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Caspian Energy Journal Caspian European Club
Thursday, 13 December 2018 16:52

Bulgaria is actively working for the construction of the interconnector - Minister of Energy Featured

Bulgaria is actively working for the construction of the interconnector - Minister of Energy

Caspian Energy (CE): Early in November Sophia hosted the 5th session of the Azerbaijani-Bulgarian Joint Commission on Trade-Economic and Scientific-Technical Cooperation. As a Co-Chair of the Commission from the Bulgarian side, which issue do you consider important in mutual relations of the two countries?

Temenuzhka Petkova, Minister of Energy of the Republic of Bulgaria : Azerbaijan is an important economic partner for us, with whom we want to develop long-term and mutually beneficial cooperation. In this connection, the fifth meeting of the Bulgarian-Azerbaijani Intergovernmental Commission for Economic Cooperation took place in Sofia between 6 and 8 November, 2018. A business forum was organized within the framework of the meeting with the participation of a commercial mission of Azerbaijan companies.

Political relations have been excellent at the level of strategic partnership between the two countries and I think that the time has come for them to grow into a fruitful economic partnership. I can say that energy is a leading industry when we talk about the Bulgarian-Azerbaijani relations. This strategic partnership includes the supply of Azerbaijani natural gas to Bulgaria from the Southern Gas Corridor. In addition, we also discussed future joint deliveries of Azerbaijani natural gas through the territory of Bulgaria to other countries of the region, via the interconnector Greece-Bulgaria, the existing gas transmission system of Bulgartransgaz and through the strategic project for “Balkan” gas hub. We consider Azerbaijan as one of the key suppliers of natural gas for “Balkan” hub. Another excellent opportunity to develop our bilateral relations is the investment of SOCAR in the gas distribution sector in Bulgaria.

We are working hard to promote and strengthen bilateral cooperation also in other industries such as agriculture, tourism, transport, light and food industries, industry, pharmaceutics etc. Our aim is to increase and diversify bilateral commodity turnover, as well as to promote Bulgarian investments in Azerbaijan and attract Azerbaijani investments in Bulgaria accordingly.

I would like to point out the significant contribution of my colleague - co-chairman of the intergovernmental commission from the Azerbaijan side- Minister Inam Karimov, with whose help we have managed to conduct a very successful meeting. I am convinced that the events held will give a strong boost to bilateral economic contacts in all sectors of mutual interest and will outline new, even clearer prospects for their development.

CE: How will the innovation-related cooperation be held?

Temenuzhka Petkova: There is a serious interest in Bulgarian companies, including high tech and innovative ones, for investments in Azerbaijan. In this regard, a specific commercial proposal was made by a Bulgarian company to the Ministry of Agriculture of Azerbaijan for the construction of a joint high-tech plant for the production of vaccines for animals and veterinary products for the Azerbaijan and regional markets. Other high-tech Bulgarian companies are also interested in the Azerbaijan market, including the establishment of joint ventures on the territory of Azerbaijan with Azerbaijan partners, which will ensure the uptake of innovative technologies and products in the Azerbaijan economy. It would therefore be good to implement several already announced pilot projects for the establishment of joint ventures in Baku, which will give a clear signal to Bulgarian innovative companies about the attractiveness of the Azerbaijan market.

CE: In recent years, the Government of Bulgaria has been making active efforts to ensure diversification of gas supplies. What role can the agreement, reached between Bulgargaz and SOCAR on supply of Azeri gas to Bulgaria, play in this regard?

Temenuzhka Petkova: A strategic priority for the Bulgarian Government, as well as for the European Union, is the diversification of gas supplies. In this regard, it is of strategic importance for us to ensure the supply of the agreed between Bulgargaz and SOCAR 1 bcm of Azerbaijani natural gas for Bulgaria from the second phase of the gas field Shah Deniz. That is why we are actively working for the construction of the interconnector Greece-Bulgaria through which the supply of Azerbaijani natural gas from the Southern Gas Corridor to Bulgaria will be carried out. In practice after 2020, the Azerbaijani natural gas from Shah Deniz 2 under this contract will meet about 25%-30% of the consumption of natural gas in Bulgaria. This is a significant share and will greatly increase our energy security. At the same time, competition on the Bulgarian gas market will be promoted, thus ensuring competitive market prices for household and industrial consumers.

CE: In your opinion, which efforts should be undertaken to ensure much higher growth of turnover between Azerbaijan and Bulgaria, which has started growing since 2017?

Temenuzhka Petkova: I believe that Bulgaria and Azerbaijan could promote stronger commodity turnover in competitive sectors for both countries by supporting the joint partnership between companies in order to implement the agreements reached between President Aliyev and Prime Minister Borissov at the meeting in Baku on 15 January, 2018. It must be borne in mind that a significant increase in the turnover is expected as of 2020 when the supply of Azerbaijani natural gas to Bulgaria will begin. Great interest was shown by over 70 Bulgarian companies from different sectors during the business forum in Sofia. This is clear evidence that the Bulgarian business considers Azerbaijan to be an attractive, predictable and stable market with a good business climate, and I believe that there are excellent political relations between our two countries as well.

