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    Socar Eyes Bulgarian Midstream


Azeri state Socar is eying a role in Bulgarian midstream projects, including gas storage, but success is not assured.

by: Ilham Shaban

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Natural Gas & LNG News, Europe, TSO, Infrastructure, Pipelines, News By Country, Albania, Azerbaijan, Bulgaria

Socar Eyes Bulgarian Midstream

Azerbaijan’s state Socar has started a new round of negotiations to participate in Bulgarian midstream projects, including gas storage and pipelines, but its success is not assured.

“The negotiations have been focused on increasing the capacity of Bulgaria’s Chiren underground gas storage (UGS) from the current 550mn m3 to about 1bn m3. Socar also plans to boost the UGS’s withdrawal capacity by 25% to 5mn m3/d,” Socar spokesman Ibharim Ahmadov told NGW April 5. 

Socar previously announced April 3 that it has started new round of negotiations with Bulgaria but didn’t elaborate on the details of discussions. The source said that currently the sides are discussing the costs of projects. “Socar also plans to modernise Bulgarian gas network and help the country to privatize the grid,” said Ahmadov. The company has 40 years' experience of running underground gas storage, including its Karabakh and Kalmaz facilities in Azerbaijan which it developed. 

Bulgaria in 2013 signed a 1bn m³/yr gas purchase contract with Azerbaijan’s BP-led Shah Deniz consortium, which will take effect when supplies to Europe commence around 2020. Socar adds that Bulgaria would like to buy additional gas supplies direct from Socar.

However, Socar has had mixed results when it comes to investing in EU gas infrastructure. It is a one-third partner in a Maltese small-scale LNG import terminal and adjacent power plant. But it was barred from acquiring a 66% stake in the Greek gas transmission operator and LNG terminal operator Desfa in 2013 by the European Commission (EC), on the grounds it would give Socar as a producer too much influence in the region's gas market. It subsequently decided against taking a minority stake instead, and the 66% stake is still being auctioned off by Greece's privatisation agency five years later.

The EC has tended to accept ownership by Russian producer and exporter Gazprom of gas storage and transmission infrastructure in Germany and other EU states, but only on the basis that such facilities are highly regulated and accessible to all gas shippers.