Interconnector Greece-Bulgaria in the Spotlight
The post-election political landscape in Greece saw the Syriza party assume office and put into motion plans to move forward with a main natural gas project between Greece and Bulgaria. This project has been in limbo due to continuous political instability and successive general elections in both countries since 2012.
The Interconnector Greece-Bulgaria (IGB) constitutes a cornerstone in gas cooperation between Athens and Sofia in relation to the Southern Gas Corridor project and in particular, the Trans-Adriatic Pipeline (TAP). Moreover, the recent initiative by the Greece's DEPA regarding a proposed energy gas axis streaming from the Aegean Sea towards Central Europe, named the "Central Corridor", is also dependent on the conclusion of IGB. The reason for this is for there to be a set of interconnectors reaching Hungary that would in turn be able to accommodate an even grander plan - the Aegean-Baltic Corridor - which would reach Poland.
Bulgaria is in the midst of disappointing energy security developments and its envisaged role as a preferred route for the transport of substantial amounts of gas into the EU. The cancellation of both Nabucco and South Stream along with non-discoveries of significant amounts of domestic gas, continues to place the country in a challenging position with respect to energy security and has increased the desire to play a role in the shaping of things regarding the axis between Eurasian producers and Western consumers. For the moment, Sofia has received news from the EU Commission that it is eligible to receive €250 million in funding in order to proceed with connecting Greece, Turkey and Romania via interconnectors and developing its underground storage facilities.
IGB is crucial if Bulgaria is to meet its aim of 1 bcm of gas deliveries per annum from Azeri SOCAR post 2019 and decrease its almost 100% dependency on Gazprom. Further, Greek plans of creating an LNG installation in Northern Greece to supply the Balkans would also need IGB as the main transfer conduit.
The development of IGB process has been slow process due to the lack of interest by potential traders in using the potential gas transportation capacity. This is primarily the result of the aforementioned plans still being a theoretical level, whilst the likely introduction of the Turk Stream changes the discourse once more, regarding Southeastern European gas supplies.
The victory of the Syriza party in Greece also puts forward the option of a Turk Stream spur into Greece and then Italy via the Interconnector Greece-Italy (ITGI), in which the IGI Poseidon consortium has a 50% stake. Thus, matters are still in flux, while there is increasing probability of early general elections in Bulgaria.
The new Greek government will need several months before it is able to look into the energy affairs of the country. It is pressed into proceeding with a new round of negotiations with the Troika of lenders by ECB-EU-IMF, while the Syriza party assumes governmental status for the first time historically and it will definitely need a grace period to caliber its capacities and test its tactics on a wide range of sensitive domestic agenda issues.
Therefore the probability that the IGB route will be delayed once more is increasing, without taking into account that other variables, such as Gazprom’s tactics, Turkey’s ambitions and potential developments from SOCAR, may further complicate the situation.