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Bulgaria might lose gas contract with Azerbaijan?

Oil&Gas Materials 27 March 2017 15:59 (UTC +04:00)
Bulgaria may lose the gas contract with Azerbaijan if the construction of Interconnector Greece-Bulgaria (IGB) is not completed by 2020.
Bulgaria might lose gas contract with Azerbaijan?

Baku, Azerbaijan, March 27

By Leman Zeynalova – Trend:

Bulgaria may lose the gas contract with Azerbaijan if the construction of Interconnector Greece-Bulgaria (IGB) is not completed by 2020, said Bulgaria’s Energy Minister Nikolay Pavlov in an interview with "24 chasa".

Bulgaria’s Bulgargaz has a long-term contract for 25 years with Azerbaijan’s state oil company SOCAR for supply of 1 billion cubic meters of natural gas per year from Shah Deniz 2, said the minister, adding that this is one third of Bulgaria’s domestic consumption.

“We need to be able to receive this gas. If the interconnector is not ready, we may lose the contract. The gas interconnector is a continuation of the Southern Gas Corridor and is part of the Vertical Gas Corridor of the European Union,” added Pavlov.

The minister talked about the shortcomings in the implementation of the IGB project.

“There is a delay in the preparation of a cost-benefit analysis that will show what further grant funding we have to seek from the EU. ICGB has been aware of the necessity for such an analysis since March 2016. So far, this analysis hasn’t been ready and its assignment is delayed,” he said.

The utilization of the 45 million-euro grant provided by the European Commission in 2009 hasn’t started yet and the deadline for its utilization is 2018, he said, adding that there is a real risk for these funds to be lost.

“The technical design is another reason of concern. It was approved by the Ministry of Regional Development and Public Works on 15 January 2016 with one-year validity, which actually expired on 15 January 2017. The request for its extension was submitted on 20 January 2017. The deadline had been missed,” added Pavlov.

IGB is a gas pipeline, which will allow Bulgaria to receive Azerbaijani gas, in particular, the gas produced from Azerbaijan's Shah Deniz 2 gas and condensate field. IGB is expected to be connected to the Trans Adriatic pipeline via which gas from the Shah Deniz field will be delivered to the European markets.

The initial capacity of IGB will be 3 billion cubic meters of gas.

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