The Greek ministry of energy announced the commencement of the realization of the IGB pipeline after a series of signatures taking place in Sofia, Bulgaria.
The pipeline is considered a landmark project for Greece and the Balkans, since it will transfer natural gas from the TAP pipeline to the Bulgarian market and other EU states.
The deals were signed during the summit for interconnectivity in Eastern Europe (CESEC) which took place in Sofia with the participation of energy minister, Temenouzka Petkova, EU commissioner, Miguel Canete and Greek minister, George Stathakis. They include the following:
– The TAP and IGB consortia signed a cooperation deal for transferring natural gas
– Bulgarian Energy Holding and EIB signed a deal for financing IGB and other projects
Security of supply
“The IGB pipeline is an integral part of our vision for a unified natural gas market in the Balkans”, said Mr. Stathakis and underlined “the great importance of the project for security of supply and maintaining competitive prices through differentiated sources and routes, thus leading to a more integrated energy market”.
As the minister said, “it is a part of the Southern Corridor and through its interconnection with TAP and DESFA’s network, it will provide to SE Europe access to Caspian gas and other sources, as well as LNG through the Greek terminals, such as the Alexandroupoli terminal”.
On his part, Mr. Canete saluted the commencement of IGB’s construction, which is one of the most important PCI projects in the EU and he called it a great success. The realization of the project, he added, is a vital step towards the integrated natural gas market, providing security of supply to the region of SE Europe.
On behalf of ICGB AD, the deals were signed by CEOs Teodora Georgieva and Constantine Karagiannakos. The CEOs also announced that the intergovernmental agreement between Bulgaria and Greece for arranging taxation issues is at its final stage.
During the ceremony, it was also announced that the project will be included as a chosen beneficiary for co-financing through the European structural fund of Bulgaria and the regulatory authorities of the two countries approved its regulatory framework.
A strategic project for SE Europe
DEPA CEO, Dimitris Tzortzis, who signed the shareholders’ statement as chairman of IGI Poseidon, said: “Today’s event is an important milestone for the shareholders of ICGB AD, for the further interconnection of Greece to Bulgaria and the European energy scene in general. Our commitment, along with the support of all parts, contributes to the timely realization of the IGB pipeline, a strategic project that forwards integration and energy security and will give access to differentiated sources of gas through a new route from 2020 onwards. The IGB pipeline is the umbilical cord between the two countries, through realizing the European strategy for interconnectivity and it is a tangible example of constructive cooperation between three companies and European countries”.
Georgieva: Progress has exceeded 80%
The realization of the IGB pipeline proceeds quickly, since necessary progress has surpassed 80%, as the CEO of the consortium revealed.
More specifically, ICGB CEO, Teodora Georgieva, said to the Azeri news agency Trend the following:
“”For the IGB project most of the significant preparatory job is already completed. There is a Final Investment Decision for the project taken in December 2015. The environmental impact assessment (EIA) is completed for the entire route. The Technical Design for the Bulgarian part of the route as well as the FEED for the Greek section have been finalized. There is a Construction Permit issued for Bulgaria and Installation act for Greece. Installation permit is expected immediately after the Exemption Decision.”
Georgieva went on to add that the financial model and the business plan were finally agreed between the shareholders and aligned with the European Commission as part of the exemption procedure and the approval of additional grant of 39 million euros.
“The financial structure is entirely settled and there negotiations which are ongoing for preparation of intergovernmental agreement between Bulgaria and Greece for stabilization of the taxation of the project for a period of 25 years. There is a sovereign guarantee secured by the Bulgarian state and on that basis a Memorandum of understanding is signed between Bulgarian Energy Holding and EIB for providing of loan for the realization of the project,” she noted.
The Greece-Bulgaria Interconnector is a pipeline with a length of 182km (31km of which are inside Greece) along with its support installations (metering stations, command center etc). Starting in Komitini, the pipeline will reach Stara Zagora connecting the gas networks of Greece and Bulgaria, while it will have a reverse flow capability.
The transfer of 3 bcm of gas annually is envisaged, with the possibility of raising it to 5 bcm through the addition of a compression station.
The ICGB AD consortium has undertaken the study, construction and management of the project. It is based in Bulgaria and was founded in January 5, 2011. Its shareholders are Bulgarian Energy Holding (BEH) (50%) and Greek IGI Poseidon (50%) where DEPA and Italian Edison participate equally.
It should be noted that both Greece and Bulgaria actively support the project, having characterized it as a project of national importance (Greece: Law 4001/201, article 176, Bulgaria: Council of ministers decree 452 of 07.06.2012). Furthermore, the EU has included the project in its Projects of Common Interest – PCI – list according to European regulation 347/2013. Also, the project is included in the priority project list of the Central and South Eastern Europe Gas Connectivity – CESEC.
Its co-financing has already been approved with 45 million Euros from the EU as part of the EEDR program, while additional forms of financing through structural funds are being examined.
The final investment decision was taken in December 10, 2015 and according to the current timetable, it will begin operating during the first trimester of 2020.