Weekly actual topics in Azerbaijan (June 12-16)
Bulgaria starts talks with SOCAR on Balkan gas hub
Bulgaria’s Bulgartransgaz company is starting talks with Azerbaijan’s state oil company SOCAR on the volume of gas supplies to Balkan hub, Investor.bg reported citing Bulgaria’s Deputy Energy Minister Zhecho Stankov.
The deputy minister said that the talks are at an early stage.
“The Bulgarian company is in talks on using the part of the free volumes of gas from Azerbaijan’s Shah Deniz 2. This is about 3 billion cubic meters from the second phase of development of the field,” added Stankov.
As much as 16 billion cubic meters of gas will be produced under the Shah Deniz 2 project. Six billion cubic meters of this volume will be delivered to Turkey, while the remaining 10 billion cubic meters will be supplied to Europe through the Trans Adriatic Pipeline (TAP).
Bulgaria will receive gas from the Caspian Sea region through the Interconnector Greece-Bulgaria (IGB).
“The project is on track. All land acquisition procedures in the country have been completed and the permit for the pipeline’s construction in Bulgaria is expected to be issued in the third quarter of 2017,” said Teodora Georgieva, executive officer at ICGB AD joint venture company.
The construction permit in Greece is expected to be issued in the fourth quarter of 2017.
“The project’s cost is estimated at around 240 million euros. As much as 45 million euros have been secured by the EU. Bulgaria can receive around 35 million euros before completing the procedure of using additional funds under the "Competitiveness and Innovation" program,” Georgieva added.
Stankov for his part, noted that IGB is an important, but not sufficient for creating Balkan gas hub.
“Its construction is important for the implementation of the Balkan gas hub project, but IGB and other interconnectors are not sufficient for this. The plan on expansion of Chiren gas storage facility is also important for this project,” said Stankov. “Currently, the second well is being drilled here for capacity expanding. The well will be put into operation soon.”
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 the Trans Adriatic Pipeline (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.
Gas supplies from Azerbaijan and US important for EU energy security – Polish energy ministry
Liquefied natural gas (LNG) supplies from the US to the Eastern Europe which were launched last week and gas supplies from Azerbaijan expected starting from 2020, are very important for European energy security, a source in the Bureau of Polish Energy Minister told Trend.
The source reminded that Poland has built LNG terminal in the port of Swinoujscie, which is a crucial component of Polish energy security strategy. According to the source, on 17 June 2016, the Swinoujscie LNG terminal received the first commercial delivery of LNG from Qatar. On 25 June 2016, the Arctic Princess LNG tanker delivered the first spot shipment of LNG from Norway, and on 8th of June 2017 was a historical moment as the first US originated natural gas came to Central Eastern Europe, a market traditionally perceived as Russian influence zone.
“Those dates mark the opening of a new stage in energy security for Poland and the Central Eastern Europe countries, and I believe that American LNG has a crucial role to play here,” the source said.
According to the Polish Ministry data, the terminal is designed for the reception and re-gasification of 5 billion cubic meters of natural gas per year, in the first stage with potential of expansion up to 10 billion cubic meters per year.
“It is the first such project in Central and Eastern Europe and the only one of such magnitude to be situated at the Baltic entry from the Danish straights,” the source in the ministry said.
Speaking about future gas supplies from Azerbaijan, the source noted that any new source of gas coming to Europe is an opportunity. He went on to add that the concept of the Southern Gas Corridor project supplied by Azerbaijan, Turkmenistan and potentially gas from Eastern Mediterranean region would contribute to security of supply and creation of liquid joint energy market of the EU.
“Therefore, Poland supports any initiative which will contribute to increased competition, our experience with abuses of dominant position by supplier is something which is not desired,” the source said.
He did not specify when the next tanker with the US LNG is expected to come to Poland and if such supplies will be regular, noting that this is a question for the CEO of Polish state-controlled oil and natural gas company PGNiG.
“I believe that politicians should not interfere in commercial activities, but of course United States as strategic ally of Poland and American companies are welcome to contribute to Polish energy security through direct supplies of LNG. If the offer of regular supplies will be commercially attractive it will surely be carefully assessed,” the source said.
Meanwhile, according to the source, Polish plan for diversification of sources and suppliers should not be perceived strictly in commercial terms.
“Current developments in external dimension of EU’s energy security show that the will to pursue the goals of Energy Union is decreasing. We observe mild approach in antitrust proceeding towards Gazprom, commitments proposed in Market Test procedure are far from satisfying,” he said.
The source went on to add that recent decision to create alternative legal regime for Nord Stream 2 gas pipeline from Russia is also worrisome.
“This clearly shows that whole Central Eastern European region needs an alternative. Not contractual, but physical supply from new partners, like Norway and US,” he said, adding that therefore Polish strategy can be narrowed down to the point in which the Government wants to create ability for the region to have that alternative.
Commenting on the possible resale of the US LNG coming to Poland, the source stressed that any interested party is welcome to use the import infrastructure created as Northern Gate consisting of LNG Terminal and interconnection with Norwegian Shelf.
Meanwhile he noted that, of course Polish neighbors are in most comfortable position, adding that Polish TSO is currently constructing complimentary to Northern Gate interconnection projects with Slovakia, Ukraine, Lithuania and Czech Republic.