Market test for expanding Interconnector Greece-Bulgaria due in latter half of 2023 - Teodora Georgieva (Exclusive Interview)

Oil&Gas Materials 1 June 2023 07:15 (UTC +04:00)
Market test for expanding Interconnector Greece-Bulgaria due in latter half of 2023 - Teodora Georgieva (Exclusive Interview)
Laman Zeynalova
Laman Zeynalova
Read more

BAKU, Azerbaijan, June 1. The market test for expanding the Interconnector Greece-Bulgaria is planned to be held in the latter half of 2023, Teodora Georgieva, Executive Officer of the ICGB, the pipeline operator, said in an exclusive interview with Trend on the occasion of the Baku Energy Week.

"In order to evaluate the need for increased capacity, ICGB is obligated by national regulatory authorities to carry out a market test. This market test must be conducted within three years from the commencement of commercial operation, which took place in October 2022. Our plan is to commence the market test procedure quite early in that timeframe - in the latter half of 2023 – given the changed dynamic in the region. During the test, traders interested in additional capacity will be given the opportunity to register their interest.

So far, even in the first few months of commercial operations of the IGB pipeline, we’ve seen significant interest in this new, safe and diversified route for gas deliveries that we managed to establish. Having said that, I expect there will be active participation in the upcoming market test," she said.

Georgieva pointed out that since the early planning phase of the project, the regulatory framework has included the provision for increasing the pipeline's capacity to 5 billion cubic meters per year, subject to market interest.

"Currently, we are in the process of evaluating the technical feasibility and cost of this potential future expansion. Increasing the capacity of the pipeline can be achieved through the construction of a compressor station in Komotini, something that is also relevant to the Greek transmission operator DESFA and we’re in close contact with them as well to determine the development of the infrastructure in that area," she said.

The executive officer went on to add that furthermore, the construction of the compressor station in Komotini, along with the upcoming commercial operation of the FSRU near Alexandroupolis, will significantly contribute to realizing the full capacity potential of IGB.

"These projects exhibit excellent synergy with each other, enhancing the overall effectiveness of the infrastructure and ICGB is looking forward to the successful completion of both," added Georgieva.

Hydrogen transportation via IGB

The executive officer noted that the research and analysis phase for examining the feasibility of hydrogen transportation via IGB is currently underway.

"ICGB, as a newly established infrastructure operator, is actively seeking a reputable partner in the field to contribute valuable expertise and assistance to these studies. The assessments will involve evaluating technical requirements, safety considerations, and necessary infrastructure modifications needed for hydrogen transportation through the pipeline.

Providing an exact timeline for the initial study results is challenging due to the research's complexity and scope. However, ICGB is dedicated to expediting the studies and intends to share the preliminary findings as soon as they become available. I believe that as a sector we’re all looking towards new, innovative and most of all greener solutions to help our countries meet the set sustainability goals, and as a system operator ICGB will not be staying behind in these processes and efforts," she explained.

Finishing works

Teodora Georgieva recalled that as of last year, all significant works relevant to the gas transportation of IGB have been finalized, enabling to transport gas and fulfill the clients' nominations since October 1st, 2022.

"Since the launch date, we’ve been able to meet the needs of all clients of the interconnector and have ensured the safe and effective functioning of the pipeline.

However, there are still a few outstanding tasks that need to be completed. These include concluding remaining works, addressing specific requirements along the pipeline’s right of way, primarily in mountainous regions, and conducting a rework of an access road leading to one of the gas metering stations. As the contracting entity for the EPC contract, ICGB’s team is closely following the contractors’ finishing working on these remaining tasks to ensure the project is completed in all aspects in the manner set in our technical requirements," the executive officer added.

Utilized funds

"We underwent quite a few procedures and audits to have most of the funds for the project utilized and I’m pleased to say we’re almost done with utilizing everything under IGB’s funding plan. A significant part of the total budget for the project comes from EU funds and that’s why ICGB goes through extensive procedures to showcase excellence of work to be able to receive the project’s funding in tranches. We have €45 million under the Energy Program for Recovery (EEPR), €39 million that are allocated under the Operational Program "Innovation and Competitiveness" (OPIC 2014-2020), €109.9 million in the form of a loan from the European Investment Bank (EIB) and the remaining funds are secured by the project’s shareholders - BEH and IGI Poseidon," she said.

Georgieva noted that the relevant procedure has been initiated requesting the remaining funds and "I hope we’ll be able to share soon that we’ve successfully utilized everything."

"Just recently we utilized the last tranche under the Operational Programme "Innovation and Competitiveness" (OPIC), and back in early November 2022 we received approval for the final tranche of the long-term loan from the EIB following a successful audit. ICGB has already initiated the procedure for the reimbursement of eligible costs under the financing from EEPR and we expect to have approval for the final tranche of €22 million without remarks by the end of the summer of 2023," she concluded.

Follow the author on Twitter: @Lyaman_Zeyn