The European Commission said on November 8 that it has found Bulgarian and Greek plans to support the construction and operation of a 182 kilometres cross-border gas interconnector (IGB) between Greece (Komotini) and Bulgaria (Stara Zagora) to be in line with EU State aid rules.
Greece’s Energy Minister Giorgos Stathakis hailed the European Commission’s decision on November 7 that the plans to support the construction of IGB are in line with EU State aid rules. “The decision paves the way for the beginning of construction of IGB. The vertical interconnector diversifies the energy sources since it can transport natural gas from TAP (Trans Adriatic Pipeline) as well as LNG lLiquefied natural gas) from the LNG terminals of Revithoussa and Alexandroupolis,” he said, adding that the IGB is a strategic project that makes Greece a strategic energy hub in southeast Europe and an energy gate to Europe, contributing to the EU Energy Union.
EU Competition Policy Commissioner Margrethe Vestager said the new gas interconnector between Greece and Bulgaria would increase the security of energy supply and enhance competition, to the benefit of citizens in the region. “We have approved the support measures to be granted by Bulgaria and Greece because they are limited to what is necessary to make the project happen and therefore are in line with our State aid rules,” Vestager said.
IGB will be owned by ICGB AD, a 50-50 joint venture between the IGI Poseidon consortium (which includes Edison of Italy and Greek gas incumbent DEPA) and BEH, the Bulgarian gas incumbent.
Investment amount to €240 million
According to the Commission, the total investment cost for the IGB interconnector, which is designed to transport 3 billion cubic meters per year of natural gas from Greece to Bulgaria by 2021, amounts to €240 million.
According to the Commission, Bulgaria and Greece notified to the EC certain support measures to ICGB AD, which involve State aid within the meaning of EU State aid rules, namely: an unconditional state guarantee to be granted by the Bulgarian State to cover a €110 million loan that ICGB AD will receive from the European Investment bank; a €39 million direct financial contribution by Bulgaria via the Bulgarian Operational Programme “Innovation and Competitiveness” 2014-2020; (OPIC) and a fixed corporate tax regime that will apply to ICGB AD for 25 years from the start of commercial operations and will be governed by an intergovernmental agreement between Bulgaria and Greece.
The Commission said the EC assessed these measures under EU State aid rules, in particular its 2014 Guidelines on State Aid for Environmental Protection and Energy and concluded that the measures are in line with EU State aid rules and will contribute to the objectives of security of supply, diversification of energy sources and increased competition in EU energy markets.
Greece as an energy hub
In a speech this week, US Ambassador to Greece Geoffrey Pyatt hailed “several significant announcements on energy relating to the Floating Storage Regasification Unit (FSRU) in Alexandroupolis, government plans to import US LNG into Greece, and progress on offshore exploration”.
Pyatt noted Greece’s potential as a regional energy hub. “The TAP pipeline is now 85% complete in Greece. It is on track to start commissioning next year and to begin deliveries in 2020. The TAP project was made possible through the close cooperation that the TAP consortium had over many years with multiple configurations of Greek national and local governments to constructively and patiently address construction challenges,” he said. “It is also worth noting that TAP is the final leg of the more than $40 billion Southern Gas Corridor – one of the world’s most complex and important gas infrastructure projects – which has been supported by multiple US administrations and for many many years,” He added.
LNG in southeast Europe
Turning to the Revithoussa LNG terminal, Pyatt said the massive, new storage tank would be completed in the next few weeks. “The upgrades will increase storage capacity by 70 percent and delivery capacity by 40 percent, allowing the facility to supply more than seven billion cubic meters per annum,” he said. “This expansion makes it economically feasible for large ships to offload LNG in an efficient manner. More importantly, it serves as an important hedge for both Greece and the broader region – like energy ‘shock absorber’ if you will, for southeast Europe,” Pyatt added.
According to the US Ambassador, both TAP and the LNG terminals serve as a gateway for gas to the wider Balkan region, either through existing infrastructure that is not being fully utilized or through new projects.