Turkey, Bulgaria hard at work on gas project

The gas operators Bulgaria's Bulgartransgaz and Turkey's BOTAS will hold meetings as soon as possible to speed up progress for the Turkey-Bulgaria Gas Interconnection Project "ITB", Nadezhda Neynsky, Bulgaria's ambassador to Turkey told Anadolu Agency on Monday.

Neynsky said Bulgaria attaches great importance to the development of Bulgarian-Turkish relations and sees further potential for cooperation, particularly in the energy sector.

A delegation headed by the Turkish Minister of Energy and Natural Resources Berat Albayrak on a visit to Sofia on Sept. 7 discussed bilateral energy cooperation with Bulgarian Prime Minister Boyko Borisov and Energy Minister Temenuzhka Petkova.

"Both sides agreed to intensify cooperation in the field of gas and electricity. In this regard, the gas operators Bulgartransgaz and BOTAS as well as electricity operators ESO and TEIAS will hold bilateral meetings as soon as possible," the Bulgarian ambassador explained.

Bulgartransgaz and BOTAS are working on the realization of a joint Turkey-Bulgaria Gas Interconnection Project "ITB", for which Bulgartransgaz has prepared a feasibility study for the Bulgarian territory co-funded by the EU under the CEF mechanism (Connecting Europe Facility), Neynsky said.

"This feasibility study was sent to the Turkish side and BOTAS' position in response is expected," Neynsky noted.

Bulgaria is paying special attention to this project, which ensures the development of reversible interconnections of gas transmission networks of Bulgartransgaz and BOTAS. The project is an opportunity to allow for the diversification of natural gas sources, the supply to both partners and routes, and greater competition while enhancing the security of supply in the region, the ambassador declared.

"As part of the priority Southern Gas Corridor, the project is key to the security and diversification of sources and routes for the supply of natural gas to and through Bulgaria and the southeast Europe region. The ITB can provide access to all current and future entry points and sources in Turkey, gas from Azerbaijan and other natural gas as well as LNG spot supplies from existing terminals in Turkey," she added.

For realization of the project, on March 12, 2014, a Memorandum of Understanding for the construction of the ITB interconnection gas interconnection was signed between the Bulgarian Ministry of Economy, Energy and Tourism and the Turkish Ministry of Energy and Natural Resources. Subsequently, the MoU was put into force on March 28 and a Joint Working Group composed of experts from the companies involved in the implementation of the project was set up.

- Electricity

Meanwhile, electricity operators Bulgaria's ESO and Turkey's TEIAS are in discussions to increase electricity transmission capacity between the two countries. Turkey declared its interest in extending such capacity during the meetings in Sofia, according to the Bulgarian ambassador.

In March 2015, when Turkey experienced problems with its power system, Bulgaria's ESO came to the rescue. ESO made the greatest contribution in assisting Turkey, compared to its neighbors, in the restoration of the power system by providing significant emergency power assistance from Bulgaria to Turkey.

"There are currently two power interconnections, which have the potential to significantly develop more transmission capacity than currently announced. Considering this, both parties' efforts will be directed to fully exploit the significant transfer capacity of the existing interconnections between the two countries," she asserted.

- 'Balkan' gas distribution center

Neynsky shared that Bulgaria has ambitions to become a natural gas hub with the development of a joint project with the European Commission for the construction of a European gas distribution center "Balkan." This project will fully meet the requirements of the EU energy legislation and is included in the list of projects of common European interest (PCI).

Natural gas deliveries to the "Balkan" gas distribution center could be sourced from Azerbaijan, Romania, with local extraction from the Black Sea shelf and Russia. However, she said that "other points of entry from Turkey could also be considered." meaning that the TurkStream natural gas pipeline project, planned to carry Russian gas to southern and southeastern Europe could not be ruled out for inclusion.

Evidently proud of the role that the Bulgarian gas transmission system plays, she considered it the "best developed" in the region, adding that for almost three decades the country ensured the reliable transfer of Russian gas to Turkey, Greece and Macedonia.

"Over 80 percent of the compressor stations in the region are concentrated in Bulgaria, and most of them have recently been upgraded and modernized, with new compressors being installed, which could also operate in reverse mode," she explained.

The modernization and expansion of the Bulgarian gas transmission network are ongoing, Neynsly said, adding that after the construction of a 20-kilometer gas pipeline from the Lozenets to Nedyalsko compressor stations, the transit capacity from Bulgaria to Turkey will be increased allowing for the possibility of reverse deliveries from Turkey to Bulgaria.

"Through TANAP [Trans-Anatolian Natural Gas Pipeline], TAP [Trans Adriatic Pipeline] and the Greece-Bulgaria Gas Interconnector [IGB], we expect to receive 1 billion cubic meters per year of natural gas from the second phase of the 'Shah Deniz' field in Azerbaijan. Also, after developing new gas fields in Azerbaijan, we expect further volumes of Azeri natural gas through Turkey for Bulgaria and through our country for the region," she said.

She stressed that the "Balkan" gas distribution center will rely on volumes of Azeri natural gas from the Southern gas corridor via TANAP and Turkey and she expects that volumes from Iran, Israel, Turkmenistan and other countries through Turkey could also be feasible.

"In this respect, the Bulgarian gas transmission system, through the implementation of the Balkan regional gas distribution project and the project for the expansion of the Chiren UGS (underground gas storage in Chiren, operated by Bulgartransgaz), will ensure transit to southeast Europe and storage of the respective volumes of natural gas from Turkey," she noted.

A pre-feasibility study for the "Balkan" gas distribution center, which is scheduled to be completed in the second half of 2018, is due to be carried out, Neynsky added.

- Economic and trade relations

Neynsky underlined that Turkey is an "extremely important partner" for ensuring the security of energy supplies for Bulgaria, the southeast Europe region and Europe, adding that due to its geographical location, Turkey has served as a natural bridge between producer countries and oil and gas consuming countries.

"Turkey has established itself as an important country through the diversification of supply routes that helps energy security, according to the Bulgarian ambassador.

"From the point of view of energy security, the energy streams passing through Turkey are essential as 3.7 percent of the world's oil consumption flows through the Republic of Turkey," she explained.

For the first half of 2017, Bulgarian total exports to Turkey amounted to around €1.1 billion, and compared to the same period of 2016 are rising by 16.5 percent. Bulgarian imports from Turkey were around €925 million and compared to the same period of 2016 are rising by 23.4 percent, the ambassador said.

"The total volume of the trade between our countries is around €2.025 billion. It is worth noting that for the first half of 2016 this volume was around €1.7 billion. We are witnessing a significant rise in foreign trade with Turkey and one of the major reasons for that is the positive economic developments in both our countries this year," she explained.

The ambassador considers that trade between Bulgaria and Turkey is relatively balanced, and in this regard, she said, "we believe there is big potential for further development of economic and trade cooperation with Turkey. In addition, Bulgaria is very much interested in attracting more Turkish investors and investments.

As close neighbors, she said that she envisages the best trading possibilities for Bulgaria and Turkey are in the energy, tourism, IT, healthcare, pharmaceutical, agricultural, automotive, logistics, electronics, transport and IT sectors.