Having taken over the six-month rotating presidency of the Council of the EU for the first time since its accession to the Bloc, back in 2007, Bulgaria now shoulders the weight of political mediation in favor of a real European perspective for the geopolitically turbulent Western Balkan region. In the background of extremist infiltration in Bosnia and Kosovo, bad governance and corruption phenomena in Albania and the latest upheaval in Greece-FYROM relations, as ongoing negotiations on the name dispute resolution are put into risk because of widespread opposition by the peoples and certain political groups in the two countries, Bulgaria wants to set an example to its neighbors through the implementation of the acquis communautaire to the benefit of domestic policy in different sectors. Energy is numbered among those key fields, since the Balkans’ disconnection from Central Europe’s energy network has created the need for the construction of new infrastructure and pipeline routes. In order to ensure energy security and supply diversification, Bulgaria relies to a great extent on bilateral cooperation with Azerbaijan.
On the occasion of his visit to Baku on January 15, Bulgarian Prime Minister Boyko Borissov expressed his country’s profound interest in buying Azerbaijani gas. Out of the 10BCM/a of gas from the Shah Deniz II that will be delivered to Europe, as soon as the Southern Gas Corridor pipe network is commissioned, Bulgaria is going to receive 1BCM/a via the 182km-long Interconnector Greece-Bulgaria (IGB). The Komotini-Stara Zagora line, developed since 2011 by Bulgaria Energy Holding and IGI Poseidon (a 50-50 joint venture of the Greek DEPA and the Italian Edison), is designated as a European Project of Common Interest (PCI). Its construction is scheduled to begin in June 2018. Once completed, it will be able to carry up to 3-5BCM/a with reverse flow capacity, practically covering Bulgaria’s entire annual energy consumption. At present, Bulgaria remains heavily dependent on Russian imports for its primary energy resources -coal, natural gas, nuclear and oil. With Bulgarian territory gasified at about 3%, the country has set itself an ambitious goal of replacing wood and coal with the more ecologically sound natural gas for heating purposes, Mr. Borissov said. Lignite combustion provides 50-90% of domestic electricity generation in countries of the Balkan peninsula (Serbia, Kosovo, Bosnia and Herzegovina, Montenegro, FYROM, Greece, Bulgaria, Romania, Slovenia), making South Eastern Europe the largest consumer of lignite in Europe. Mr. Aliyev pointed to Azerbaijan’s successful investments in Georgia’s social gas sector, thus affirming his country’s eagerness to help Bulgarian households to phase out coal, in line with the EU’s commitments under the Paris Agreement.
And as progress on the Southern Gas Corridor has encouraged almost all SEE states to envisage themselves as potential gas and/or electricity hubs, Mr. Borissov could not avoid but bringing up the issue of future Azerbaijani investment in Bulgaria’s gas transmission system. Following its failure to acquire a 66% stake in the Greek gas grid operator DESFA, SOCAR kept searching for viable investment opportunities in the region. In 2017, the Azeri state energy company co-signed a Memorandum of Understanding with the Bulgarian gas transmission system operator Bulgartransgaz, in order to examine additional gas supply routes towards Bulgaria and through Bulgaria to other countries in the South-Eastern Europe axis, including through the building of the so-called ‘’Balkan’’ gas hub. Also classified as a PCI, and EU-financed by 50%, the ‘’Balkan’’ gas hub has to do with the concept of transferring significant gas quantities from various sources to enter a physical point in the Bulgarian port city of Varna for further transportation and trade towards multiple geographical directions across Europe. In December 2017, Bulgaria’s EMG consult and the Swiss-based AF consult were awarded a $1.4M contract to carry out a feasibility study on the project. After South Stream’s 2014 cancellation, the decision on the deviation of Turk Stream to Bulgaria, instead of Greece, would further strengthen the ‘’Balkan’’ gas hub, as one of the pipeline’s two branches could reach Varna. Finally, the onshore Interconnection Turkey-Bulgaria (ITB), under realization by Bulgartransgaz and BOTAS, will give Bulgaria access to all current and future entry points and sources of Turkey (including Azeri gas and LNG spot supplies from existing Turkish terminals), further enhancing Bulgaria’s position as a reliable transit country.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-january-25-2018/#3
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