Landmark Pipeline Investment Agreement Sets the Stage for Interconnector Greece Bulgaria (IGB)

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Landmark Pipeline Investment Agreement Sets the Stage for Interconnector Greece Bulgaria (IGB)

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In line with EU energy policy to diversify sources of energy and thereby enhance European energy security, Bulgaria and Greece have signed a landmark natural gas pipeline investment agreement dubbed the Interconnector Greece Bulgaria (IGB) -- the last step in the development process before construction begins.

State-owned Bulgarian Energy Holding and IGI Poseidon, a joint venture between Greek state-owned gas supplier DEPA SA and Italy’s Edison SpA, signed a final investment agreement Thursday, Bulgarian Energy Minister Temenuzhka Petkova said in Sofia. The 182 km pipeline, scheduled to become operational in 2018 with an annual capacity of 3 - 5 billion cubic meters, is estimated to cost 220 million euros ($241 million), of which the European Union will provide 45 million euros. The IGB will run between the Greek city of Komotini and the Bulgarian city of Stara Zagora.

“The project is strategic for Bulgaria, Greece and all of southeastern Europe,” Petkova told reporters. “It will ensure real diversification of supplies and will be the basis of our concept to set up a gas distribution hub, which will boost the development of the energy market in the region.”

Indeed the IGB will open up an array of options for the region, as it will enable the realization of existing and medium-term alternative gas supply opportunities such as sources in the Caspian Region, Middle East, East Med and LNG, which are planned to be integrated with the Southern Gas Corridor. IGB will be interconnected with the South East Europe neighboring gas markets via the Bulgarian Gas Transmission System.

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