June 29 (SeeNews) - ICGB, the company developing the Gas Interconnector Greece-Bulgaria project, said on Friday that state-owned Bulgarian Energy Holding (BEH) signed a Memorandum of Understanding (MoU) with the European Investment Bank (EIB) on the construction of a gas connector between the two countries.
"The memorandum concerns securing preferential loan financing in connection with using the state guarantee of Bulgaria (expected 110 million euro) and is a key step in IGB’s realization. The preferential loan is one of the main sources of funding for the project," ICGB said in a statement.
ICGB has also signed an agreement for cooperation with the Trans Adriatic Pipeline (TAP) for connectivity of the two gas pipelines. Connecting with the Trans Anatolian Pipeline (TANAP) at Greece's border with Turkey, TAP will stretch across northern Greece, Albania and the Adriatic Sea before reaching Italy's coast where it will connect to the Italian natural gas network.
"This really is a strategic project which – via important synergies - enables gas from the Southern Corridor, and LNG facilities in Greece, to flow into the Bulgarian gas network and further into the South-Eastern Europe region,” Konstantinos Karagiannakos, executive director on the Greek side for ICGB, said.
"We are especially pleased that the national regulatory authorities of Greece and Bulgaria approved in May ICGB’s application for exemption from the EU rules on regulated access and look forward to the European Commission’s endorsement," he added.
A joint declaration was also signed by the shareholders in the project company, confirming a commitment for development and approval of a final business plan and the irreversible commitment of the shareholders for readiness to start construction.
The IGB pipeline will connect the Greek gas transmission system in the area of Komotini to the Bulgarian gas transmission system in the area of Stara Zagora.
The planned length of the pipeline is 182 km and the projected capacity will be up to 3 billion cubic metres (bcm) per year in the direction from Greece to Bulgaria. Depending on interest from the market and the capacities of the neighbouring gas transmission systems, the capacity of the pipeline can be increased up to 5 bcm per year, thus allowing for physical reverse flow from Bulgaria to Greece with the additional installation of a compressor station.
The gas link is estimated to cost 220 million euro ($256.5 million).
The project is being implemented by the joint venture company ICGB, in which state-owned Bulgarian Energy Holding (BEH) and Greece-registered IGI Poseidon hold equal stakes. Greek public gas corporation DEPA and Italian energy group Edison own 50% each of IGI Poseidon.
($ = 0.8576 euro)