Specific Objective

Implementation of projects for gas interconnection Bulgaria-Serbia ensuring the increase of the security and diversification of natural gas supplies for Bulgaria. 

Operation rationale

Bulgaria continuously conducts a long-term policy aiming  at  implementation of new strategic energy projects on the territory of the country.  It  has transposed in the national legislation Directive of the Council 2004/67/EC, concerning  measures for  security of natural gas supplies and practically implements the instruments for achieving security of gas supplies as listed in the annex of the Directive, as well as other measures aiming at increasing  the security, continuity and quality of the services – gas supply and transportation through the gas transmission and gas distribution networks.    

At the same time, security of supplies is among the priority areas of EU in the energy sector, for  its physical  implementation  there is a need for construction of effective interconnections between the gas networks of the member states. In the Second Strategic Energy Review, proposed by the European Commission in November 2008, the importance of infrastructural development is clearly underlined, as it is pointed out that it is of significant importance for the energy needs of EU. In this respect, the European Commission proposed one of the six priority infrastructure activities  of the Community to be the development of transmission interconnections for natural gas and electricity  along north-south axis in Central and Southeast Europe.    

After the proposals of  the Commission in the Second Strategic Energy Review and their approval by the Energy Council in January 2009, by the European Parliament and by the spring European Council, the Commission developed new rules for increasing the gas supplies security in the internal gas market framework. The proposal for Regulation of the European Parliament and of the Council concerning measures for  security of natural gas supplies and for  repealing  Directive 2004/67/EC presented in July 2009 is under discussions in the Working Party on Energy at the Council of EU. One of the basic elements of the proposal is the use of the principle “n-1” (the collapse of the biggest gas transmission infrastructure/source) as a measure of what the member  states could compensate for in case of such a collapse. The risks for the energy supplies security in Bulgaria are based on the dependence of the country on natural gas and  crude oil import, which at present is practically  total and is traditionally oriented towards the Russian Federation.  At the same time Bulgaria has a strategic geographic location, which gives significant advantages of the country for diversification of the natural gas supply sources and routes.   The existing risks for the security can be managed through diversity of the energy resources types, sources, suppliers and routes, taking into account the regional and global energy markets tendencies. From this point of view, the energy supplies diversification will contribute to  creation of competition  among the  main energy suppliers and to stabilising  the primary energy resource prices. The  enhanced partnership and cooperation in the energy sector is a key precondition for securing the balance of  demand and supply   under clear and sustainable rules.

The situation of  natural gas supplies  for Bulgaria at present is characterised by  lack of the necessary infrastructure – gas interconnections and terminals for liquified natural gas (LNG) import through which alternative natural gas supplies for the country can be realised. In this regard, as a necessary element of complex measures for long-term security of supplies  for the country, as well as a mechanism which will contribute to achieving a more flexible reaction in crisis situations, it is foreseen to implement several projects in the gas sector.

The implementation of these projects will ensure the increase of the natural gas supply reliability for the country as a whole as well as for the regions on the territory of which the projects will be located, which would practically increase additionally the available natural gas  volumes and will  create the possibility for  supplies to households and industries through the construction of the necessary local gas distribution infrastructure.    

Bulgaria lags considerably behind in the development of gas distribution networks and household gasification not only compared to the EU countries but also compared to the neighbouring countries and the countries the South-eastern part of Europe. Gas supplies shortages often appear as reason for reducing the investors’ interest and for hindering the economic development of the areas concerned. Furthermore the remoteness of part of the municipalities from the available transmission capacities and the need of large investments in the construction of distribution branches are one of the reasons for which these areas were not included in the Inventory of Self-contained Areas for natural gas distribution on the territory of the country. Thus the construction and the development of the gas interconnection pipelines will support the future development of these areas. These investments are to create more favourable and competitive business environment and will decrease the energy consumption not only of the economic sector, but also of the households.  Investments in gasification are supposed to have the following economic effects.

Also the use of natural gas will significantly limit the demand for wood for heating that will result subsequently in decrease of the uncontrolled felling in the forests.

The project for gas interconnection Bulgaria-Serbia will ensure diversification of the natural gas supplies for Bulgaria, through realization of a connection with the capital city of Serbia – Belgrade and the northern part of Serbia, which are connected to Hungarian gas pipeline. By the construction of interconnection with the Serbian system, Bulgaria will have access to the gas network of Hungary and through that to the networks of the countries in Central and Western Europe with possibility for natural gas supply from North Sea. In addition, there is a possibility in the near future for import to Bulgaria of Hungarian natural gas for  produced in Mako gas field. The implementation of the gas interconnection Bulgaria-Serbia is part of the Southern gas corridor concept.

The gas pipeline route will be: Sofia-Dimitrovgrad-Nis, which will connect the gas transmission network, and will allow natural gas supply for Bulgaria through Serbia from the gas transmission system of EU and from natural gas suppliers alternative to Russia. The purpose is to maintain future natural gas supplies through Serbia for Bulgaria and other West Balkans countries using the planned new gas interconnections with Turkey, Greece and Nabucco gas pipeline.

The project will contribute to:

• Development of the trans-border cooperation Bulgaria-Serbia, realization of direct connection of the markets of four member states – Bulgaria, Romania, Greece and Hungary with the gas markets of the rest of the countries in South-Eastern Europe;
• Diversification of the natural gas sources for Bulgaria and of the markets and import, increased access to alternative suppliers and decrease of the dependence on a single  source;
• Increased flexibility for balancing by the operator of the country and region transmission system, as well as extended access to regional underground  gas storages and possibilities for securing the further increase in the natural gas usage; 
• Meeting the “n-1” gas infrastructure standard;
• Opening working positions and support of the economical recovery in the period after the recession;
• Short-term step to the  development of the Southern gas corridor;
• Decrease of the energy intensity of the economy by means of creating possibilities for substitution of electricity for heating purposes by natural gas;
• The use of natural gas as an effective substitute of electricity will contribute to the implemenattion of the environmental commitments and the reduction of the greenhouse gases emissions as per the Kyoto commitments as the presently used energy resources (fuel oil, coal, fire woods) have poor ecologic indicators and thus the substitution with natural gas and renewable energy sources will have positive effect in reduction of the CO₂, sulphur dioxide, NO_x,  and dust emissions;
• Increasing the role of Bulgaria as an energy centre of South-Eastern Europe and the leading position in the Energy Community, as well as increased geopolitical weight of the country.  

List of indicative activities to be supported

• Construction of gas pipelines
• Technical and feasibility studies, projects technical support – feasibility study, EIA, technical design. 

The operation will support investment connected to the preparation and implementation of gas transport infrastructure. The operation will focus on construction of gas interconnection pipeline Bulgaria-Serbia .

Beneficiary

Ministry of Economy, Energy and Tourism

Last modified: Wednesday, September 14, 2011 3:20 PM