, which was published earlier this month for public discussion. “The estimated value is to be specified by the forthcoming feasibility study,” the document said.
Bulgartransgaz said the EC has approved a grant for almost €1mn to study the proposal in detail. The gas hub has the potential to connect all main gas transmission projects in southeast Europe and to ensure transparent and non-discriminatory access of European clients to large suppliers, the company added.
Gas can be fed into the hub from Bulgaria’s potential gas deposits in the Black Sea, via interconnectors with Greece and Turkey, from the Caspian region or the eastern Mediterranean, or from the Greek and Turkish LNG terminals. The gas hub could also be supplied via an interconnector with Romania. Explorers are hoping that part of the sea will have significant deposits of gas.
Russia’s Gazprom will remain significant supplier to Bulgaria and Balkan gas hub. Bulgaria’s energy minister Temenuzhka Petkova and Gazprom CEO Alexei Miller signed a road map for examining the development of the gas transmission infrastructure on the territory of Bulgaria in line with the rules of the EU, the ministry said.
Petkova and Miller met in St Petersburg during the international economic forum June 3 to discuss long-term arrangements for deliveries to Bulgaria. Russian gas exports to Bulgaria have grown annually since 2013, last year reaching 3.18bn m³, and are continuing to grow this year.
Miller also updated Petkova on the progress of the TurkStream gas pipeline project, saying new capacity in the Black Sea area will significantly contribute to security of supply in south and southeast Europe, including Bulgaria. Petkova told Miller about the development and investments in the gas transmission system of Bulgaria, as well as the concept of a Balkan gas distribution hub, the statement said.