In November 2018, after the completion of the construction of Russia’s maritime part of the first branch of the “Turkish Stream” pipeline, the Bulgarian government announced the start of construction works on the “Balkan gas hub”. On November 30th, the Bulgarian Parliament voted to include the “Balkan gas hub” project in a new version of “Bulgaria’s Energy Strategy 2020”.
The project foresees an increase in the capacity of the Bulgarian gas transportation system (GTS) and the use of a part of the Trans-Balkan gas pipeline to provide transit of Russian gas from the “Turkish Stream” and gas from the Southern Gas Corridor from Azerbaijan to the countries of the Balkan region and Italy.
According to Temenuzhka Petkova, Bulgaria’s Minister of Energy, this will allow the country to address the loss of revenue from the transit of Russian gas in the event that Russia ceases to use the Ukrainian route. The minister said that Bulgaria is expecting Moscow to agree to direct the second branch of the “Turkish Stream” through Bulgaria to Serbia, Hungary, Slovakia and Austria – a route that will in fact duplicate the “South Stream”, the Russian energy project, discontinued in 2014.
It should be noted that in the energy balance of Bulgaria (natural gas sector), Russian gas amounts to 98%. The Russian Federation delivered 3.14 billion cubic meters of gas to Bulgaria through the territory of Ukraine in 2017. At present, Bulgaria has no alternative sources of gas supply, its own capacity for storage of gas reserves is insignificant, and the government of the country has not provided reverse pumping of gas by gas interconnects from Greece and Turkey. The President R.Radev, speaking on December 3rd at the UN climate conference in Katowice, said that “in the medium term, Russian gas will remain the main source of energy security for Bulgaria.” According to Ivan Ivanov, chairman of the Bulgarian Energy and Water Regulatory Commission, the contract between Bulgartransgaz and Gazprom on transit of 16-17 billion cubic meters of gas per year to Turkey and Greece, which is in force until 2030, provides annual revenues of the Bulgarian gas transportation company at the level of 107 million USD, which is 67% of all revenues of the Bulgarian GTS operator.
So, Sofia’s initiative to create “Balkan gas hub” is an attempt to compensate for the possible loss of revenue from the transportation of Russian gas through the territory of Bulgaria in the event of the termination of its transit through Ukrainian route.
At the same time, the Parliament of Bulgaria strives to adapt the gas contract with Russia to current realities. Thus, the new version of the energy strategy of Bulgaria defines the infrastructure and course of action which is to be introduced by “Bulgartransgaz” to ensure the transportation of gas through the territory of Bulgaria from the border with Turkey to the border with Serbia. The main task of “Bulgartransgaz” in this context is the construction of two gas compressor stations and a new gas pipeline extending for 474 kilometers from the gas distribution station “Provadia” near Varna to the border with Serbia. The project budget is currently estimated at 1.63 billion USD. In addition, the new version of the energy strategy of Bulgaria foresees that the works on the creation of a gas trading platform in Bulgaria and the creation of “Balkan gas hub” company operator will have started by the end of 2018.
In the context of ensuring diversification of gas supply routes, the document provides Bulgaria with a 20% share in the project for the construction of a new LNG terminal in the Greek port of Alexandroupolis. In addition, Bulgaria has already agreed with Azerbaijan on supplies of Azerbaijani gas amounting to 1 billion cubic meters per year from “Greece-Bulgaria” interconnections starting from 2020. The Energy Ministry of Bulgaria claims that gas interconnects “Bulgaria-Turkey” and “Bulgaria-Serbia” will have been built by the end of 2020.
According to Lulin Radulov, the expert of the Bulgarian NGO “The Black Sea Energy Research Center”, the implementation of the “Balkan gas hub” concept, can provide Bulgaria with the potential to become an influential regional natural gas trading platform and an important gas corridor between Asia, the Middle East, the Balkans and Europe, and thus ensure the intake of gas to the region not only from Russia, but also from the United States, Qatar, Algeria, Egypt, Azerbaijan and Romania.
Images:
Compressor Station PROVADIA from www.bulgartransgaz.bg
Balkan gas hub from www.energypost.eu
