Bulgarian minister: We’re moving towards successful implementation of Southern Gas Corridor

Trend’s exclusive interview with Bulgaria’s Energy Minister Temenuzhka Petkova ahead of the 6th meeting of the Southern Gas Corridor Advisory Council

Question: Baku is hosting the Southern Gas Corridor Advisory Council's meeting. What will be Bulgaria's focus on this event?

Answer: I am honoured to participate in the Fifth meeting of the Southern Gas Corridor Advisory Council. I recognize the serious progress that has been made and the many resolved issues and challenges that have been addressed since the First Council meeting in February 2015.

At the forthcoming meeting, we will be able to take stock of what has been achieved over the last five years and that we are moving towards the successful implementation of the ambitious and large-scale project of the Southern Gas Corridor – a project of exceptional importance not only for the Republic of Bulgaria, but also for the countries of Southeast Europe and the European Union.

Bulgaria is an integral part of the development of the Southern Gas Corridor through the Interconnector Greece-Bulgaria.

Our country’s focus during the Advisory Council will be at the interconnector project Greece–Bulgaria. The project is essential for the diversification of gas supplies to Bulgaria and other countries in the region. The importance of IGB for Bulgaria is also determined by the need to ensure delivery of the contracted 1 billion cubic meters a year of Azerbaijan natural gas from Shah Deniz II field for Bulgaria, starting at the end of 2020, in synergy with the TAP. The building of the interconnector has started and we expect the construction company to complete the construction by the end of 2020, in synergy with the commissioning of the TAP. This will allow alternative supplies not only for our country, but also for the entire region of Southeast Europe.

Q.: This year will mark the start of gas deliveries via the Southern Gas Corridor. Bulgaria is one of the importers of this gas through the IGB. How do you see the energy map of Europe after the commissioning of the Corridor?

A.: The introduction into commercial exploitation of the interconnector Greece-Bulgaria is a key to diversifying sources and routes for the supply of natural gas not only in our country, but also throughout the whole region of Southeast Europe. In line with its main energy policy priorities, the Bulgarian Government has actively worked to positioning our country as a regional gas hub. The interconnector between Greece and Bulgaria and gas supplies via the Southern Gas Corridor are among the most important elements for the delivery of this concept. They are being implemented in synergy with other gas projects in the region, such as the LNG terminal near Alexandroupolis, Greece and others. The Interconnector Greece-Bulgaria is also strategically important for the implementation of the Vertical Gas Corridor, which connects the gas networks of Greece, Bulgaria, Romania and Hungary. Thus, after the completion of these projects, the possibility to transport natural gas from Azerbaijan through the interconnector Greece-Bulgaria, through the gas transmission network of Bulgartransgaz EAD, the other interconnectors to Romania, Serbia, the Republic of North Macedonia and their neighbouring countries will be ensured.

Q.: How do you assess the progress on construction of the IGB? Do you believe that IGB will be ready on time to bring 1 bcm of gas to Bulgaria? When approximately do you expect first deliveries of Azerbaijani gas to Bulgaria?

A.: The implementation of the interconnector Greece–Bulgaria is moving at an accelerated pace so that it can be put into commercial operation by the end of this year, entirely in synergy with the TAP. The field along the route is currently being cleared and pipes supplied. By 24 February at the main camp near the town of Haskovo nearly 900 pipes with a total length of over 15 km are already delivered. We have the assurance of the contractors with whom I have regular meetings that the preliminary set timetable will be implemented and the interconnector will be put into commercial operation by October 2020. At that time we also expect the delivery of the first 1 bcm of natural gas for which Bulgargaz has concluded a contract with the Azerbaijan SOCAR.

Q.: How do you see the prospects for expanding the IGB to other Balkan countries such as Romania and Serbia? Which measures should be taken in this regard?

A.: As you are probably informed, at the end of 2018 the National Assembly of the Republic of Bulgaria decided to extend the Bulgarian gas infrastructure from the Turkish-Bulgarian to the Bulgarian-Serbian border. Pursuant to this decision, Bulgartransgaz conducted the necessary procedures and then the construction of the new pipeline started and is currentlyongoing. The first 11 km of the pipeline were put into commercial operation in the autumn of last year.

It should be noted that the expansion of the Bulgarian gas transmission network from the Turkish-Bulgarian to the Bulgarian-Serbian border has 22% free capacity at the exit point to Serbia – approximately 3 billion cubic metres. This means that in the future any interested party will be able to transport gas through this infrastructure. I expect the completion of this project to change significantly the gas supplies landscape, to strengthen Bulgaria's strategic location so as to guarantee the energy security of the region.

Q.: How will the Bulgarian government, in particular the Ministry of Energy ensure the secure and successful implementation of IGB project in the construction phase?

A.: Bulgaria has played a key role in the financial structuring of IGB: the Bulgarian state had provided a sovereign guarantee of EUR 110 million, which ensured favourable financing for the project from the European Investment Bank. Furthermore, €39 million grant was allocated from the Regional Development Fund under the Innovation and Competitiveness Operational Programme of the EU funding for Bulgaria.

The successful completion of the IGB project and its timely introduction into commercial exploitation are priority tasks with a view to diversifying gas supplies. For the full mobilization of the contractors and the completion of the project within the set time schedule, regular meetings are held on my initiative at the Ministry of Energy in order to take account of the activities related to the implementation of the project. These meetings are attended by representatives of the project company “ICGB”AD, the line pipe supplier – “Corinth Pipeworks”, the constructor – “JP AVAX” and of the owner’s engineer – “Consortium Tibey”. We have the assurance of the suppliers that the production of pipes is carried out according to the schedule. We expect deliveries of the first production batch to be completed in March. This will ensure availability of all types and sizes of pipes needed to build the interconnector.

We are also making regular on-the-spot inspections to make sure that progress is made. The last such visit was on 20 February. All our efforts are aimed at the timely introduction of the connection in commercial exploitation.

Q.: In our last interview you said that SOCAR is studying Bulgarian gas distribution sector. Has the company already prepared feasibility study on investment opportunities in the gas distribution sector in Bulgaria? Are you holding talks in this regard?

A.: In connection with the agreement reached in 2018, SOCAR had several meetings and received detailed information from the Ministry of Energy and the EWRC on the possibilities for investments in the gas distribution sector in Bulgaria. SOCAR then instructed a large international advisory company to carry out a feasibility study on the implementation of such a project.

According to the information provided by our SOCAR partners, the study has been completed and its conclusions are positive. In this regard, we will discuss these perspectives at a bilateral meeting with Minister Shahbazov within the framework of the Advisory Council meeting. Taking into account these positive results, we believe it is feasible this year SOCAR to start initial activities in gas distribution on the territory of Bulgaria.