Progress made on IGB project cost division, a cause of delay

Details concerning how construction costs for the prospective Greek-Bulgarian IGB pipeline will be divided between participating sides are delaying the delivery of a finalized investment plan for the project, but progress has been made, according to sources.

In addition, issues concerning the quantities of natural gas amounts to be transmitted through the pipeline remain unresolved, as was noted yesterday by energy minister Panos Skourletis, who took part in a three-way meeting in Athens with Bulgarian peer Temenuzhka Petkova and Amos Hochstein, US Special Envoy and Coordinator for International Energy Affairs.

Sources noted that significant progress was achieved, at the meeting, on the bilateral project’s cost division. At this stage, it appears that common ground has been reached. However, this remains to be confirmed next week, when a follow-up meeting is scheduled to take place in Sofia. Developments on negotiations concerning gas quantities to be transmitted through the IGB pipeline are also expected.

The construction cost and gas quantity issues dominated yesterday’s three-way talks, which also involved the participation of investors. The IGB project has been taken on by ICGB, a 50-50 joint venture involving Poseidon (DEPA, the Public Gas Corporation, and Edison) and Bulgarian state-run company BEH. The Greek side was represented by DEPA at yesterday’s meeting.

Negotiations have failed to make progress over the past year, but yesterday’s meeting indicated that a finalized investment plan is near.

Hochstein, the US international energy affairs envoy, is strongly supporting the project’s development, which is expected to boost energy security in the region by providing the wider eastern Balkan region with access to new gas sources, besides Russia.

IGB will be connected to the Azeri-linked TAP (Trans Adriatic Pipeline) and help diversify the region’s supply sources, as Hochstein has repeatedly pointed out. Besides offering Bulgaria, and possibly Romania, the ability to receive Azeri gas via the TAP project, the IGB pipeline also promises to offer access to Greece’s LNG terminal in Revythoussa, an islet in the Saronic Gulf, close to Athens, as well as prospective LNG stations in northern Greece, if this plan is developed.