The implementation of the project is related to the policy of the Republic of Bulgaria aimed at providing infrastructure for access to alternative sources and routes for import of natural gas and physical connectivity of the country with the Southern gas corridor.
By constructing the IGB gas pipeline the country aims at connecting to the operational gas interconnector Turkey- Greece (TGI) for import of natural gas from the Caspian region and the Middle East and at the same time the country will be connected to the Transadriatic gas pipeline, which is being constructed, for natural gas supplies from the Azerbaijani field Shah Deniz 2. The Transadriatic gas pipeline is planned to cross the region of the town of Komotini in Northern Greece where the entry point of IGB is.
The IGB gas pipeline will provide options for long-term supply of the 1 bcm/year for 25 years contracted for Bulgaria, from H2 of 2020, from Phase 2 of Shah Deniz field as well as supplies from the liquefied natural gas (LNG) market via the existing re-gasification terminal Revithoussa (Greece), the existing re-gasification terminals in Turkey or the planned new terminal in Northern Greece near Alexandroupolis.
By constructing the gas pipeline Bulgaria and Greece will be able to react efficiently in the event of possible disruptions in the supplies from external sources or in the event of seasonal peaks in natural gas consumption- the infrastructure for provision of supplies during crises and covering peak demand in the months of big consumption will be available.
Bulgaria will be able to play an active role in the regional transmission and trade with natural gas with the construction of additional interconnectors between Bulgaria and the neighbouring countries.
The project Gas Interconnector Greece-Bulgaria (IGB project) provides for the construction of a gas pipeline with a capacity of up to 3 bcm/year from the town of Komotini to the town of Stara Zagora , 182 km long, 151 km of which on Bulgarian territory. The transmission capacity of the gas pipeline can be upgraded to 5 bcm/year with the additional construction of a compressor station.
The project is implemented by the joint investment company ICGB AD where BEH EAD and IGI Poseidon have equal shareholding.
IGI Poseidon is a joint investment company, where DEPA SA. and Edison International Holding N.V have equal shareholding. The company ICGB AD was registered in January 2011 pursuant to Bulgarian legislation. The joint company is to construct and operate the gas pipeline, to be licensed as its operator , to allocate its capacity and to receive the revenues from natural gas transmission.
On 10 December 2015 a final investment decision (FID) was adopted by the shareholders. The FID taken stipulates the commitment of the shareholders to proceed to construction after obtaining all technical and regulatory permits for construction of the IGB gas pipeline and confirming and updating the financial parameters set in the investment decision.
The IGB project has obtained a positive EIA decision both on Bulgarian and Greek territory. A detailed route for construction on Bulgarian and Greek territory has been approved. An Installation Act, Installation Permit (construction permit) have been obtained on Greek territory and an ASFA license ( a license for an independent gas transmission system) is expected to be issued by the end of July 2019. A Detailed spatial plan- Parcel plan of the site has been approved and has come into force on Bulgarian territory. The technical design has obtained an approval by the Ministry of Regional Development and Public Works. The procedures for establishment of real rights over the properties affected by construction have been completed- title or unlimited construction rights for site and above-ground installations and easement rights for the linear part of the gas pipeline. In September 2017 a construction permit for the section on Bulgarian territory was issued by the Ministry of Regional Development and Public Works.
As part of the procedure for ‘temporary exemption’ within the Market test held, 1.57 bcm/year of various duration have been booked by 5 participants, one of which is Bulgargaz EAD, in connection with performance of a Contract for natural gas supply for 1 bcm/year for 25 years from the 2nd phase of the Shah Deniz field in Azerbaijan.
The project has completed a procedure for 'temporary exemption’ from obligations for regulated access in the meaning of art. 36 of Directive 2009/73 before the national regulatory authorities in Bulgaria and Greece, EWRC and RAE respectively. In July 2018 the European Commission approved the conditions for granting a 'temporary exemption’ regime for the IGB gas pipeline. In August 2018 the regulatory authorities for energy in Bulgaria and Greece, EWRC and RAE, issued a final Joint decision for granting a 'temporary exemption’ regime. For a period of 25 years the Decision grants:
Pursuant to a decision of the European Commission, EU budget financing (European Energy Program for Recovery) has been approved for the project at the amount of up to EUR 45 million based on an advance payment with a provision of a financial guarantee.
With respect to financing of the project, actions have been taken to attract grants from the European Structural and Investment Funds (ESIF), too. The minimum amount of grant financing from OPIC amounts to EUR 39 million for which a Grant contract has been concluded.
The European Investment Bank (EIB) has declared its readiness to provide loan financing for the project at the amount of EUR 110 million with a security in the form of a state financial guarantee since IGB has a confirmed status as a Project of Common Interest (PCI) in EU and a status of a priority project in EC initiative for gas interconnectivity in Central and Southeastern Europe (CESEC).
The investment company ICGB AD has held the following competitive procedures pursuant to PPA (Public Procurement Act) in connection with implementing the construction phase and has selected contractors for:
In connection with the requirements of the Exemption decision pursuant to art. 36 of Directive 2009/73, the regulatory authorities EWRC and RAE shall have to approve the drafts of a Tariff code and a Network code of IGB gas pipeline and the long-term transmission contracts based on the Advance Reservation Capacity Agreements concluded in the Market test. ICGB AD will launch a procedure for certification of the company as an independent gas transmission system operator under the ITO model set out in Directive 2009/73 with a view to issuing decisions for certification by the energy regulators before the commercial operation date.