New ‘glitches’ in the IGB pipeline construction

New ‘glitches’ in the IGB pipeline construction

Attempts to disperse the clouds over the IGB (Interconnector Greece-Bulgaria) pipeline are being made in Bulgaria in the past 24 hours.

The process of implementing the project in Bulgaria “froze” abruptly on Monday, when the Competition Commission of the country did not allow, after similar complaints of irregularities, to proceed with the tender procedure for the selection of the contractors who will take over the pipes, necessary for the construction of the pipeline.

“The project will soon proceed as planned,” Vladislava Tsekova, a member of the project consortium, said, adding that “important state interests are at stake that will allow the completion of proceedings despite appeals”.

The Project

The gas Inter-connector Greece-Bulgaria is a pivotal infrastructure to connect the Greek and Bulgarian gas networks, with an Entry Point in the vicinity of the northern Greeek city of Komotini and an Exit Point in the vicinity of Stara Zagora, enhancing South-East Europe’s security of supply and allowing imports from various sources.

According to DEPA’s (DEPA is Greece’s public natural gas supply corporation, operating within the jurisdiction of the Ministry of Development) calculations it will be operational at the beginning of 2020.

The IGB Pipeline will have an initial transportation capacity of 3 Bcm/y from Greece to Bulgaria that could be upgraded up to 5Bcm/y at a later stage, in response to the market demand.

It will also be equipped in order to offer physical and/or commercial reverse flow.

The pipeline construction is being developed by the Bulgarian-based joint venture company ICGB AD. Some of its shareholders are the Bulgarian state-run company Bulgarian Energy Holding (BEH) (50%) and the Greek IGI Poseidon S.A., a 50-50% Joint Venture between DEPA S.A. and Edison S.p.A., incorporated under Greek law and based in Athens.

The delays…

The delay may hold back the progress of work in Bulgaria, meaning Sofia may be unable to stick to the planned schedule. The government aims at having started with the construction of the pipeline the latest by June, thus following a simultaneous course with the six-month EU Bulgarian presidency.

Moreover, the delay means that the country’s dependence on Russian Gazprom is also prolonged.

At the same time, Sofia has been committed that once the “Southern Corridor” becomes operational -that is in 2020 as the present planning reads- Bulgaria will buy 1 billion. cubic m. of natural gas from Azerbaijan, which corresponds to 1/3 of the country’s annual consumption, currently covered by Russian gas.

This prospect has been repeatedly and openly supported by US diplomacy, that seeks to curb Gazprom’s activity in SE Europe and strengthen alternative sources of supply to the markets of the Balkan countries.

Indeed, in 2015, when similar delays in the development of the project had taken place, the (political) mechanism had been mobilised, resulting in the meeting of the then Energy Minister Panos Skourtetis of Greece with his Bulgarian counterpart, Temenuzhka Petkova and the U.S. Special Envoy on Energy, Amos Hochstein.

In any case, for the moment, Gazprom remains the basic and greatest energy partner of the EU.

Gazprom’s exports to Europe reached record levels in 2017, recording an increase of 8.1% to 193.9 billion cubic metres…/IBNA