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Bulgaria reveals losses due to delays in IGB’s construction

Oil&Gas Materials 7 January 2022 13:58
Bulgaria reveals losses due to delays in IGB’s construction

BAKU, Azerbaijan, Jan.7

By Leman Zeynalova – Trend:

Because of the delays in construction of the Interconnector with Greece (IGB), Bulgaria loses €750,000 a day, the lost benefits for Sofia for the last year amounting to over €250 million, said Bulgarian Energy Minister Alexander Nikolov in parliament, Trend reports with reference to EURACTIV.

Bulgaria will continue to lose even more revenue because of the never-ending construction, Nikolov said.

“The goal is for the gas interconnector with Greece to be put into operation by 1 July, so that it is ready for the next heating season and Bulgaria receives the entire amount of natural gas under the agreement with Azerbaijan,” added the minister.

He pointed out that a new builder could be sought to complete the pipeline. According to the construction contract, the company owes €90,000 a day in penalties from 1 January this year.

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.

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Follow the author on Twitter: @Lyaman_Zeyn

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