site.btaUnless Natgas Interconnector with Greece Is Operational by Mid-2022, Bulgaria May Incur Substantial Penalties from Azeri Supplier

January 16 (BTA) - To date, Bulgargaz has not been informed by the project company building the natural gas interconnector Greece-Bulgaria (ICGB) of the exact date on which the interconnector will be completed, Bulgaria's public supplier of natural gas said in a press release on Sunday. The provisional understandings on supply with Azerbaijan expire on June 30, 2022, and unless the ICGB pipeline is commissioned by that date, the Azeri company may trigger a penalty clause in the agreement and draw down on a substantial guarantee furnished by Bulgargaz and the Bulgarian Energy Holding (BEH) (in the amount of tens of millions of dollars monthly).

Considering that ICGB was inoperable by December 31, 2020 when gas supplies from Azerbaijan to Bulgaria were agreed to start, Bulgargaz, BEH and the Energy Ministry reached agreement with the Azeri supplier on a provisional rerouting of its deliveries over the Greek gas transmission network DESFA until September 30, 2021, the press release recalled.

After yet another postponement of the ICGB commissioning, Bulgargaz was yet again compelled to approach the Azeri side for an agreement to extend the provisional understandings until June 30, 2022.

The understandings made it possible for Bulgargaz and the Bulgarian market to receive natural gas from Azerbaijan from the very first day agreed with the supplier, and Bulgaria became one of the first countries in Europe to benefit from Azeri gas supplies, the press release says.

Bulgargaz expects the interconnector to be commissioned by July 1, 2022 at the latest without further delay so as to be able to receive the full amount of gas from Azerbaijan.

Because of the delayed commissioning of the interconnector, in January-September 2021 Bulgargaz was compelled to import just 250 million cu m of the annual quantity of 1 billion cu m of natural gas contracted with Azerbaijan. The Azeri gas is currently much cheaper than the Russian gas, whose price is 70 per cent pegged to the prices on the European gas exchanges.

The 182-km ICGB pipeline runs from Komotini (Northeastern Greece) via Kurdjali, Haskovo and Dimitrovgrad to Stara Zagora (Southeastern Bulgaria). The project is of strategic significance for achieving diversification of gas sources and routes to Bulgaria and the region as a whole. LG
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