New project company will build the gas hub “Balkan”

New project company, a subsidiary of the state “Bulgartransgas” take on the construction of the gas hub “Balkan”. Up to 50% of its capital is given to a strategic investor. The investment is estimated at around 1.5 billion. Euros and construction is expected to begin in 2020. Five countries have already expressed interest to supply the future gazorapredelitelen center among them is Russia. This was announced by Prime Minister Boyko Borisov in Varna during the investment round table for the new government project.

“We will not allow Bulgaria to be surrounded and will use its veto power,” Borisov said on the occasion of the comments of the head of “Gazprom” Alexey Miller, there will be no tube “Turkish Stream” to Bulgaria and Russian gas supplies to Europe They will become in Greece.

The European Union is indebted to our country in terms of gas supplies for Bulgaria has been a loyal and disciplined and to fulfill all EU requirements, said Borisov. He urged the European Commission to ensure strict enforcement of EU rules with regard to Greece if Russia decided to import gas to Europe through the “Turkish Stream”. The plans for this pipeline are part of the gas goes to the Turkish market and another for Europe in the hub near the Turkish-Greek border.

The gas hub “Balkan” will provide the technical infrastructure opportunity for competitive clash of different vendors, said Deputy Prime Minister for economic policy and EU funds Tomislav Donchev at the opening of the forum in Varna. It includes about 35 companies, including global giants and regional players with developed gas projects in Bulgaria and the Balkan region. “Gazprom” does not send representatives.

The requested interest

After the European Commission gave permission for the construction of the gas center “Balkan” can now begin negotiations to collect maximum volume of gas to it. Forthcoming tripartite meetings between Brussels, Sofia and anyone who is willing to participate in the hub, said Borisov. In his words to the gas hub have indicated interest in Azerbaijan, Turkmenistan, Iran, the USA and Russia. Negotiations with Moscow over gas hub have not been conducted because it was only a conceptual design and without the approval of the European Commission, said the Prime Minister.

At the same time a few days ago, Russian President Vladimir Putin announced that he wants “reinforced concrete guarantees” from Bulgaria and the EU if Russia decides to make a new pipe to our Black Sea coast. Sources of gas supply of the hub are few – Russian gas through a new pipeline or in existing Balkan pipeline (in Ukraine and Romania), the Caspian region, liquefied gas terminals Greece and Turkey as well as from its own production, said Tomislav Donchev.

The project company

The creation of a new company, a subsidiary of “Bulgartransgas” EAD, which take over the construction of the European gas hub “Balkan”, said the CEO of state-owned George Gegov. In his words, strategic investors can receive up to 50 percent of the shares in the new company. The creation of a hub suggesting opportunities for new gas flows across the country, the routes can be north or south of the Balkan Mountains, said Gegov. According to him, this will enable to increase the transportation of gas through the country to 43 bn. Cu. M per year.

The necessary investments for the construction of the tracks will be around 1.5 bln. Euro, the exact amount will become clear after the completion of feasibility studies, which are scheduled for 2017-2018, the Gegov said. According to him, depending on investor interest can select an option to build two instead of one line. Seven are serious reasons why Bulgaria is the ideal place for a gas hub. These include the geographical situation of the country, that we are a reliable partner with a well-developed pipeline network and compressor stations available, work on diversification of sources with neighboring countries, said Gegov.

In recent years, Bulgaria has made investments in the modernization of the transmission network and its capacity increased by 15 bn. Cu. Meters per year, said Borisov.

In considering the potential of the project should not think only of Bulgaria, which is a small market, but given the potential of the entire region with neighboring countries, whose total GDP is 1.2 trillion euros, the population reached 126 million. People and gas consumption exceeds 70 bn. cu. m per year, said Donchev.

Pluses and minuses

The gas hub “Balkan” aims to promote connectivity of all sources of gas in the region of Southeast Europe, said Deputy Prime Minister. According to him, the project is not competitive with other gas hubs that exist or are being developed and are planning now. Currently in Europe there are 17 points for trade in natural gas, most of which are virtual said George Gegov. He recalled that in the Balkans there is no regional hub, and building such is compatible with all future projects, including the Black Sea pipelines.

The project to build a gas center “Balkan” is a continuation of the initiative of Bulgaria and the European Commission to establish a working group for interconnection connectivity in the region.

Currently, industrial production and urbanization privilege the use of natural gas, especially considering that this is the source of energy that respects the environment most, said Donchev.

He cited statistics from recent years show that electrical energy can not compete with gas as price levels. In 2015, world production of natural gas has achieved record while demand grew by over 1.4% against the 2014 price of natural gas is a good prerequisite for increasing consumption in industry, predicted Deputy Prime Minister. Southeast Europe needs not only of intersystem gas connection, but also from the economic upturn. Security of supply and price of energy resources, including gas, are the primary factor in the competitiveness of the economy, said Donchev. We have taken the challenge to lay the foundations of an open integrated gas market, he added. If the country does not implement the project for the gas hub “Balkan” and remain only with the gas connection with Greece will again remain dependent warned Borisov. According to him, the risk is that our country can become a major transporter of gas in the region of import.