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Bulgartransgaz EAD: Perspectives for Investments and Developing of the Gas Infrastructure Southeast Europe Business Forum; 22 – 23 November 2012, Istanbul

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Bulgartransgaz EAD: Perspectives for Investments and Developing of the

Gas Infrastructure

Southeast Europe Business Forum; 22 – 23 November 2012, Istanbul

Contents

Bulgartransgaz EAD overview

Gas Infrastructure on the Territory of Bulgaria – existing capacity

Capacity Expansion Plans During the period 2013 - 2017:

- New gas pipeline interconnection Bulgaria-Romania

- Interconnections with planned gas pipeline projects developed by other

companies

- New gas pipeline interconnection Bulgaria-Turkey – general benefits; advantages for Turkey and Bulgaria

- Gas Storage Projects

Summary

Bulgartransgaz EAD overview

Bulgartransgaz EAD is the Bulgarian combined gas operator, registered under this name on

15.01.2007 after the restructuring of former Bulgargaz EAD which is successor of the state

company Oil and Gas, established in 1973.

The company is the owner and operator of:

National gas transmission network for natural gas transportation to gas distribution companies and industrial gas consumers in Bulgaria

Transit gas transmission network for transit transmission of natural gas through the territory of Bulgaria between Rumania, Turkey, Greece and Macedonia.

Gas storage facility in Chiren (Chiren UGS)

Gas Infrastructure on the Territory of BulgariaExisting Capacity

National gas transmission network:– Pipelines’ total length: 1 700 km– Three compressor stations - total

power of 49 MW– 8 GMS– 68 AGRS/GRS– Designed technical capacity of the

grid - 8 bcm/y

Transit gas transmission network:

– Pipelines’ length: 945km.

– Six compressor stations - total power of 240 МW

– Designed technical capacity of the grid - 18,7 bcm/y

Underground Gas Storage Chiren /UGS/ – 22 exploitation wells– Above ground technological installations

including one compressor station of 10 МW power.

– Working capacity of 0,5 bcm

UGS

Capacity Expansion Plans During the Period 2013 - 2017

Development of new gas pipeline interconnections with neighbouring countries

Intersystem connections between the transmission network of Bulgartransgaz and gas pipeline projects developed by other companies

Construction of new gas pipeline branches of the existing gas transmission system

Expansion of gas storage capacity

Interconnection Bulgaria-Romania (IBR)

– Pipeline route: Ruse – Giurgiu

– Pipeline diameter: Dn 500

– Pipeline length: 25 km (15 km Bulgarian section)

– Capacity: 0,5 - 1,5 bcm/y

– Investment size: EUR 24 mln

(EUR 13 mln for the Bulgarian section)

– EU grant (EERP): EUR 9 mln of which EUR 4,3 for the Bulgarian section

– Scheduled commissioning: May 2013

Interconnections with planned gas pipeline projects developed by other companies

CONNECTION OF THE TRANSMISSION SYSTEM WITH THE SOUTH STREAM

– New entry capacity: more than 21 bcm/y– Planned commissioning: 2016

CONNECTION OF THE TRANSMISSION SYSTEM WITH NABUCCO

– New entry capacity: up to 4 bcm/y– Planned commissioning: 2017

NEW ENTRY-EXIT POINT OF THE BULGARIA-GREECE GAS INTERCONNECION (IGB)

– Length: 180 km ( 150 km on the territory of Bulgaria)– Capacity: 3 up to 5 bcm/y (in stages)– Investment size: EUR 200 million for the entire project (Grant – EERP)– Implemented by a joint investment company ICGB with shareholders Bulgarian

Energy Holding EAD and IGI Poseidon– Planned commissioning: 2014

Interconnections with planned gas pipeline projects developed by other companies

INTERCONNECTION BULGARIA-SERBIA (IBS)

– Pipeline route: Sofia – Dimitrovgrad – Nis– Pipeline Diameter: Dn 700– Length: 150 km (55 km Bulgarian section)– Pipeline Capacity: 1,8 bcm/y up to 5 bmc/y– Investment size (Grant OPRD): EUR 60 mln

for the Bulgarian section– Completion: 2014– Status: Feasibility study and pre-investment

works (EIA, Routing, DZP)

IBS is developed by MEET, beneficiary of OPRD, Bulgartransgaz EAD extends expert technical support.

Interconnection Turkey-Bulgaria (ITB)

– Pipeline route in BG: Lozenetz – Malkochlar

– Pipeline Diameter: Dn 700 - 1000

– Length: ~ 75 km Bulgarian section

~ 130 km Turkish section

– Investment size: EUR 100 mln for the

Bulgarian section

– Pipeline capacity: 3-5 bcm/y

– Completion: first phase – end of 2014

– Status: Feasibility study and pre-investment works

ITB is a key project which realisation shall lead to the increase of the security of supply and the opportunity for diversification of gas supply to Bulgaria, Balkans and South-Eastern Europe region, before the possible realisation of the gas pipelines TANAP and Nabucco-West and the start of the deliveries from the Shah Deniz – 2 field.

