You have 10 free articles left this month. Get your freeBasic subscription now and gain instant access to more.

UPDATE 1 - EC approves 33 mln euro financing for construction of Greece-Bulgaria gas link

Author Mario Tanev
UPDATE 1 - EC approves 33 mln euro financing for construction of Greece-Bulgaria gas link Denys Prykhodov/Shutterstock.com

SOFIA (Bulgaria), April 2 (SeeNews) - The European Commission said on Tuesday that it has approved 33 million euro ($37 million) in EU financing for the construction of the gas interconnector Greece-Bulgaria.

"The two countries' gas systems will be linked for the first time, diversifying energy sources in the region and increasing energy security," the Commission said in a statement.

As a result of the project, consumers will enjoy lower prices on the back of increased competition on the gas market, the EU's executive body added.

The pipeline is a European Project of Common Interest, contributing to the objectives of the Energy Union

Earlier on Tuesday, ICGB, the company developing the Gas Interconnector Greece-Bulgaria project, said that Greece's J&P-AVAX and a tie-up named IGB-2018 have submitted offers in the tender for awarding a contract for construction of the gas link. The tender is worth an estimated 145 million euro, VAT excluded.

According to previous statements from ICGB, the IGB-2018 tie-up comprises Italy's Bonatti, and Bulgarian construction companies GP Group and Glavbolgarstroy International.

ICGB is planning to complete the selection process next month, paving the way for construction work to begin in June. The deadline for completing construction works is 18 months from their start.

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 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 overall. The project company has secured a sovereign guarantee of 110 million euro which could ensure loan financing under preferable conditions.

ICGB is a 50/50 joint venture of state-owned Bulgarian Energy Holding (BEH) and Greece-registered IGI Poseidon. Greek public gas corporation DEPA and Italian energy group Edison own 50% each of IGI Poseidon.

($ = 0.8924 euro)

Compare