Gas Projects in Southeast Europe Gather Pace
Several natural gas infrastructure projects in Southeastern European countries are moving ahead and slowly but steadily building up the regional market.
More analytically, it was recently announced that in June 2014 an interconnector gas pipeline between Bulgaria and Romania will be finalized, overcoming several technical difficulties that had delayed the plan. It will take further time though for commercial operations to begin since Romania needs to construct a compressor station. If negotiations, which are currently underway are successful, it should be done by mid-2015.
Bulgarian authorities are worried of a repetition of a Ukrainian gas crisis such as the one of 2009 or even worse, since they have already publicly decreed that the country is insufficiently prepared to deal with such a development. Meanwhile, an interconnector with Turkey was also recently agreed upon and should be ready by end of 2016. With Greece the Interconnector Greece-Bulgaria (IGB), crucial for its 1 bcm of gas from Shah Deniz that Sofia has agreed upon with Azerbaijan, will commence construction works later this year and could be operational after 18 months.
The role of that pipeline is instrumental for the two countries based on plans to establish an LNG station in Northern Greece that could transfer gas from Qatar, which Bulgaria sought. The Bulgarian Energy Ministry recently assessed that as far as LNG is concerned, the only viable source is Qatar, and that import could only be facilitated through Greece as DEPA aims to build the Aegean LNG terminal in the Kavala region, a $400 million project seeking international funding. This plan has already been assessed positively by the European Commission and has been codified as a Project of Common Interest (PCI), signalling potential EU financial backing and importance for the European energy security.
Furthermore, the Trans-Adriatic Pipeline (TAP) has moved a step forward after getting the green light from the regulatory authorities of Italy, Greece and Albania. After concluding the market test for the initial capacity booking of the pipeline in which twenty energy companies from around the world participated, it now moves on to allocate its capacity which is 10 bcm per year. Prospective partners should submit booking offers for the capacities they want to allocate, either those flowing westwards to Italy or eastwards to Turkey. Normally the process would take several months to be completed and represents a crucial stage for the TAP viability.
The first preliminary meeting between interested partners and the TAP consortium will take place on the 10th of April in Switzerland where data will be provided to them. Afterwards, from the 5th of May up to the 14th, submission of the booking offers will take place. By the 2nd of June the confirmation of the offers will be announced and by the 5th of September exact amounts allocated should have been agreed upon for every entrance and exit point in the pipeline and the various price tags attached. It is estimated that by the 1st of October the Gas Transportation Agreement (GTA) will have been signed.
The first gas volumes to Italy should flow by mid-2019 and if there is relevant interest then the process of doubling the capacity of the pipeline will commence. From the Greek side, DEPA has stated its interest in procuring annually 1 bcm and looks like it is going to be one of the main partners of the pipeline.
The current shareholders in TAP AG are BP (20%), SOCAR (20%), Statoil (20%), Fluxys (16%), Total (10%), E.ON (9%) and Axpo (5%).