ITB is a key project which realisation shall lead to the increase of the security of supply and the opportunity for diversification of gas supply to Bulgaria, Balkans and South-Eastern Europe region, before the possible realisation of the gas pipelines TANAP and Nabucco-West and the start of the deliveries from the Shah Deniz – 2 field.

General Benefits of ITB

ITB has significant impact on cross-border transmission capacity between Turkey and Bulgaria.

During the first phase it could offer:

- transmission capacity of 3-5 bcm/y in the direction from Turkey to Bulgaria (depending on the available seasonal capacity in the

Turkish grid)

- about 3 bcm/y in the direction from Bulgaria to Turkey (additional capacity to the existing transit capacity to Turkey).

ITB contributes directly to the diversification of counterparts. The new counterparts could be LNG suppliers and Gas Traders dealing in the Balkan region.

ITB has significant impact on cross-border transmission capacity between Turkey and Bulgaria.

During the first phase it could offer:

- transmission capacity of 3-5 bcm/y in the direction from Turkey to Bulgaria (depending on the available seasonal capacity in the

Turkish grid)

- about 3 bcm/y in the direction from Bulgaria to Turkey (additional capacity to the existing transit capacity to Turkey).

ITB contributes directly to the diversification of counterparts. The new counterparts could be LNG suppliers and Gas Traders dealing in the Balkan region.

General Benefits of ITB

- ITB will provide an opportunity for reverse mode of work. Up to around 3 bcm/y could be provided additionally in the direction from Bulgaria to Turkey (in case of market needs) through the use of the available capacity of the national gas transmission system of Bulgartransgaz and gas sources of Russia or CEE gas market (via Bulgaria-Romania Interconnectors).

- Opportunity for use of Chiren UGS available capacity which will increase the reliability and security of supply for Turkey in Istanbul region.

- Opportunity for the Turkish gas traders to negotiate and deliver additional quantities of gas through the interconnection points and the network of Bulgartransgaz EAD.

- Opportunity for additional income for Turkey from natural gas transmission from the existing entry points in the system of BOTAȘ (cross-border and LNG terminals).

Advantages of ITB for Turkey

Advantages of ITB for Bulgaria

- ITB is of great significance for meeting the requirements of the Regulation for the security of gas deliveries, especially Gas Infrastructure Standard N-1.

According to Article 6 of Regulation 994/2010: The competent authority of the respective member state (for Bulgaria - MEET) guarantees that all necessary measures are taken so that no later than 3 December 2014, in the event of a disruption of the single largest gas infrastructure, the capacity of the remaining infrastructure, determined by the N-1 formula, is able to deliver the quantities of gas needed to satisfy total gas demand of the calculated area.

- Contributes to the liberalization of the gas market in Bulgaria and development of gas-to-gas competition.

- The project will increase the flexibility of the gas transmission system.

- Opportunity for added value for Bulgaria from delivery and transmission of natural gas from the existing and future entry points in the system of Bulgartransgaz.

Increase of current daily deliverability and working gas volume in UGS Chiren:

Estimated investment size: EUR 200 mln

Completion: 2014-2017

Status: Feasibility study

New Gas Storage facilitiesConstruction of new gas storage facility on the territory of Bulgaria.

Gas Storage Capacity Expansion

Макс. капацитет за добив инагнетяване

К апацитетза съхранение на газ

настоящ 4,2 млн. куб. м./ден 550 млн. куб. м

след разширение 10 млн. куб. м./ден 1 млрд. куб. м

Deliverability Working Gas volume

current 4,2 mcm/d. 550mcm.

projected 10 1bcmmcm/d.

SUMMARY: New Gas Infrastructure Investment Plans in Bulgaria 2013 - 2017

Gas Interconnections – New gas pipelines on the territory of Bulgaria

100 km. with a new capacity of 3,5 - 6,6 bcm/yBulgartransgaz EAD investments: EUR 113 million

New branches to the existing gas transmission infrastructure

Total length: more than 270 km Total capacity: above 2,5 bcmBulgartransgaz EAD investments: EUR 50 million

Interconnections with planned gas pipeline projects : New capacity: 25-35 bcm/yBulgartransgaz EAD investments: EUR 24 million

UGS Chiren capacity expansion

Additional storage capacity: from 550 mcm in 2012 to 1 000 mcm in 2017 and daily deliverability up to 10 mcm/d;Bulgartransgaz EAD investments: EUR 200 million

Third Parties planned gas pipeline projects in Bulgaria: IBS, IGB, South Stream, Nabucco: Total pipelines: ~ 1 150 km.Total investments: ~ EUR 3,5 bln.

www.bulgartransgaz.bg [email protected]

Thank you for your attention!