BAKU, Azerbaijan, Aug.31
By Leman Zeynalova - Trend:
Bulgaria and Azerbaijan are in talks for reaching an agreement on gas supplies at the next stage, Trend reports with reference to Bulgarian Energy Holding (BEH).
The agreement for gas supply from Azerbaijan and the documents for its implementation foresees that “Bulgargaz” EAD, a subsidiary of BEH, shall receive supplies at the delivery point Komotini in Greece.
“This is the point of interconnection between the Trans-Adriatic Pipeline (TAP) and the Interconnector Greece-Bulgaria (IGB), through which it is envisaged that natural shall reach Bulgaria. The Agreement does not foresee that the Bulgarian side can unilaterally designate or change the delivery point, which means that the temporary change of the delivery point requires the approval of the Azerbaijani supplier.
Due to the ongoing construction of the Interconnector, the delivery point Komotini was not put into commercial operation as of the commencement date for supplies under the Agreement – 31.12.2020., and is expected to enter commercial operation in the middle of 2022. This required the execution of negotiations with the Azerbaijani supplier, which resulted in achieving an agreement for a temporary use of another delivery point on the territory of Greece and transportation of natural gas to Bulgaria through an alternative route for the period from 31.12.2020 to 30.09.2021,” the company said in a statement.
The IGB project enables the transmission of gas and supplies from new sources, making it key to Bulgaria's energy security and part of the national plan for diversification of gas sources. The capacity of the project is 3 billion cubic meters with the option to reach 5 billion cubic meters. Half of the capacity of the interconnector is already reserved, as four of the shippers are completely new to the Bulgarian market. A contract has been signed for the supply of 1 billion cubic meters from Shah Deniz 2 based on a long-term contract with Bulgargaz.
The conclusion of the contract for construction of the interconnector dates back from the end of 2019, as one of the main commitments of the project company in structuring IGB is the obligation to control costs within the approved budget, which will ensure competitive transmission for customers. The delay in construction activities and the approved update of the construction schedule for the end of 2021 are due to objective reasons related to the global coronavirus pandemic and do not lead to direct losses. The established alternative route through the Greek system and Siderokastro provides a temporary solution for servicing the contract with Azerbaijan until IGB is put into commercial operation.
“The possible volumes of natural gas were agreed with the Azerbaijani side, along with the conditions for their supply to the temporary delivery point. The available capacities, applicable procedures and commercial conditions of all gas transmission systems, through which natural gas is transported along the alternative route to the Bulgarian system, were taken into consideration. Analogous negotiations are currently being conducted for reaching an agreement concerning supplies for the period 1.10.2021-30.06.2022.”
Bulgarian Energy Holding EAD expects that the Interconnector Greece-Bulgaria will be put into commercial operation in the period, stated by the project company, until 01.07.2022, which will allow the full volume of Azeri gas supplies to reach Bulgaria, in accordance with the conditions of the Agreement.
“Bulgarian Energy Holding EAD continues to provide financial and other types of support to its subsidiaries complying with their operational independence – as a shareholder in ICGB AD - for completion of construction of the Interconnector in the shortest possible period and for extension of the temporary agreement for receiving natural gas from Azerbaijan until its completion, including by acting as a guarantor of liabilities of Bulgargaz EAD under the issued bank guarantee for securing the implementation of its obligations under the supply Agreement.
In conclusion, we point out that the Agreement is subject of foreign law and all actions and approvals of Bulgarian Energy Holding EAD and Bulgargaz EAD have been undertaken following relevant analysis, checks and receipt of specialised legal advice from consultants qualified to practice such law. This is necessary considering that any free interpretation of the Agreement can be misleading and can harm the relationship with the Azerbaijani supplier and the interests of the Bulgarian State respectively,” said BEH.
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