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Bulgaria begins first Azeri gas imports, to increase Kulata capacity

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Platts European Gas Daily

Bulgaria begins first Azeri gas imports, to increase Kulata capacity

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Reaches Bulgaria via TAP at existing Greek entry point

To achieve new level of gas supply security: Borissov

IGB not expected to be completed until October 2021

London — Bulgaria has begun gas imports from Azerbaijan via the Southern Gas Corridor as planned, providing Sofia with a diversified source of supply and reducing its dependence on Russian imports.

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Deliveries began late on Dec. 31 as supplies via the TAP line to Italy also started.

"We have a new level of security of natural gas supply," Bulgarian Prime Minister Boyko Borissov said in a government statement Jan. 1 to mark the start of Azeri imports.

Bulgaria's Bulgargaz has a 25-year agreement with Azerbaijan's state-owned Socar for the supply of 1 Bcm/year of gas from Azerbaijan -- enough to meet around one third of Bulgaria's gas demand.

It was originally envisaged that Azeri gas would begin to flow via the high-profile Interconnector Greece-Bulgaria (IGB) from the start of 2021, but work on the pipeline has been delayed due to COVID-19.

Instead, gas is flowing temporarily via the now-complete TAP pipeline into Bulgaria at the existing Kulata-Sidirokastro interconnection point on the border with Greece.

Compressor upgrade

The Bulgarian government said in its statement that upgrade work to the Petrich compressor station was also ongoing to enable more gas to flow south-north at Kulata-Sidirokastro.

"The modernized compressor stations allow us to significantly increase the capacity of the Kulata-Sidirokastro interconnection point," it said.

In July 2016, Greek gas trader M&M Gas sent the first gas to flow from Greece to Bulgaria in a south-north direction at Kulata-Sidirokastro.

It followed an agreement signed in June 2016 by the transmission systems operators of Greece and Bulgaria -- DESFA and Bulgartransgaz -- to allow for gas to also flow in the reverse direction.

Before then, gas had only ever flowed in a north-south direction from Bulgaria to Greece, mostly originated from Russia.

The Bulgarian government said flows would enter Bulgaria at Kulata-Sidirokastro until the IGB is ready.

"Until the beginning of October next year, we will receive gas through a temporary delivery point at Kulata, which connects the TAP gas pipeline with the Greek gas transmission system," it said.

"In the meantime, we continue to build the IGB, which will be the point of delivery of gas from Azerbaijan after this transitional period of several months."

Bulgartransgaz executive director Vladimir Malinov said Jan. 1 that the flow of gas from Azerbaijan was part of the contract between Bulgargaz and Socar.

He said deliveries at Kulata-Sidirokastro would be made until October 2021 "after which time deliveries will continue at the Komotini connection point between TAP and IGB."

IGB status

IGB is designed to bring gas from Azerbaijan into Southeast Europe and is considered a significant part of efforts, backed by the European Commission, to improve the interconnectivity of the gas market in Southeast Europe.

It will be able to transport up to 3 Bcm/year in forward flow to Bulgaria -- with an option to be increased to 5 Bcm/yr -- and up to 2 Bcm/yr in reverse flow.

The project already has capacity of 1.57 Bcm/yr booked and its completion will bring four new shippers to the Bulgarian market, which is expected to improve competitiveness in the country.

As well as bringing gas from Azerbaijan, the operator of the pipeline sees other sources of gas potentially feeding into it in the future.

These include the planned LNG terminal at Alexandroupolis in Greece and gas from the East Mediterranean -- either via direct pipeline to Greece and LNG from Israel and Egypt.

Bulgaria has already imported regasified LNG from Greece's existing import terminal at Revithoussa.