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    J&P Avax To Build Greece-Bulgaria Gas Interconnector

Summary

The EU-backed link will help reduce Bulgaria's deep dependence on Russian supplies.

by: Tim Gosling

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J&P Avax To Build Greece-Bulgaria Gas Interconnector

ICBG, the project company behind the Greece-Bulgaria gas interconnector (IGB), announced May 14 the winner of a tender to build the project.

J&P Avax, Greece’s second largest construction group, offered the best technical and financial conditions, ICBG said in a statement. The final value of the contract will be €144.8mn.

Bulgaria plans to launch construction of the 182km link this month. The contract should be executed within 18 months of the start of construction, said ICBG, which is a joint venture of state-owned Bulgarian Energy Holding (BEH) and IGI Poseidon. The latter is jointly held by Greek public gas corporation Depa and Italian energy group Edison.

The 3bn m3/yr IGB will connect the (Greek) Desfa and Bulgargaz systems with the Trans-Adriatic Pipeline (TAP) now under construction, and enable alternative sources of gas (primarily LNG and Azeri piped gas) to enter Bulgaria, which is currently 98%-dependent on Russian monopoly piped gas exporter Gazprom. An expansion to 5bn m3/yr is possible depending on demand.

IGB has been on the EU's list of Projects of Common Interest for several years. The project is strongly backed by the European Commission, which seeks to improve the integration of south eastern Europe’s gas markets. The region has few links to major EU networks and is dominated by Russian supplies.

The EU approved funding for IGB in November. The €240mn project will be financed by a direct equity contribution of €46mn from ICGB shareholders; €45mn from the EC-managed European Energy Programme for Recovery (EEPR); a €110mn loan from the EU's European Investment Bank to BEH (subsequently passed-on to ICGB); and a direct €39mn subsidy from the Bulgarian state budget via its 2014-20 'innovation and competitiveness' programme.