Bulgargaz: New talks needed on gas supplies due to IGB delay

The Bulgarian state-owned company Bulgargaz said that after July 1, 2022, the company will have to conduct new negotiations on the continuation of gas supplies to an alternative route from Azerbaijan in the event of a delay in the commissioning of a gas interconnector with Greece-Bulgaria (IGB), Report informs referring to the company’s statement sent to the Bulgarian media.

Bulgargaz stressed that the company has no information about when the IGB will be ready, but the terms of the contract with Azerbaijan on an interim solution in its absence will expire on June 30, 2022.

It was previously expected that the construction of the IGB interconnector (Interconnector Greece - Bulgaria) would be completed by the end of 2021, and commissioning would take place by the end of June. However, in recent days, Bulgarian Energy Minister Alexander Nikolov has repeatedly acknowledged that construction is still being delayed and ways are being sought to speed up work, including meetings with the Greek side. It was also proposed to impose sanctions for the delay against the Greek company J&P AVAX, which is the contractor under the contract for the design, supply and construction of the gas pipeline.

Bulgaria currently receives about 350 million cubic meters of gas per year from Azerbaijan via an alternative route, although a full-fledged contract for gas from the Shah Deniz field has been agreed in the amount of 1 billion cubic meters per year.

IGB will receive gas from the Trans Adriatic Pipeline (TAP), which is designed to supply Azerbaijani gas from the Shah Deniz 2 field to European markets.

The consortium for the development of the Azerbaijani gas condensate field Shah Deniz signed contracts with buyers of Azerbaijani gas in Europe in 2013. Bulgargaz was among the signatories. Contracts for the sale of gas are designed for 25 years.

Contracts for the purchase of gas from the second stage of Shah Deniz development were signed with Shell, Bulgar gas, DEPA, Gas Natural Fenosa, EON, Gaz de France, Hera, Enel, Axpo.

The terms of the agreements are not yet known to the general public.