February 22, 2017 / 1:25 PM / in a year

Work to begin on Bulgaria-Greece gas pipeline in early 2018

SOFIA, Feb 22 (Reuters) - Construction of the Interconnector Greece-Bulgaria (IGB) natural gas pipeline will begin next year and secure the delivery of one billion cubic metres (bcm) of Azeri gas a year, interim Bulgarian energy minister Nikolay Pavlov said.

“At the moment the preparation of tender documents for the building of the IGB is under way, so that the construction can start at the beginning of 2018,” the energy ministry quoted Pavlov as saying.

Pavlov, who met his Azeri counterpart Natiq Aliev in Baku, said that financing for the 182-km, 220-million-euro ($231 million) pipeline project had been secured.

Bulgarian state energy holding company BEH holds a 50 percent stake in a joint venture which will build the pipeline, while Greek state energy firm DEPA and Italy’s Edison each hold 25 percent.

The project has received a 45-million-euro grant from the European Union while Bulgaria has extended 110 million euros in state guarantees to secure loans from the European Investment Bank and European Bank for Reconstruction and Development, Pavlov said.

The IGB pipeline is expected to become operational in 2020, when state gas company Bulgargaz should start receiving 1 bcm of gas per year from the Shah Deniz 2 gas field in the Caspian Sea off the coast of Azerbaijan.

Azerbaijan’s Aliev also confirmed his country’s interest in investing in expansion of Bulgaria’s Chiren gas storage facility, the energy ministry said. ($1 = 0.9523 euros) (Reporting by Tsvetelia Tsolova; editing by Jason Neely)

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