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Electricity price hiccups over the last two months seemed timely to attest the required price assumptions for the financial model of the Belene NPP. These days, prices have returned to normal levels, but the idea of higher electricity prices, at par with revenue projections, gained some ground – ostensibly the free market at work. There is a lot in common between the procedural patterns behind the Belene NPP and the Balkan Gas Hub. Most of the activities only nominally happen in the open – formal tender procedure, the rite observed, the end – terms agreed in advance. There is no true competition, no market interplay, no real public scrutiny, just political expediency. Summarizing the main features of the applied policy line in pursuit of a lighter version
Bulgartransgaz has recently been informed by its largest customer, Gazexport, that after 2020 it will terminate the transit of Russian gas through Ukraine, and thereby, through the Trans-Balkan gas pipeline to Turkey, Greece and Macedonia. It is still unclear whether the notification qualifies under contractual terms as legal notice served, requiring a new contract for any further arrangement, or whether it should be interpreted as advance notice for a shift of delivery point, with future gas deliveries coming via the Turkish Stream-2 pipeline. As for the quantities for use in Bulgaria itself, Bulgargas would not have a major problem, provided it can add additional delivery points in Slovakia and elsewhere. In total, the transited annual volumes over the last 12 years have varied around 16-17 billion cubic
There is nothing kept secret that will not come to light. reads the Bible. While in Moscow, Borisov and Putin agreed that Bulgaria should oppose the granting of extended powers to the European Commission to represent the Union in the legal and regulatory battle over the new infrastructure projects of Gazprom – Nord Stream -2 and the extension of Turkish Stream on EU territory. The Bulgarian media overflow with superfluous analogies made to accommodate the political expediency of politicians betting on the Turkish and Nord Streams. Germany claims to have been trying to justify engagement with Nord Stream – 2 on business grounds. The analogy goes that Sofia could join in Germany’s brokerage gas affair with Russia – a sheer fallacy, typical for politicians that defy market gravity, believing in the omnipotence of politician’s
The need to move beyond the Balkan Gas Hub “Russia-only” or “Russia-mainly” paradigm seems indispensable if the ‘hub’ project – in the broad sense – has any chance. The talk of billions of cubic meters of natural gas from non-Russian sources deserves a serious look to the north, but mostly to the south – The Southern Gas Corridor. Yet what seems logical to everyone, does not inspire the management of the TSO of the Bulgarian gas system. The fact that none of these routes – TANAP, TAP or the Greek-Bulgaria Interconnector – contain specific numbers for potential gas flows makes things seem pre-ordained. The BGH essentially seems to be conceived as a redistribution center for Russian gas. The likelihood of non-Russian gas emerging both at the
Quod licet Jovi, non licet bovi. The Balkan gas hub has become synonymous and in many ways a substitute for Bulgaria’s energy policy in the field of natural gas. In order to avoid speculating about the concept’s different variations, hereinafter is the official project draft, as presented by the national TSO, Bulgartransgaz, with a price tag above USD 2 billion. Although this might not be the latest update, as it does not fully accommodate developments from Turkish Stream, the map is a fine departure point for an analytical exercise, explicitly demonstrating the virtues and the shortcomings in the conceptual design and implementation phase. The key question is – what does Bulgaria strive to achieve? To begin with, the country’s energy policies should not
Two events overshadowed the geopolitical landscape on the eve of President Trump’s visit to Poland to attend the Three Seas Initiative Summit. The TSIS is a joint Polish-Croatian project, launched in 2016, with the aim of strengthening trade, infrastructure, energy and political cooperation among countries bordering the Adriatic, the Baltic and the Black seas. Twelve countries are members: Poland, Hungary, Czech Republic, Slovakia, Romania, Bulgaria, Lithuania, Estonia, Latvia, Croatia, Slovenia and Austria. The fact that the American President will preach the case to CEE leaders for US LNG imports comes as no surprise, yet there is a hidden context and a more complex backdrop against which both the expectations and the deliverables of the visit should be judged. The Case for US LNG gas Washington has
Following President Putin’s trip to Turkey and a sequence of publicity stunts, some of them jointly with President Erdogan, it has become clear that the Russian leader is engaging in another game of poker politics in a desperate attempt to make headlines, impress the international audience and sell more gas to Europe, bypassing EU directives and concurrently Ukraine. Although most of his plan is a deja vu, the decision to proceed with the intergovernmental agreement on Turkish stream and start maneuvers on the gas front from Istanbul contains a piece of novelty. Most of the background remains the same – intentions, plans for the future, verbal rather than real streams – but the new moments are worth noting. Russia has changed several key elements in its approach to the ‘streams’ issue.
I have always thought that awareness is the foundation of good management practice. However, information in the form of news and analysis is not automatically converted into good findings and hence into good practical and optimal solutions. Unfortunately, in our country, what prevails is the inertia of “stability” understood as status quo reproducing itself, with the lack of analysis of costs and benefits and proactive management on a public and corporate level, rather than the employment of catching-up and breakthrough policies. Let’s try and read through the news from last week that we cover in our newsletter. The first item is that margins in processing costs between refineries in America and Europe and the rest of the world have decreased. Markets globalize and integrate. The second is
Have a chance new megaprojects in gas supplies to Europe? Gas processing is an instrumental piece of the natural gas value chain. It is instrumental in ensuring that the natural gas intended for use is as clean and pure as possible, making it the clean burning and environmentally sound energy choice. Once the natural gas has been fully processed, and is ready to be consumed, it must be transported from those areas that produce natural gas, to those areas that require it. The efficient and effective movement of natural gas from producing regions to consumption regions requires an extensive and elaborate transportation system. In many instances, natural gas produced from a particular well will have to travel a great distance to reach its point of use. The transportation system