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IGB to change financial conditions under Contract for engineering, procurement

Oil&Gas Materials 5 February 2021 11:15
IGB to change financial conditions under Contract for engineering, procurement

BAKU, Azerbaijan, Feb.5

By Leman Zeynalova – Trend:

ICGB AD, a project company for the construction of Interconnector Greece-Bulgaria (IGB), is to make a decision to change the financial conditions under the Contract for engineering, procurement and construction, respectively concluding an additional agreement, which provides more working capital to the contractor in order to meet due advance payments to equipment manufacturers and speed up deliveries, Trend reports citing the company.

The other targets include:

Active involvement of the team of the Assignor in the activities to alleviate the environmental restrictions applicable to the crossings of large water bodies, conducting the procedures under the Environmental Protection Act with resources of the Assigner in order to obtain the final statements of the competent authority.

Introducing procedures on renewal of necessary permits and synchronizations using the Assignor’s resources;

Introducing policy and procedures for control on the construction site to prevent or minimize the risk of COVID-19 spread among personnel, directly involved with construction.

Full Assignor’s commitment to the process of compensating the agricultural land owners aiming at provision of easy and quick access of the Contractor to the affected plots of lands and avoiding compensation disputes.

Despite the reduced pace of construction activities and the cumulative delay due to a combination of factors, the Greece-Bulgaria Gas Interconnection project is in an irreversible phase and according to the Contractor's forecast, the site should be handed over to the Assignor by the end of 2021.

The gas pipeline is 182m long and has transmission capacity of 3bcm/year with the option to come to 5bcm/year, after an upgrade through a compressor station. The total investment cost is estimated to be 240mln w/o VAT of which approximately €220 mln are capital expenses and €20 mln development costs.

The project is perceived as crucial for Bulgaria and the region due to its strategic importance for providing diversification of sources and routes of natural gas supply to Bulgaria.

The route of the gas pipeline is divided into 7 main lots, the shortest being 9.55 km long and the longest - 71.90 km. 106 km of the route in Bulgaria will be completed with automatic welding, and the remaining 45 km - by manual welding.

IGB will provide the shortest and the most competitive route along the Southern Gas Corridor for bringing natural gas to Bulgaria.

Currently, the contractor for the engineering, procurement and construction contract - the Greek company J&P AVAX S.A, has submitted a request to extend the project implementation period with an indicative deadline of the end of 2021. The request is based on the global spread of the COVID-19 pandemic. The request from the contractor is yet to be discussed by the shareholders of the project company. Meanwhile, with the support of the national governments of the two countries, all parties continue to work on ways to optimize the activities so that the pipeline is successfully implemented as soon as possible, while holding the health and safety of all employees on site as a top priority.

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Follow the author on Twitter: @Lyaman_Zeyn

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