Daily Management Review

Bulgaria and Slovakia signed an agreement on Eastring gas pipeline


06/10/2016


According to Bulgarian Novinite agency, representatives of Bulgarian company Bulgartransgaz and Eustream (a Slovak gas transmission system operator) signed an agreement to build a gas pipeline Eastring.



Michael Trolove
Michael Trolove
The companies agreed to cooperate in studying new opportunities for the pipeline’s development and attracting investment in the project from the EU. This project will allow Bulgaria to reduce its dependence on Russian gas supplies.

In November 2015, it was reported that three South-East to Central Europe gas pipelines were included in the list of priority projects. Among them are Eastring, promoted by Slovakia, and Tesla, supported by Austria. The European Commission has approved them quickly.

Eastring pipeline’s presentation took place in November 2014. The project is implemented by Slovakia, Hungary, Romania and Bulgaria.

The pipeline will connect Slovakia with the Balkan countries and the existing gas transportation system of Ukraine, Slovakia, Czech Republic, Hungary and Romania, with the planned gas hub in the Black Sea port of Varna. 

This project is supposed to give to the Bulgarian economy an impetus necessary for growth. It is expected that Bulgaria will become a regional gas hub in the Balkans, which will help the country reduce its dependence on Russian gas supplies through a single pipeline that goes through Ukraine.

European countries, in particular the Baltic and the Balkan countries, have repeatedly stated that they intend to reduce dependence on Russian gas. To meet this objective, the European countries are developing interconnections system.

Bulgaria plans to buy 1 billion cubic meters per year from a consortium, which is developing the Shah Deniz field.

There is a lot of sayings about this field’s development, and high expectations are put on the Azerbaijani deliveries. However, the export of gas from the field in Europe, according to the plan, will start only at the beginning of 2020.

In addition, LNG terminal in Greece, which is currently in the planning stage, is also referred as a possible source of supply.

In general, there are more than 20 regasification terminals in Europe. However, as analysts note, many of them are bankrupt and closed.

Thus, from 2010 to 2014, 38% drop in LNG imports accounted for the largest buyer - Spain.

In general, analysts say, American LNG in Europe is much more expensive than Russian gas, but there are countries that would prefer to receive raw materials from overseas for political reasons.

Countries of Western Europe, with a look at Norway, are also called among the possible sources of gas.

Iran gives a hope, too. The country has repeatedly stated its willingness to recover its share of the global energy market to the same values that existed before the imposition of sanctions.

Another question that arises in connection with this project comes to money: where the countries are going to find necessary amount of money for construction of the pipeline?

Status of the priority European project infrastructure (PCI) gives the right to attract finances from the EU funds.

Nevertheless, EU can cover only a part of the pipeline construction.

Therefore, the authorities of Bulgaria and the Slovak Republic are counting on the fact that the project will cause interest of investors and energy companies.

Another source of financing, as stated by Eustream, will be consortium of participating countries - Slovakia, Bulgaria, Romania and Hungary.

However, taking into account the adverse financial position of all four countries, substantial financial investment in the project is doubtful.

In addition, authorities are hoping that the project will get interested commercial banks or the European Investment Bank. 

source: novinite.com






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