Bulgaria to receive 225mcm of Azeri gas by September end, as IGB link delayed

Luka Dimitrov

29-Jan-2021

LONDON (ICIS)–Bulgaria is set to receive close to 225 million cubic metres (mcm) of Azeri natural gas by the end September, state supplier Bulgargaz had told ICIS.

The gas will flow via the existing 3.68 billion cubic metre (bcm) capacity link at the Kula-Sidirokastro Greek border point, due to delays in the 3bcm/year Bulgaria-Greece Interconnector (IGB),

“The transportation of Azeri gas on this route is temporary, for a period of nine months until the end of gas year 2020. The quantities that will be delivered for this period are approximately 225mcm and are in line with the technical capabilities of the Greek gas transmission network,” added Bulgargaz spokesman.

The IGB link is expected to commence operations in October 2021. The Azeri gas will continue along this route in the agreed volume, added the state supplier.

Bulgaria reserved 1bcm of capacity per year based on a 25-contract between Bulgargaz and the Azerbaijan state oil and gas company SOCAR.

It is not clear whether Bulgargaz will receive the whole 1bcm volume by the end of the year. The state supplier did not comment whether it has negotiated a change in the contract for this year’s volume with SOCAR.

The 10bcm/per year Trans Adriatic Pipeline (TAP) delivered the first Azeri gas to Bulgaria and Greece at the end of 2020, the pipeline operator said on 31 December. TAP is expected to increase gas exports to southeast Europe and diversify its supply portfolio.

IGB DELAYED

TAP is expected to be linked with the new IGB project. Construction of the gas link is at an advanced stage but has been delayed due to the emergence of the coronavirus.

The pipe was expected to start commercial operations by July 2021, Teodora Georgieva, chief executive officer/executive director at project company ICGB, told ICIS . Due to the pandemic, the link is likely to be operational at the start of October, said Bulgargaz.

Currently, Greek company J&P AVAX, the contractor for the design, supply and construction contract has submitted a request to extend the project implementation period with an indicative deadline of the end of 2021.

The request is justified by the global spread of the coronavirus pandemic, which continues to make it difficult to maintain the steady pace of work set out in the preliminary plan, an official IGB spokeswoman told ICIS.

“There are also complex technological challenges that also require time. The request from the builder to be discussed by the shareholders of the project company is yet to be discussed. Shippers, the national regulatory authorities of Bulgaria and Greece and the European Commission will also be officially notified,” added the spokeswoman.

On 27 January, the Greek parliament ratified an agreement for cooperation with Bulgaria in regard to the IGB. The agreement focuses on mutual commitments for the construction of the pipeline and for the transportation of natural gas after the project is completed. The two neighbouring countries have already agreed on the taxation status of IGB and the distribution of profits.

The IGB is designed to bolster Bulgaria’s gas supply diversity and reduce its dependence on Russian producer Gazprom.

According to TAP operator, Bulgaria will be able “to cover up to 33% of its total gas demand through TAP after the completion of the IGB”.

Diversification will be also aided by Bulgaria’s participation in the construction of an LNG terminal in Alexandroupolis, expected online in 2023.

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