Gas Processing & LNG is Produced by Gulf Publishing Holdings LLC



Bulgaria prepares to transport Russian gas to central Europe

SOFIA (Reuters) - Bulgaria will go ahead with plans to spend 1.4 billion euros ($1.59 billion) to build a new gas link to transport Russian gas from the TurkStream pipeline to Europe, bypassing Ukraine to the south.

Bulgarian lawmakers on Friday gave the green light to state gas company Bulgartransgaz to launch tenders to build a new 484-km gas pipeline from its border with Turkey to Serbia by 2020 that will carry mainly Russian natural gas.

TurkStream is part of the Kremlin’s plans to bypass Ukraine, currently the main transit route for Russian gas to Europe, and strengthen its position in the European market.

Its two lines will each have an annual capacity of 15.75 billion cubic meters. Russian energy giant Gazprom has completed the first line of pipeline to Turkey for local gas consumption.

Gazprom said on Friday it was considering booking capacity in the Bulgarian gas system. That would effectively ensure that the gas Russia plans to send to Europe through the second line of its Black Sea pipeline will pass through the country, the Bulgarian energy minister said.

Bulgartransgaz has already tested market interest to expand its gas infrastructure and expects final bids by shippers by the end of December.

The approval of the project comes at a time of increased tension between Russia and Ukraine, raising concerns in Sofia that the conflict may once again put the brakes on Russia’s plans to ship gas through Bulgaria.

“What follows from now on is strict observation of European Union rules and procedures, so that we can eliminate all eventual mistakes that in the past have led to the cancellation of South Stream,” Energy Minister Temenuzhka Petkova said.

Bulgaria is still smarting from the 2014 cancellation of Russia’s plan to bring gas to its shores with its South Stream pipeline. The project, which had promised the Balkan country on the European Union’s periphery money and clout, was dropped by Russia after it blamed opposition from Brussels.

At present, Gazprom transports about 14 billion cubic meters (bcm) of gas a year to Turkey via Bulgaria through a contract that runs through 2030.

Bulgaria is ready to give up on its take-or-pay option in the current contract if it gets a new 20-year deal to transport Russian gas through the new pipeline, saying its net profit for the period could be as much as 2.2 billion euros.

Brussels is concerned that Bulgaria may opt to simply send Russian gas onto Europe to earn transit fees rather than allowing it to be traded at its planned Balkan Gas Hub, cementing its almost complete dependence on Gazprom.

Some energy experts have also voiced concerns that Bulgaria is moving too quickly with projects linked to Russian gas and dragging its feet over plans to develop links that would allow diversification.

“The aim seems to be to fuel money to build new gas infrastructure, rather than focus on liberalizing the gas market and on diversifying gas supplies,” said Martin Vladimirov with independent think-tank Center for the Study of Democracy.

“What follows from now on is strict observation of European Union rules and procedures, so that we can eliminate all eventual mistakes that in the past have led to the cancellation of South Stream,” Energy Minister Temenuzhka Petkova said.

Bulgaria is still smarting from the 2014 cancellation of Russia’s plan to bring gas to its shores with its South Stream pipeline. The project, which had promised the Balkan country on the European Union’s periphery money and clout, was dropped by Russia after it blamed opposition from Brussels.

At present, Gazprom transports about 14 billion cubic meters (bcm) of gas a year to Turkey via Bulgaria through a contract that runs through 2030.

Bulgaria is ready to give up on its take-or-pay option in the current contract if it gets a new 20-year deal to transport Russian gas through the new pipeline, saying its net profit for the period could be as much as 2.2 billion euros.

Brussels is concerned that Bulgaria may opt to simply send Russian gas onto Europe to earn transit fees rather than allowing it to be traded at its planned Balkan Gas Hub, cementing its almost complete dependence on Gazprom.

Some energy experts have also voiced concerns that Bulgaria is moving too quickly with projects linked to Russian gas and dragging its feet over plans to develop links that would allow diversification.

“The aim seems to be to fuel money to build new gas infrastructure, rather than focus on liberalizing the gas market and on diversifying gas supplies,” said Martin Vladimirov with independent think-tank Center for the Study of Democracy.


Copyright © 2018. All market data is provided by Barchart Solutions. Futures: at least a 10 minute delay. Information is provided 'as is' and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.

                                  CMEGroup                                     Icelogo

FEATURED COLUMNS

Editorial Comment
-Adrienne Blume
China is hosting the 19th International Conference and Exhibition on Liquefied Natural Gas (LNG2019) in Shanghai from 1–5 April—an appropriate choice of host country, given China’s increased appetite for natural gas.
EWAnalysis: Canada comes late to LNG; projects and prospects mixed
- Energy Web Atlas
Canada has abundant natural gas resources.
Executive Viewpoint: BHGE developing technology-driven solutions to reduce total cost of ownership
-Alberto Matucci
While BHGE recently won new orders for LNG projects, the company remains committed to differentiating the business, implementing solutions proven in LNG into other applications of the oil and gas value chain.
Industry Trends: Russia and US go head-to-head over EU gas market
-Eugene Gerden
Lower-cost Russian gas will likely continue to dominate the EU market in the coming years, despite the growth in oil prices, to which Russian gas prices are linked.


Reliable Operations & Saving OPEX for Gas Plant Refrigeration – Selecting the right technologies

Register Now

By selecting integrally geared turbocompressors for gas plant refrigeration duty coupled with a mag bearing turboexpander, operators get the added values of technology with highly reliable operations and reduced OPEX. Join Sami Tabaza and Chris Blackmer from Atlas Copco Gas and Process for a presentation followed by Q&A surrounding the turbocompressor and turboexpander technologies that can efficiently and reliably fit your gas plant design and operation to get the advantages of both technologies.

June 20, 2019 10:00 AM CDT

Register Now

 

Please read our Term and Conditions, Cookies Policy, and Privacy Policy before using the site. All material subject to strictly enforced copyright laws.
© 2019 Gulf Publishing Holdings LLC.