Minister Hristov: The gas connection with Serbia will be ready in October and there is an opportunity to increase the capacity to 3.2 billion cubic meters

Marinela Arabadzhieva

The Greece-Bulgaria gas interconnector (IBS) will be ready in October. This was stated by the Minister of Energy, Rosen Hristov, who, together with the executive director of Bulgartransgaz, Vladimir Malinov, inspected the activities along the route of the future gas pipeline. The inspection was carried out in the presence of the member of the supervisory board of "Glavbolgarstroy" Kalin Pashov. The start of construction was given on February 1 this year.

"Today we inspected the project. We are absolutely on schedule right now. We are even in reserve. The project will be completed on time by the Bulgarian side and within the budget. For project management, we applied the approach of the Greece-Bulgaria interconnector, which allowed us to catch up and launch it on time. All structures work, we regularly exchange information, so we not only control, but also support the process," said Minister Rosen Hristov. He recalled the decision taken during the week to expropriate land for the gas measuring station. He added that the entire route is being worked on with excellent mobilization and excellent project management.

"At the moment, there are no worries about the completion of the site on time," the energy minister was categorical. According to him, already in the next season it will be possible to rely on the supply of blue fuel from the gas pipeline. Rosen Hristov, in response to a question, specified that "the infrastructure is what allows our country to transport gas purchased from non-Russian sources to Bulgaria".

"At the moment, we envisage the interconnector being used for the Bulgaria-Serbia direction, as Serbia is still quite dependent on Russian gas and they have reserved capacity at the Alexandroupolis terminal." It is expected that a larger part of the flow will go from south to north to Serbia, but this possibility of reversible supplies gives an additional security in case of a need for gas to rely on supplies from Europe," he pointed out. It is expected that the gas pipeline will be used already in the next heating season, i.e. from November this year.

Capacity increase to 3.2 billion cubic meters

At the moment, the project for the gas connection with Serbia is for the transfer of 1.8 billion cubic meters, but work is already underway on the possibility of increasing it to 3.2 billion cubic meters of gas per year. In this regard, Minister Hristov specified that at the moment, on the initiative of our country, a large-scale analysis of the natural gas market is being prepared together with eight other countries from South-Eastern and Central Europe "in order to help other countries to diversify their supplies, as we did in Bulgaria".

"We are ready to build an additional compressor station at the beginning of the interconnector to increase the capacity to 3.2 billion cubic meters," added Hristov. In his words, this provides the opportunity to guarantee the energy security not only of our country, but also of other countries in the north.

"Actually, we have to do the market test first. We have the support at the political level, because in the coming years we expect the flow of natural gas to turn from East to West and North, and our gas transmission network is of key importance for this," said the executive director of Bulgartransgaz, Vladimir Malinov, specifying that this ensures the access of natural gas, both from Azerbaijan and the other Caspian countries, but also from the LNG terminals in Greece and Turkey.

"Preliminary data indicates that there is market interest from all our neighboring countries, but also reaching Central Europe. Only when our hope is faith is that we will have a positive result of the market test, then we will proceed with the expansion not only of the Bulgaria-Serbia interconnector, but also another part of our infrastructure, which will allow the transfer of natural gas to neighboring countries", he added.

According to Malinov, the market test is expected to take place within the next few months, after formalization at the political level. "Based on the results, we will proceed to actually binding contracts for the reservation of requested capacity," he said.

Natural gas from Chiren

The minister also commented on the "expensive gas pumped into the gas storage in Chiren". "We are still working on a proposal within the European directive to compensate for this high price, that is, to compensate for the difference between the pumped gas and the market at the moment. I expect within a week or two to finish this analysis process and next week we will invite the interested parties, the gas associations, so that we develop a working scheme. The problem is quite serious," said Hristov once again.

He specified that there was a European directive issued, "according to which we have a commitment to fill the gas storage by a certain schedule, which we fulfilled, and this directive also provides for the possibility and necessity of making such compensation, since it was expected that there would be a difference in the price during injection and the cost during its use. The idea is to compensate to the level of the market, that is, the gas we take out of there (PGH Chiren) does not affect the end customer".

The executive director of Bulgartransgaz, for his part, outlined what the benefits of the compensation would be.

"This compensatory mechanism is extremely important and will contribute in two ways. Because according to the European legislation, we also aim to fill the gas reservoirs for 2023, Vladimir Malinov indicated for his part. So the quantities that will remain at the moment, apart from being competitively priced, will also help us meet the target of having a 90% warehouse capacity as of November 1st this year. According to him, in the next heating season there will be an opportunity to extract gas in a competitive market environment.

The gas storage facility in Chiren is currently filled to 77% and the goal is to preserve the quantities, to compensate, and when replenishing, the price is attractive and close to the market price. Thus, in the next heating season, the price is expected to be lower.

Energy security

All these actions provide an opportunity for our country to become an energy hub, Minister Hristov also pointed out.

"Turning the country into an energy hub first brings us direct income from sharing the maximum of the infrastructure we have built and in the form of various fees, commissions and in the form of various types of gas trading. The other plus is that we become a strategically important partner, which gives us a great advantage on the political scene as well. That is, to protect our interests and to partner with neighboring countries. I have always said that for energy security, the entire region must be stable, and in Bulgaria we are working very actively in this direction. The work on all these projects already shows the importance of Bulgaria in the region. Therefore, it is very important that this project is completed on time, as we have promised, so that all countries can see that we are the partner that delivers what was agreed."

According to him, our country is also working on the issue concerning a platform for joint gas purchases. When it will be completed is quite complex, but for now things are going according to schedule there as well.

The project for the gas connection Bulgaria-Serbia is being built in stages, and currently up to 80% of the pipes are along the entire 170 km route. The most difficult process with welding is also moving on schedule. At the moment, up to 40% of the welding process of the constructed sections has been completed.

The project for the construction of the intersystem gas connection Bulgaria-Serbia (IBS) is a project of "common interest". It is part of the priority corridor for connecting gas transmission networks in Central and South-Eastern Europe (NSI East Gas). IBS is a priority project of the High Level Group on Interconnection in Central and South Eastern Europe - CESEC. It was declared a Site of National Importance on February 15, 2013.

The IBS pipeline

The intersystem gas connection with Serbia (the IBS gas pipeline) has a total length of 170 km from the town of Novi Iskar in Bulgaria to the town of Nis, Serbia. 62 km of them are being built on Bulgarian territory. The project has the priority of a "project of common interest" of the EU. The gas pipeline passes through four municipalities.

The organizer of the construction on the Bulgarian territory is "Bulgartransgaz", and on the Serbian - JP SRBIJAGAS.

The construction and commissioning of the gas pipeline will provide an opportunity for diversification of natural gas supplies for Bulgaria and the region, by providing new sources and routes, increasing the security of supplies, gradually increasing consumption, increasing investor interest in the border regions, through which passes.

After its construction, the gas connection will have a throughput capacity of 1.8 billion cubic meters of gas per year with the possibility of reverse flow.

The total value of the project is 76,674,469 euros, and the amount of grant funding is 27,602,809 euros.

The total value of the contract with DZZD "International Gas" is up to BGN 139,777,777.77 excluding VAT. The activities of the subject of the agreement are within the scope of the concluded grant agreement for non-grant financial assistance from the Connecting Europe Facility.