Bulgarian Energy Holding talks with Azerbaijan to buy natural gas

Bulgarian Energy Holding (EAD) is in talks with the Azerbaijani side to deliver the total amount of Azerbaijani natural gas to this country.

EAD expects that the Interconnector Greece-Bulgaria will be put into commercial operation in the period, stated by the project company, until 01.07.2022, which will allow the full volume of Azeri gas supplies to reach Bulgaria, under the conditions of the Agreement.

Due to the ongoing construction of the interconnector, the delivery point Komotini was not put into commercial operation as of the commencement date for supplies under the Agreement – 31.12.2020. and is expected to enter commercial operation in the middle of 2022.

An agreement has been reached on the temporary use of another delivery point on the territory of Greece and transportation of natural gas to Bulgaria through an alternative route for the period from 31.12.2020 to 30.09.2021. Analogous negotiations are currently being conducted for reaching an agreement concerning supplies for the period 1.10.2021-30.06.2022.

The possible volumes of natural gas were agreed with the Azeri side, along with the conditions for their supply to the temporary delivery point. The available capacities, applicable procedures, and commercial requirements of all gas transmission systems, through which natural gas is transported along the alternative route to the Bulgarian system, were considered.

The Agreement for Gas Supply from Azerbaijan and the documents for its implementation foresee that "Bulgargaz" EAD shall receive supplies at the delivery point Komotini in Greece. This is the point of interconnection between the Trans-Adriatic Pipeline (TAP) and the Interconnector Greece-Bulgaria (IGB), through which it is envisaged that natural shall reach Bulgaria. The Agreement does not foresee that the Bulgarian side can unilaterally designate or change the delivery point, which means that the temporary change of the delivery point requires the approval of the Azeri supplier.

The IGB is intended for export to Bulgaria of natural gas produced within the full-field development of Shah Deniz gas-condensate field or Shah Deniz Stage 2 (SD2) in the Azerbaijani sector of the Caspian Sea. The interconnector will be linked to the TAP. Through IGB, Bulgaria will receive 1 billion cubic meters of Azerbaijani gas per year.

State-owned Bulgargaz EAD signed a contract with the Shah Deniz consortium to purchase 1 billion cubic meters of gas from the Shah Deniz-2 field. Azerbaijani gas will cover 25-30% of Bulgaria's natural gas needs. The length of the interconnector is 182 km, of which 150 km runs through the Bulgarian territory. The annual capacity of the interconnector is about 3-5 billion cubic meters.