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News 20 Jan 17

Bulgaria, Serbia Voice High Hopes About Gas Pipeline

Ministers of Bulgaria and Serbia have agreed a gas interconnector should become fully operational by 2020, helping both countries reduce their dependency on Russian energy.

Mariya Cheresheva, Maja Zivanovic
BIRN
Sofia, Novi Sad
Temenuzhka Petkova and Alexander Antic on Thursday in Sofia. Photo: Bulgarian Ministry of Energy press service

Bulgaria’s outgoing energy minister, Temenuzhka Petkova, and her Serbian counterpart, Aleksandar Antic, signed a memorandum of understanding on the construction of a gas connection between the two countries in Sofia on Thursday.

The two countries agreed to start the construction of the pipeline by May 2019, so the connection can be in place by the end of 2020, Bulgaria’s energy ministry said.

“Whatever government comes to power [in Bulgaria] should unite behind gas diversification. This means security of deliveries and competitive prices,” Petkova said, expressing hopes that the next Bulgarian government would build on the agreement reached with Serbia.

“The engagement of different companies will be big,” she noted.

Antic added that Serbia would receive European funding to build its part of the connection in 2018, while the Bulgarian minister explained that Bulgaria has allocated 45 million euros for the Bulgarian part through the “Innovation and Competitiveness” operational program.

The gas connection between Bulgaria and Serbia is one of seven priority gas infrastructure projects in Central and Eastern Europe aimed at diversifying the sources and routes of gas deliveries in Europe.

On completion, it will allow for the transfer of between 1 and 1.8 billion cubic metres of natural gas annually from Bulgaria to Serbia and 0.15 billion cubic metres from Serbia to Bulgaria.

The pipeline will be 62.2 kilometres long, connecting the Sofia region near the town of Novi Iskar with Nis in Serbia.

During the International Gas Conference in the Bulgarian coastal city of Varna, the director of the Serbian gas company Srbijagas Dusan Bajatovic said Serbia might get 60 million euros from the European Commission to construct the gas link.

Serbia has high expectations of the joint project with Bulgaria after Russia cancelled the South Stream pipeline in 2014 - one of the projects emerging from the Serbian-Russian Energy Agreement signed in 2008.

The Agreement promised big benefits for Russia in Serbia, such as tax reliefs, and resulted in Russia’s acquisition of the majority stakes in Serbian national gas and oil company, Naftagas.

The scrapping of South Stream did not destroy Bulgaria’s gas ambitions. On the contrary, in December 2014 outgoing prime minister Boyko Borissov came up with the idea of establishing an EU-funded regional gas hub in Bulgaria that would connect natural gas markets in the region with those in Central and Western Europe.

Building gas connections with its neighbouring countries is a key part of Bulgaria’s strategy to become a Balkan regional energy hub, but up to now it has completed only the one with Romania.

The construction of the gas link with Greece, also a priority project for the EU, is expected to start soon, after the two countries signed an investment agreement in October 2016.

According to Antic, development of the gas connection between Bulgaria and Greece directly affects the Bulgarian-Serbian pipeline as it could provide Serbia with opportunities to deliver gas from the southern corridor as well as to buy liquid gas from a future LNG terminal in Alexandroupolis.

Ivan Hinovski, president of the Bulgarian Energy and Mining Forum, told BIRN that the joint pipeline project is an opportunity for two countries that are heavily dependent on Russian energy to diversify their gas deliveries.

He said it would allow Serbia through Bulgaria to deliver gas from Iran, Azerbaijan and Turkmenistan through the Trans Anatolian Pipeline project, or TANAP, which is under construction in Turkey.

He said he is optimistic that the project could be completed in three to four years.

“This intersection is interesting for Bulgaria, for Serbia and for Europe and it could benefit from the positive attitude of the European Commission”, the energy expert noted. 

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