The Vertical Gas Corridor concept implementation start is enabled by two contracts signed in Sofia, Bulgaria.
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Two contracts that will mark the start of the implementation of the Vertical Gas Corridor concept were signed at the Council of Ministers in Sofia on Thursday.
The contracts were signed between Bulgartransgaz EAD and the two contractors HILL International - GBS 1 and HILL International - GBS 3, both of which are consortiums involving Bulgarian and US companies.
The Vertical Gas Corridor is a strategic initiative of the gas transmission operators of Bulgaria, Greece, Romania, Hungary, Slovakia, Ukraine and Moldova aimed at diversification and improving security of supply by transporting additional quantities of natural gas from south to north.
The signing of the documents allows the start of the spatial design and construction of part of the necessary gas transmission infrastructure - the loopings from Kulata to Kresna and from Rupcha to Vetrino - which will increase the capacity for the transmission of natural gas from Greece to Bulgaria and from Bulgaria to Romania.
During the signing ceremony, caretaker Prime Minister Dimitar Glavchev said that after the completion of the activities the Bulgarian gas transmission infrastructure will be able to supply additional quantities of liquified natural gas from reliable sources, including the US, Azerbaijan, and Egypt.
Caretaker Energy Minister Vladimir Malinov said that the Vertical Gas Corridor would not only be a strategic initiative with significance for the whole region but also a tool to ensure energy security in a wider region.
He was convinced that cooperation between US and Bulgarian companies would result in the timely and quality implementation of many projects.
Malinov said that he would do his best to make sure that the project is implemented ahead of schedule by the end of next year.
He noted that the total value of the two contracts is some BGN 485 million, which will be used to increase entry capacity from Greece to Bulgaria and exit capacity from Bulgaria to Romania.
In the Minister’s words, this will allow for a significant increase in LNG quantities from the US and other producers, as well as from the Southern Gas Corridor, thus providing additional security.
The first part of the financing will be secured by Bulgarian Energy Holding increasing Bulgartransgaz's capital, Malinov said.
He added that the government had agreed that the relevant state guarantees will be provided for in the State Budget Act, which will enable Bulgartransgaz to negotiate with international financial and banking institutions to secure the rest of the financing.
Malinov said that the commissioning of these projects will also enable the fulfilment of Ukraine’s commitment to stop the transit of Russian natural gas through its territory. This, in turn, will enable the Vertical Gas Corridor to become a real alternative for natural gas supply, Malinov said.
He was confident that all the countries along the route - Bulgaria, Greece, Romania, Hungary, Slovakia, and Moldova - will guarantee energy security through diversified supplies in the long term.
Bulgartransgaz Executive Director Kiril Ravnachki said that this strategic initiative between the gas operators of Bulgaria, Greece, Romania, Hungary, Slovakia, and Moldova aims to provide access to diverse and reliable sources through an efficient and secure route.
The role of each gas operator is to ensure maximum opportunity for diversification and energy security by investing in infrastructure expansion. This is also the principle underpinning the Vertical Gas Corridor, Ravnachki added.
Kalin Peshov, Glavbolgarstroy Management Board Chair, said that the contractor group is made up of "a unique constellation of international American companies," adding that Glavbolgarstroy will partner with US companies HILL International, CRC Evans, Emerson, Honeywell, and Ensol VM.
The US Deputy Ambassador to Bulgaria, Andrea Brouillette-Rodriguez, described the move as a step towards regional security. In her words, the Vertical Gas Corridor is an excellent example of regional cooperation.
Ukraine's Ambassador to Bulgaria Olesya Ilashchuk said that the purpose of the project is to connect the main gas transmission pipelines from the south to the north. She was confident that this would also give access to diversified supplies from LNG terminals. ■