IGB inks key agreements for full mobilization for construction

IGB inks key agreements for full mobilization for construction

Baku, Azerbaijan, Oct.10

By Leman Zeynalova – Trend:

Key agreements have been signed for full mobilization for construction of the Interconnector Greece-Bulgaria (IGB), which envisages transportation of Azerbaijani gas to Bulgaria, Trend reports citing ICGB AD, project company.

During a high-level meeting an Intergovernmental agreement on the settlement of the gas pipeline tax regime was signed, together with a loan agreement from the European Investment Bank and a number of other key documents setting the overall financing of the project.

Today, during a formal ceremony in the presence of the Ministers of Energy of Greece and Bulgaria, a number of important agreements and contracts for the IGB project were signed, regulating the financing and confirming the business model of the interconnector. Their successful completion is a prerequisite for the full mobilization for the construction of the gas interconnector.

During the event, the Bulgarian Energy Minister Temenuzhka Petkova and her Greek counterpart Konstantinos Hadzidakis signed an Intergovernmental Agreement between the two countries, which declared continuous support for the project and stabilized the tax regime of the pipeline for the next 25 years.

Under the patronage of the two ministers, the Executive Officers and shareholders of the project company ICGB signed a number of important agreements and contracts, confirming the financial structure of IGB as well as settling relations with gas shippers and selected contractors for the construction and supply of line pipes for the purposes of project.

The two signed a 109-million-euro reciprocal loan agreement with the European Investment Bank (EIB). The loan will be secured by BEH and backed by a state guarantee. The confirmation of the financial structure of the IGB pipeline also allows the project company to activate contracts for the supply of line pipes and for the design, supply and construction of the interconnector. The contracts with the selected subcontractors - the Greek companies Corinth Pipework Industries S.A. and AVAX S.A. were also signed during the visit of Minister Hadzidakis.

During the official ceremony, binding contracts were also signed with the shippers who have reserved capacity in the pipeline. A long-term commitment has been arranged with the companies Bulgargaz, DEPA S.A. and Edison who will be providing gas transmission services, including gas through the Southern Gas Corridor, to the Bulgarian market. The actual transfer will start after the IGB gas pipeline is put into commercial operation, with a planned deadline for the end of 2020, which coincides with the schedule for the completion of TAP.

The shareholders of the project company BEH and IGI Poseidon signed an updated shareholder agreement, which adopted the final IGB business plan and the final budget for the construction of the gas connection. They also signed a decision approved by the General Assembly of ICGB for the capital increase of the project company by 42.4 million euros.

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 TAP 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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Follow the author on Twitter: @Lyaman_Zeyn

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