New urgent talks needed with Azerbaijan if IGB is delayed – BulgargazJANUARY 19, 2022
If the construction of the gas interconnector between Greece and Bulgaria (IGB) is delayed even further, Bulgargaz will have to hold new negotiations for an alternative route for gas from Azerbaijan, Trend reports citing a statement from Bulgargaz.
Currently, Azerbaijani gas is delivered to Bulgaria via an alternative route due to the delays in IGB’s construction. Bulgaria receives about 350 million cubic meters of gas per year from Azerbaijan, although the supply of 1 billion cubic meters has been agreed. The terms of the agreement with Azerbaijan will expire on June 30, 2022.
Bulgargaz notes that negotiations were held with the Azerbaijani supplier to change the route after a "long in-depth professional analysis and assessment" carried out jointly with the Bulgarian Energy Holding (BEH) and the Ministry of Energy. The decision to change was not taken solely by the management of the gas company.
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.