Bulgaria Strives for the Establishment of a New Gas Corridor
Bulgaria's energy policy has been mostly commented on with regards to its Black Sea endeavours, namely the South Steam pipeline project and its own research and exploration investments. As of late, the East Med option is gaining ground in the country, albeit as a supplementary energy corridor that could potentially enchase energy security options for both the country and the region.
More specifically, in a recent visit to Israel by the Bulgarian Premier Plamen Oresharski and through his talks with his counterpart, Benjamin Netanyahu, in Tel Aviv, it was relayed that Sofia is eyeing a potential inflow of Israeli gas through the Greek transmission system. Although it could take at least 5 years before a definite assessment of the quantities of gas involved and the export route to be established, it is of importance that Bulgaria is trying to place itself as a preferred gas corridor to the rest of the EU, a trial that proved to be unsuccessful with the Nabucco project, whilst it faces significant legal hurdles with South Stream.
The Bulgarian Prime Minister in a recent interview in Darik Radio Sofia, expressed the view that the Interconnector Greece-Bulgaria (IGB) would start to be constructed in late 2014, and is the first key step into unlocking a corridor from the Eastern Mediterranean, coupled with the intentions of Greece to boost also its LNG incoming shipments via an upgrade of its infrastructure in that sector. Thus, in a wider scale should an export corridor from the Israeli and the Cypriot exclusive economic zones be achieved, it will have two options of getting the commodity into the larger EU markets. One is the proposal already made by the Greek government since mid-2013 and that is the route by sea towards the Adriatic coast of Southern Italy or via the Greek gas network to Bulgaria and though the establishment of interconnectors to Romania, Hungary and Austria, as well as the rest of the central European states, reaching into the Baltics.
The Bulgarian proposal at first glance can be said to offer a more economical and viable solution. The IGB will have an initial flow of 3 bcm per annum that could be increased to 5 bcm, a quantity not sufficient for mass transfer of Mediterranean gas. Only if Greek LNG projects are set to move then a second interconnector with greater capacity could be discussed as to make the proposed corridor a likely item for selection.
IGB is scheduled to have reverse flow capabilities and presently the existing pipeline route that brings Russian gas to Greece from Bulgaria is also being upgraded to achieve reverse flow. That alone will further boost interexchange of gas flow. Concurrently, the LNG Revythousa station in Greece is to be up scaled via the construction of a third depot that will increase storage capacity from 130,000 cubic meters currently to 225,000.
Furthermore the gasification capacity of the terminal will have a 40% increase in flow capacity and ships carrying LNG up to 260,000 cubic meters could dock, therefore bringing the country closer to distant producer markets and providing better variety in terms of suppliers selection. To all the above, the Trans-Adriatic Pipeline (TAP) should be noted with a 10 bcm per year directed towards the Greek, Albanian and Italian markets, out of which Bulgaria is planning to acquire at least 1 bcm per year and an additional 2 bcm via a new interconnector with Turkey, which will have Azeri-originated gas. All of these are also planned to be paired by a floating storage facility in the Greek Kavala region or in Alexandroupolis and already the Bulgarian government has expressed unofficial interest to participate as a shareholder through its state gas company.
Overall, Bulgaria is pushing forward its role, that of a peripheral energy hub stretching from the Black sea to the Eastern Mediterranean, up to the Adriatic and the Danube basin. These initiatives also speed up the process of re-alignment between competing interests in the regional gas trade and eventually this will lead to the formation of new gas blocks between producers, transit countries and costumers. It can be said that natural gas diplomacy in South East Europe is really heating up with Bulgaria and Greece for the moment stirring up most of the initiatives, while Turkey and Croatia are weighting opportunities involved and may soon make their own moves.