CE: In your opinion, what is the role of the Southern Gas Corridor in strengthening the world’s energy security map? Which party will get a bigger benefit from implementation of this project?

Temenuzhka Petkova: The Southern Gas Corridor is the fourth gas corridor that provides natural gas to the EU that is the biggest importer of natural gas in the world. Therefore, the Southern Gas Corridor is clearly of strategic importance for ensuring security of gas supplies to the EU. I believe the Southern Gas Corridor is a project that will bring benefits to all participants: for the EU – strengthening energy security and access to a new source, for Azerbaijan - access to a stable, solvent and predictable market, and for transit countries - transit revenues and significant investments in their gas infrastructure.

I use the opportunity to underline that Bulgaria has always supported the development of the Southern Gas Corridor whose main driver is Azerbaijan. The projects for interconnectors Greece – Bulgaria (IGB) and Turkey – Bulgaria (ITB) are an integral part of SGC. Bulgarian Ministry of Energy provides its institutional support for SOCAR's application for grants under the EU Connecting Europe Facility (CEF) for the implementation of specific activities on the TANAP pipeline, with which the Bulgarian side makes a significant contribution to the implementation of the projects of the Southern Gas Corridor.

CE:Which stage has been reached in construction of the gas interconnector with Greece?

Temenuzhka Petkova: The interconnector Greece- Bulgaria is a key project for ensuring the supply of natural gas from Azerbaijan to Bulgaria. The project company ICGB is currently actively working to complete the tender procedures for the delivery of the pipes and the construction of IGB, and we expect these activities to be finalized successfully by the end of this year. The issues of the structure and sources of financing of the project are entirely resolved and we have received all approvals from the energy regulators and the EC. We are planning the construction of IGB to start at the end of this year or the beginning of next year and finish in 2020, in synergy with the launch of the Trans - Adriatic pipeline /TAP/, with the aim of ensuring 1 bcm natural gas per year under the long-term contract with the Shah Deniz consortium.

CE:  Which opportunities for cooperation are opening between Baku and Sofia within the framework of large transport infrastructure projects (Baku-Tbilisi-Kars and Baku International Sea Trade Port) initiated by Azerbaijan?

Temenuzhka Petkova: Bulgaria and Azerbaijan have strategic location and important transport corridors that connect Europe and Asia cross both countries. For Azerbaijan and Bulgaria, the East-West transport corridor is connecting and of general interest and it would benefit both sides. In this regard, Bulgaria welcomes the major transport projects carried out by Azerbaijan along the East–West corridor, such as the railway project Baku-Tbilisi-Kars and Baku International Sea Trade Port, which provide significant opportunities for freight transport from and through Azerbaijan to Bulgaria and Europe. The railway Baku-Tbilisi-Kars ensures a comfortable and fast railway corridor that connects our two countries through Georgia and Turkey. Of interest is also the opportunity to transport goods and freights through the Caspian Sea and through the Black Sea to our Black Sea ports Varna and Burgas, and from them to European markets. Let us not forget air transport as a major achievement in our bilateral cooperation in transport. We consider the opening of the direct air line Baku –Sofia important for tourism and the promotion of business contacts between our two countries.

CE: Given the biggest gas compressor station it possesses in the region, does Bulgaria plan to become a Black Sea gas hub for the Balkan states?

Temenuzhka Petkova: Over 30 years Bulgarian gas transmission system has been providing reliable transit of Russian natural gas in Southeast Europe and particularly for Turkey, Greece and Macedonia. The gas transmission network of Bulgartransgaz EAD has significant capacity and is well developed and maintained. Over 80% of the capacity of compressor stations in Southeastern Europe is concentrated in Bulgaria. Taking into account these advantages of the Bulgarian gas transmission system, the long term experience and the strategic geographic location, Bulgaria together with the European Commission have developed the concept of regional “Balkan” gas hub.

The interim results of the feasibility study of the regional gas hub project “Balkan”, co-financed by the EC, have shown that the project is extremely important and economically advantageous for Bulgaria, South East Europe and the EU. In this connection, Bulgartransgaz EAD and SOCAR are jointly working on the concept and they signed a Memorandum of Understanding in 2017. Taking into account the positive results of the feasibility study, we expect Azerbaijan to be one of the natural gas suppliers for the regional “Balkan” gas hub.

CE:  Does Bulgaria plan to extend its transit gas infrastructure in view of the increase of gas demand in the European Union?

Temenuzhka Petkova: Bulgaria closely monitors the consumption forecasts on the regional and European gas markets, along with the development of major gas projects. Over 30 years Bulgaria has been a gas transmission center in South East Europe and intends to maintain and expand its position as a major natural gas transporter in the region. We continue building the necessary infrastructure – interconnectors with neighbouring countries, “Balkan” gas hub and we are also working on the expansion of the capacity of UGS Chiren. The implementation of the above projects will enhance the capacity and the potential of the Bulgarian gas transmission system, while Bulgaria will reaffirm its strategic position on Europe's gas map.

                                                                                 Thank you for the interview

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