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Azerbaijan further strengthens its position in Europe - Greece-Bulgaria Interconnector being launched

1 October 2022 16:37 (UTC+04:00)
Azerbaijan further strengthens its position in Europe - Greece-Bulgaria Interconnector being launched

By Trend

Azerbaijan, as an important partner in energy supplies, is increasingly strengthening its position in Europe. Having first established itself as a reliable supplier of oil, at the end of 2020 Azerbaijan launched a project to transport natural gas to Europe - the Southern Gas Corridor. Even before the launch, many European countries expressed interest in connecting via interconnectors to this corridor, which ensures the diversification of routes and sources of energy supplies, thereby making a significant contribution to Europe's energy security. One such branch of the Southern Gas Corridor, the Greece-Bulgaria Interconnector (IGB) is already a reality. Today in Bulgaria there will be a ceremony of launching this gas infrastructure at such a critical moment for Europe, when the countries of the continent are facing big problems with energy supply.

As President of Azerbaijan Ilham Aliyev said today during a meeting with President of Bulgaria Rumen Radev in an expanded format, Azerbaijan, as a reliable supplier of gas, is a country of great importance for European countries. As the head of state noted, Azerbaijan also shows great interest in the European market, including the markets of Bulgaria and its neighboring countries.

The opening of the IGB gas interconnector will bring relations between Azerbaijan and Bulgaria to a new level. Azerbaijan has a strategic position in the Caspian, and Bulgaria in the Black Sea. Combining relevant potential will open up new opportunities for both countries.

About the project

IGB is a gas pipeline that will allow Bulgaria to receive Azerbaijani gas, in particular, produced in the Azerbaijani Shah Deniz-2 gas condensate field. IGB will be connected to TAP, which delivers gas from the Shah Deniz field to European markets. The groundbreaking ceremony for the IGB took place on 22 May 2019 in Bulgaria. The length of the gas pipeline is 182 kilometers.

At the first stage, the throughput capacity of the gas pipeline will be three billion cubic meters of gas per year. At the second stage, depending on the development of the market, the throughput capacity of the pipeline can be increased to 5 billion cubic meters of gas per year by adding a compressor station. About half of them - 1.57 billion cubic meters per year - have already been booked under long-term agreements up to 25 years. The remaining available capacity will be offered through auctions on the two leading platforms - PRISMA and RBG.

The total investment cost of the project is estimated at approximately 240 million euros (excluding VAT), of which 220 million euros are capital costs.

According to the contract signed in 2013, Bulgaria received 1 billion cubic meters of gas per year from IGB. However, the Bulgarian side has already stated that negotiations are underway to increase gas supplies from Azerbaijan to Bulgaria for at least the heating season - by another 200-300 million cubic meters. IGB will be able to cover most of Bulgaria's winter gas demand and provide a more competitive market.

This issue was discussed separately between the presidents of the two countries.

"During the conversation with the President today, we also discussed ways of increasing the volume of Azerbaijani gas to be exported to Bulgaria. Relevant instructions have been given. Energy security issues have always been important, but in today's circumstances, this importance has increased even more. We are well aware of this. Therefore, we are doing our best to increase gas production and supply our partners with natural gas. Azerbaijan has been exporting its crude oil to world and European markets as a reliable partner for many years. Azerbaijan, which now exports natural gas, will assert how itself as a reliable partner in this field as well," President Ilham Aliyev said.

As the head of state noted, the Greece-Bulgaria gas interconnector project is indeed of historical significance. President Ilham Aliyev expressed confidence that this interconnector will allow transporting Azerbaijani gas to Europe on a larger scale, and will also bring great benefits to energy security on the European continent.

Speaking of IGB scope: The Western Balkans represent a new opportunity for interconnector expansion. After increasing the capacity to five billion cubic meters per year, IGB will also be able to deliver to Moldova and Ukraine. In addition, the launch of the interconnector will also allow Romania to import gas from Azerbaijan through the Vertical Corridor.

The expansion of the geography of Azerbaijani gas exports does not end there, as more and more countries turn to Azerbaijan to purchase gas, or to increase the volumes already supplied. There is already a specific agreement between the EU and Azerbaijan to double the capacity of the Southern Gas Corridor by 2027. Therefore, it can be stated with confidence that Azerbaijan offers the most realistic opportunity for Europe's energy supply.

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