site.btaPrime Minister Urges European Commission to Take Part in All Meetings about Future Gas Hub

Prime Minister Urges European Commission to Take Part in All Meetings about Future Gas Hub

Varna, on the Black Sea, September 5 (BTA) - Prime Minister Boyko Borissov said on Monday that the European Commission should take part in all meetings with potential partners and investors relevant to the future Balkan European Gas Hub in Bulgaria. Borissov said the European Commission's positive assessment of the project can serve as a basis for negotiations with individual countries, including Russia. "But the talks should be trilateral, involving a Commission representative, in order to make sure that the project will not be stopped," he added, speaking at an international investors' roundtable near Varna. He invited the attending investors to take part in the negotiations for the operation of the planned Gas Hub.

A new subsidiary will be established at Bulgartransgaz to take charge of the construction of the Balkan European Gas Hub, the company's CEO Georgi Gegov said. According to him, strategic investors can acquire up to 50 per cent of the shares of the new entity.

The project will raise natural gas transit via Bulgaria to 43 billion cubic metres annually, Gegov predicted. The costs of building the new routes will be about 1.5 billion euro; the exact amount will become known after feasibility studies in 2017 and 2018. Depending on the interest of the investors, the project may involve building two gas pipelines instead of one, he noted.

Gegov listed seven major reasons to choose Bulgaria as the perfect place for a gas hub. These include the country's geographical location, its status as a reliable partner with a well-developed gas transmission network and compressor stations, and its effort to diversify its gas sources by working with neighbouring countries. Europe currently has 17 cross-border interconnection points for trading in natural gas, most of them for virtual trading, Gegov said.

Klaus-Dieter Borchardt, Director for the Internal Energy Market at the European Commission's Directorate General for Energy, said the idea about the Balkan European Gas Hub in Bulgaria is not only to bring natural gas to Southeastern Europe, but also to develop the regional economy, which means that the project has economic and social dimensions. Borchardt said the European Commission believes that a secure supply of natural gas to all of Southeastern Europe will create new business opportunities. "It is in our best interests to make the hub larger and go beyond the boundaries of the region," he argued.

According to Borchardt, the Balkan European Gas Hub in Bulgaria will bring obvious benefits, such as growing security of gas supplies to Bulgaria and its neighbours, lower gas prices for households and industrial users, and better access to clean natural gas. This will spur economic growth and the creation of jobs and new opportunities.

The official predicted that by 2030 Europe will consume 380 billion cubic metres of natural gas annually.

Diversification is essential and there are three aspects to it: diversification of sources, transmission, and suppliers, Borchardt went on to say. "Fair competition is also very important, because the southeastern markets are still dominated by one large supplier operating under long-term agreements, which in some cases will not expire until after 2030," he said.

Energy Minister Temenouzhka Petkova said the participation of many international corporations in the meeting filled her with hope about the project. Petkova said that, regarding the financing scheme, there are still things which remain to be specified, but all matters will be sorted out during the negotiations with potential investors. "The prerequisites are there - we have physical connectivity with our neighbours, which provides opportunities for competitive prices and expansion," she said.

Deputy Prime Minister for EU Funds and Economic Policy Tomislav Donchev said the Balkan European Gas Hub project is entering its technical stage in terms of infrastructure and concurrent measures. It requires all-around organization, Donchev noted. "In addition to infrastructure, the big players in the sector whom we want to have here buying and selling gas will certainly want a top-class regulator offering European solutions, and they will want predictability and strong institutions," he stated.

Donchev further commented that it is up to Russia to export natural gas to Turkey or not. "We do not care about other projects. We have our own project and we are inviting all interested parties, Russia included, to share in it," he said.

The TASS news agency quoted Russian Energy Minister Alexander Novak as saying that the construction of the first line of the Turkish Stream gas pipeline project should end by December 2019. After Russia gave up the South Stream project due to the requirements set by the European Commission, it was decided to build Turkish Stream instead. Later on, the negotiations for Turkish Stream were interrupted, partly because of the crisis in Moscow's relations with Ankara.