On 12 June 2018, the EU Commission in Brussels was presented with the interim report on the Feasibility Study for the Balkan Gas Hub (“Project”).
The report covers all matters related to the Project's potential realisation, including:
- possible supply sources and markets;
- available infrastructure and future infrastructure;
- activities necessary to implement the project, including pipeline routing;
- options for financing including tariff estimation; and
- the timing for the development of the project.
The report emphasises the fact that the gas hub is expected to connect with all of gas supply projects in southeast Europe. It also covers the steps that need to be done both to implement the project and the principles of the EU Third Energy Package, which include:
- interconnection agreements with TSO’s from Turkey, Macedonia and Serbia during the preparation phase;
- the general switch to energy units for DSO and storage contracts;
- amending rules for access and the tariff model for Chiren gas storage;
- introducing and developing a trading platform and gas exchange; and
- designing a single virtual trading point, which connects all transmission routes.
The report recommends that the Project be financed through equity, debt and grants. The results show that the most efficient financial structure consists of 90% debt and 10% equity.
Four possible ownership structures for the Project are reviewed, and include the following options: wholly owned by Bulgartransgaz EAD; operated by Bulgartransgaz EAD; held by a joint stock company where the majority shareholder is Bulgartransgaz EAD; and a PPP structure.
The full text of the report can be viewed here
The Final Report on the Project's feasibility will be presented in September at an event in Varna, Bulgaria.
For more information on this interim report and the Balkan gas hub, please contact Kostadin Sirleshtov and Denitsa Dudevska.