June 21 (SeeNews) - Bulgaria's energy ministry said on Thursday that state-owned Bulgarian Energy Holding (BEH) will sign a Memorandum of Understanding (MoU) with the European Investment Bank regarding the construction of the Gas Interconnector Greece-Bulgaria (ICGB).
The document will be signed during the fifth Central and South-Eastern European Energy Connectivity (CESEC) ministerial meeting, which will be held on June 29 in Sofia, the energy ministry said in a statement.
The European Commission launched the CESEC initiative in 2015, with the aim of guaranteeing that all countries in Central and Southeast Europe have access to a more varied mix of energy sources, and are properly interconnected to the rest of Europe.
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 cu m 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 billion cu m 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 ($253.2 million). The project company has secured a sovereign guarantee of 110 million euro under the annual state budget act, which could ensure loan financing under preferable conditions.
The project is being implemented by the joint venture company ICGB, in which state-owned Bulgarian Energy Holding (BEH) and Greece-registered IGI Poseidon hold equal stakes. Greek public gas corporation DEPA and Italian energy group Edison own 50% each of IGI Poseidon.
($ = 0.8687 euro)