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    A bar meter of pipelines of natural gas is pictured at the GreeK-Bulgarian borders in Promahonas, northern Greece

    Russia's Gazprom May End Up the Winner of Bulgarian Gas Hub Project

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    Representatives of the world’s leading energy companies are meeting in Varna on September 4-5 to discuss the concept of the “Balkan” gas distribution center in Bulgaria, Deutsche Welle reported.

    The list of participants includes BP, RWE, OMV, SOCAR,Texas Cherniere Energy, Gazprom and a number of European Commission representatives.

    About the project

    The idea to build a gas hub near Varna initially came up during an international energy forum in Sofia in February 2015.

    The project will make Bulgaria the largest such hub in southeastern and central Europe and will diversify energy supplies to Europe with gas from Russia, Azerbaijan and Turkmenistan, and also from local and Romanian fields, to reach Western Europe via a ramified system of pipelines.

    The project is expected to cost about 2 billion euros.

    Where will the gas come from?

    Just where the gas will be coming to the Balkan hub and in what quantities will top the agenda of the Varna meeting. Last month Bulgarian Prime Minister Boiko Borisov said that they will not be able to make do without Russian supplies.

    “This means that the Bulgarians hope that Gazprom will lay a pipe to southern Europe,” Igor Yushkov, a professor at the Moscow Finance Institute said, adding that the initiators of the Balkan project apparently realized that Azerbaijan will not be able to supply as much gas as expected.

    “Azerbaijan has already been contracted to supply 20 billion cubic meters to Europe,” Yushkov continued, adding that other supply options were either too expensive or just not enough.

    Bulgaria and Turkey to compete for Gazprom’s pipe?

    The second leg can completely make up for the gas Turkey now receives across Ukrainian territory, and Bulgaria will have to work hard for the first one, Yushkov noted, adding that here Russia’s Gazprom could end up the winner as  several countries are already vying for its project.

    This means that the creation of a gas hub near Varna would benefit Russia, Bulgaria and other EU countries, but not Ukraine.

    Supplier remains the same

    Mikhail Krutikhin, an expert with RusEnergy consultants, disagreed with Yushkov, arguing that the Bulgarians could easily replace Russian gas with one from Azerbaijan after a 180km gas pipeline connecting Stara Zagora with Comotini in Greece goes on-stream.

    As for other EU countries, he added, they are not interested in getting Russian gas via the Bulgarian hub because this would mean diversifying supply routes instead of diversifying suppliers.

    “Gazprom would like to pump its gas to Italy, but the Italians too can replace Russian gas with liquefied gas supplies and with natural gas from the Caspian region that will start coming in in 2020,” he noted.

    Sofia put forward the Varna gas hub project after Moscow canceled the South Stream gas pipeline, intended to traverse the Black Sea to deliver Russian natural gas through Bulgaria, Serbia, Hungary and Slovenia to Italy and Austria, in late 2014.

    Related:

    Bulgaria May Use Assets of Halted South Stream to Build Domestic Gas Hub
    Bulgaria, Russia to Discuss Varna Gas Hub Construction - Sofia
    Tags:
    European Union, gas hub, problems, pipelines, benefits, discussion, Texas Cherniere Energy, OMV, European Commission, Gazprom, SOCAR, RWE, BP, Boiko Borisov, Bulgaria
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