Bulgartransgaz to seek 150 mln euro loan to finance TurkStream project in Bulgaria

These funds will help the company meet its financial obligations under the contract signed with Saudi-led consortium Arkad for the construction of the leg of TurkStream gas pipeline and the deal with a consortium comprising Germany's Ferrostaal Industrieanlagen and Bulgaria's Glavbolgarstroy and Glavbolgarstroy International for the construction of compressor stations in Rasovo and Provadya, Bulgartransgaz CEO Vladimir Malinov said in an audio file published on the website of public radio BNR on Thursday.

In September Bulgartransgaz signed a 1.1 billion euro contract with the Arkad consortium for the construction of the TurkStream extension.

According to the terms of the contracts, Bulgartransgaz must make advance payments of 300 million levs ($168.4 million/153.4 million euro), VAT included, to the Arkad tie-up and about 168 million levs, VAT included, to the German-Bulgarian consortium, Malinov noted adding that the advance payments will be provided by Bulgartransgaz from its own funds.

The gas transmission operator will start paying the contractor the remainder of their deal's worth over a 10 year period after the pipeline becomes operational.

Bulgartransgaz has already informed Arkad of its decision to build the pipeline in 615 days, as 308 km will be built in the first 250 days.

However, if Bulgartransgaz finds financial resource at more favourable terms, it may revise the payment model, Malinov said.

On Thursday the country's energy ministry said that Bulgartransgaz has signed a 350.8 million levs contract for the construction of the compressor stations in northeastern and southwestern part of the country with the German-Bulgarian consortium. 

The compressor aggregates of the future compressor stations will be manufactured by US-based Solar Turbines. The Rasovo compressor station, located in Montana region, will have three 12 MW aggregators, while Nova Provadya compressor station, in Varna region, will have four 10MW aggregators.

The two compressor stations are crucial for the construction of the leg of TurkStream gas pipeline through Bulgaria.

Last month, energy minister Temenuzhka Petkova said that by the end of October Bulgartransgaz will complete the construction of an 11 km gas pipeline which will serve as part of the extension, starting from the Turkish border.

Works on the project also include delivery of the necessary equipment and materials as well as design.

At the end of January, Bulgartransgaz successfully completed the binding Phase 3 of the economic test for the pipeline project - part of a larger project of Russia's Gazprom to build a string of its TurkStream pipeline for transit of gas to Europe from Turkey via Bulgaria, Serbia and Hungary.

The offshore section of the TurkStream pipeline stretching 930 km across the Black Sea from Russia to Turkey consists of two parallel strings with annual throughput capacity of 15.75 billion cubic metres of gas each. One string is intended for consumers in Turkey, while the second will carry gas to customers in Europe through Bulgaria.

($ = 0.91117 euro)