Construction of a gas hub in Bulgaria (PCI 6.25.4)

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Construction of regional gas hub in Bulgaria – Balkan Gas Hub (PCI 6.25.4)

Description and objectives of the project:

The concept for the construction of a gas distribution centre (hub) on the territory of Bulgaria is based on the idea significant gas quantities from different sources to enter a real physical point in the region of Varna for further transport and gas trade will at the same time be organized at this point – a hub where each market participant could trade with natural gas at market principles. The idea of building a gas hub is supported by the strategic geographical location of Bulgaria, well-developed existing gas infrastructure for transmission and storage and the interconnection projects with Romania, Turkey, Greece and Serbia.

In the context of the European objectives for establishing an interconnected pan-European gas market, the realization of the gas hub concept is in line with the Sothern Gas Corridor development projects as well as in full compliance with the plans for the development of the European gas infrastructure aiming to improve the security of supply and diversify natural gas supply sources. The project corresponds to the needs of the region as identified by the High Level Group on Central and South Eastern Europe Gas Connectivity (CESEC) and by the European strategy for the Energy Union.

Building a gas hub aims at construction of the necessary gas transmission infrastructure to connect the natural gas markets of the Member States in the region - Bulgaria, Greece, Romania, Hungary, Croatia, Slovenia and through them to the Member States in Central and Western Europe, as well as to the countries of the Energy Community - Serbia, Macedonia, Bosnia and Herzegovina, etc. thus contributing to achieving the major priorities of the European energy policy.

Natural gas quantities from various sources could enter the hub - Russian natural gas through a new offshore gas pipeline and along the existing route, natural gas produced in the Black Sea shelf - Bulgarian (from blocks Khan Asparuh, Silistar, Teres) and Romanian, natural gas from the Southern Gas Corridor sources (Caspian, Middle East and Eastern Mediterranean) and LNG from the terminals in Greece and Turkey.

Status of the project:

  • In December 2015, the Bulgarian government and the European Commission agreed on the establishment of a joint working group (JWG) which shall support the development of the trade concept, business and financial plan of the Balkan Gas Hub. The working group led by the Deputy Prime Minister, Mr. Tomislav Donchev (on Bulgarian side) and Mr. Klaus-Dieter Borchardt – Director Internal Energy Market (on the European Commission side) evaluated the technical, legal, regulatory and financial aspects of the project. The main tasks of the working Group were focused on identifying solutions for the common challenges encountered in the development of the stable regulatory framework and the trade environment aimed at facilitating the connection between Bulgaria and the rest of South-East Europe. Last but not least, within the framework of the group, a priority was established for the development of a concept for the business model of Balkan Gas Hub.
  • A Balkan Gas Hub Investors Round Table has been conducted in the period 04-06 September 2016 in Varna (Bulgaria) during which the invited concerned stakeholders were further acquainted with the concept for the construction of the gas distribution centre on the territory of Bulgaria.
  • In connection with the identified next step of the project implementation referring to the necessity a detailed feasibility study to be conducted, the necessary application forms and documents for the co-financing of Action "Feasibility study of the project gas hub 'Balkan' under the CEF programme (CEF Call 2016-2) were prepared. Following the approval by the management of Bulgartransgaz EAD and the Minister of Energy of Bulgaria the project proposal for the above Action was submitted within the determined deadline - November 8, 2016.
  • The results from the second call for proposals were announced in February 2017 and Action No.6.25.4-0015-BG-S-M-16 "Feasibility study for the Balkan gas project” was also included in the projects list approved by the Coordination Committee. A grant will be awarded.
  • In May 2017 Bulgartransgaz EAD signed a Grant Agreement INEA/CEF/ENER/M2016/1290649. The amount of the grant in line with the Grant Agreement is 50% of the amount of the Action – up to EUR 920 500 (nine hundred and twenty thousand and five hundred).

As regards the signed Grant Agreement activities have started for the preparation of a documentation on the launch of a public procurement for the selection of a contractor.

Information for the public and planning of public discussions:

  • Description of the Balkan gas hub project (PCI 25.4) and information on the current status of project implementation is published and is periodically updated on Bulgartransgaz EAD internet website;
  • Information on discussions and consultations with the affected public will be published in line with the applicable legislative provisions dealing with the specific project implementation stage.

Project Promoter: Bulgartransgaz EAD