Eadaily.com: Bulgaria starts building Turkish Stream in reverse order

INFORMATION / DISINFORMATION / BA COMMENT 


Eadaily.com: Bulgaria starts building Turkish Stream in reverse order

 

The construction of the compressor stations for the gas pipeline, extension of Turkish Stream, has begun in Bulgaria, while the construction of the pipeline itself has not yet begun due to court proceeding.

Bulgartransgaz announced the start of construction of two compressor stations, Rasovo and Nova Provadia, which will allow 12 billion cubic meters of Russian gas to be transported to Europe annually.

This project is the second phase of the pipeline construction and should be completed next year. “The construction of (compressor stations) will increase pressure along the entire infrastructure route from the Turkish-Bulgarian border to the Bulgarian-Serbian border, which is part of the Balkan Stream concept for the creation of the Balkan Hub in Bulgaria.

The expansion of the infrastructure will enhance the security of gas supplies from different sources and create the conditions for increased competition in the market, “Bulgartransgaz said in a statement dedicated to the contract with the DZZD FERROSTAAL BALKANGAZ consortium.

It consists of the Bulgarian companies Glavbolgarstroy, Glavbolgarstroy International and the German company FERROSTAAL INDUSTRIEANLAGEN GMBH. The first has for many years been actively engaged in the construction of gas infrastructure facilities in the country, while the second brings together large international companies that design and build energy infrastructure facilities. The consortium proposed the construction of the compressor stations for $ 196 million and won the competition because of lowest price.

“The signing of the contract brings us closer to the implementation of Bulgaria’s updated energy strategy,” Energy Minister Temenuzhka Petkova said, and Bulgartransgaz CEO Vladimir Malinov said foreign companies’ participation guarantees the project’s timely implementation.

However, this cannot be said for the construction of the gas pipeline itself – the continuation of the Turkish Stream in Bulgaria with a length of 474 kilometers. According to the original plans, its construction should have been completed. However, this has not happened so far. At least neither Bulgartransgaz, nor the general contractor, the Arcade consortium, have reported on this. EADaily’s questions were not answered either.

In April the little-known Saudi consortium Arcad was picked as the general contractor for the construction of the gas pipeline to the Bulgarian-Serbian border. It proposed constructing the extension of the Turkish Stream for the lowest price of EUR 1.1 billion in 615 days.

However, Arkad failed to submit documents on time and Bulgartransgaz replaced the Saudis with the Gas Extension and Development Consortium in Bulgaria, consisting of reputable Italian and German companies and a Luxembourg-based company affiliated with the Russian Pipe Metallurgical Company.

However, Arkad challenged the decision of the operator of the Bulgarian GTS in the Commission for Protection of Competition, and “Gas Expansion and Development in Bulgaria”, responded with a complaint before the Supreme Administrative Court. The case was due for examination in October, but in September the Italian-German-Luxembourg consortium unexpectedly withdrew the complaint and the Saudi Arkad was declared as the winner of a tender to build a Turkish Stream extension in Bulgaria. It promised to build the first stretch of 308 kilometers in 250 days and thus the first deliveries of Russian gas through Bulgaria to Serbia and further to Hungary and Austria will start no earlier than mid-next year.

As already reported by EADaily, by the end of this year the Turkish Stream gas pipeline, which passes through the Black Sea, will be put into operation. It consists of two lines with a capacity of 15.75 billion cubic meters annually. One line is for gas supplies to Turkey, the second to Europe through Bulgaria. The launch of a bypass pipeline will completely eliminate the need for transit of Russian blue fuel through Ukraine along the Balkan route.

 

 

 

BA Comment 

 

Fact checking of the story – there is still no agreement between Turkish and Russian counterparts on the Turk Stream onshore operation, which makes claims that Gazprom gas will flow rather premature.  A strong indicator is the growing willingness of Russia to extend transit arrangements with Ukraine for the coming season.

The not so well-disguised irony of the Russian edition reveals Bulgartransgaz’s haste on the project. In fact, the Russian side has again chosen a position from which it cannot but win. If, as it seems, there will be a delay, it benefits from penalties / do not believe in assurances that there can be a contract without penalties /, and then again the Bulgarian side will try to catch up being in vulnerable position, because the accumulated-by-then debt will have to be repaid by BTG and the proceeds will depend on Gazexport.