Bulgaria announces losses from delayed IGB construction

Bulgaria continues to be depleted of revenue because of persistent delays in completing the gas interconnector with Greece (Gas Interconnector Greece - Bulgaria, IGB), Bulgarian Energy Minister Alexander Nikolov said in parliament on January 6, Report informs referring to Euractiv.

A Greek company is building the IGB interconnector (also known as Stara Zagora-Komotini or ICGB).

“Because of the delays, Bulgaria loses 750,000 euros a day, the lost benefits for Sofia for the last year amounting to over 250 million euros,” Nikolov said during a parliamentary hearing.

After many delays, the construction of the 182 km-long pipeline started in May 2019 and according to the contract should have been completed by the end of 2021. Bulgaria will continue to lose even more revenue because of the never-ending construction, Nikolov warned. Bulgaria has a contract with Azerbaijan to import one billion cubic meters of gas per year (bcm/y), which roughly amounts to one-third of its consumption.

The interconnector is crucial for Bulgaria because its completion would break the monopoly of Russian gas on the Bulgarian market for the first time. The IGB will link to the Trans Adriatic Pipeline (TAP), bringing Azerbaijani gas from Greece to Italy. Currently, the Azerbaijani gas is much cheaper than the gas Bulgaria imports from Russia, and the failure to bring Azeri gas amounts to lost revenue for Sofia.

At the end of last year, Baku expressed readiness to export larger quantities of gas to Bulgaria than the agreed supplies of 1 bcm/y under the current contract. However, Bulgaria cannot avail itself of this chance because the pipeline is not completed. Small amounts of Azerbaijani gas have been imported via existing links, the capacity of which is limited.

On December 20 last year, the prime ministers of Bulgaria and Greece, Kiril Petkov and Kyriakos Mitsotakis, issued a joint statement that ICBG would be completed in a matter of months. They noted that the gas interconnector is vital for both sides. Mitsotakis said that Athens and Sofia would start “a new stage” of their cooperation on this occasion.

The IGB is intended for export of natural gas to Bulgaria produced within the second phase of the development of the Shah Deniz gas condensate field in the Azerbaijani sector of the Caspian Sea.

State-owned Bulgargaz EAD signed a contract with the Shah Deniz consortium for the purchase of 1 billion cubic meters of gas from the Shah Deniz 2 field. Azerbaijani gas will cover 25-30% of Bulgaria’s natural gas needs. The length of the interconnector is 182 km, of which 150 km run through the territory of Bulgaria. The annual capacity of the interconnector is provided in the amount of 3-5 billion cubic meters.