Baku, February 22, AZERTAC

Teodora Georgieva, CEO of the ICGB pipeline company was interviewed by the Azerbaijan State News Agency (AZERTAC).

The Interconnector Greece-Bulgaria (IGB), designed to supply natural gas from Azerbaijan to Bulgaria, entered commercial operation on October 1, 2022. Its current capacity is 3 billion cubic meters per year, with the possibility of increasing the capacity to 5 billion. The pipeline connects Bulgaria to the Southern Gas Corridor (SGC) and is an integral part of the Vertical Gas Corridor. This project significantly strengthens energy connectivity and security in the region, providing access to gas from alternative sources.

- Mrs. Georgieva, how do you assess the role of Azerbaijan in ensuring energy security for Europe?

- Azerbaijan has certainly been a reliable partner for ICGB for a long time and I’d like to think our great partnership has room to grow even further. It’s public knowledge that 1/3 of the IGB pipeline’s capacity has been booked under a long-term contract for transportation of Azeri gas coming from Shah Deniz 2 and this proved to be instrumental for the support we received back in the project phase when working on securing funding prior to entering construction phase. Now that the interconnector is fully operational, we can clearly see the positive effect introducing access to new sources of natural gas deliveries has had in Bulgaria.

On a larger scale, Azerbaijan has earned a significant role in Europe’s energy security by diversifying supply particularly through the Southern Gas Corridor. The ongoing war in Ukraine posed a significant shift in gas flows and market behavior. Azerbaijan has shown reliability as an energy partner through long-term contracts ensuring steady supplies even during the recent energy crisis. Its cooperation with Europe now also extends to renewable energy investments, including wind and solar projects in the Caspian Sea so I believe we will see the country’s role grow in the years to come. I’m hopeful that the EU will also recognize natural gas projects and cross-country collaboration in that aspect as a priority in order to strengthen its energy independence and ensure an optimized natural gas transmission network that can facilitate larger volumes of Azeri gas.

- How would you characterize the activities of the IGB since the pipeline was put into operation? What role does the IGB play in the energy connectivity of the region?

The Greece-Bulgaria interconnector quickly proved to be instrumental to the region’s energy security in the current challenging environment. We launched commercial operations in October 2022 and just two months after that we managed to help out Moldova and enable secure gas transportation route for it to meet its internal demand in the winter season. IGB played a pivotal role in using the Trans-Balkan gas pipeline in a reverse mode to achieve this. That’s why international energy projects matter so much – they can secure deliveries to the markets of their respective host countries, but at the same time enable new routes for the wider region. This is instrumental to creating diversified routes and improving safety, reduce dependence on a single source and overall improve connectivity. That being said, IGB’s launch had immediate effect on Bulgaria’s now former dependence from Russian supplies and is now in a position to act as a safe route for deliveries to other regional markets including Moldova and Ukraine. This is no small feat for a project and I’m incredibly thankful to ICGB’s team for the persistent efforts in making this happen. Now, as a part of the Southern Gas Corridor and the Vertical Gas Corridor, we’re looking at the next step of the pipeline’s development – expansion of its total capacity from 3 bcm/y to 5 bcm/y.

- What measures is the ICGB taking to implement the expansion project? What steps are being taken to find financing options for the project?

- Together with other transmission system operators under the Vertical Gas Corridor, we implemented an incremental capacity process in 2023-2024 to determine the market’s interest in capacity expansion across the region. While the non-binding phase was a huge success, the results of the binding phase significantly differed. For ICGB this was a clear indication that given the volatility of the market and the uncertainties on a regional and global level, players prefer to commit to shorter term solutions and are hesitant to book long-term capacity.

That’s why we’ve been focused on pushing forward expansion plans under a different format and are discussing options for financing. Apart from the project design for one of the gas metering stations, we have already prepared the technical specifications based on an approved contracting strategy and are currently assembling the procurement package, particularly legal aspects. This will enable us to launch the procurement process for key items relevant to the expansion upon approval by the ICGB’s supervisory board. Meanwhile, this process will also allow us to seek financing when ensured to continue with taking a final investment decision.

I’m hopeful we will see EU-backed support on this considering the major strategic relevance such projects hold. Other than that, we’re seeking cooperation with the US and are in discussions with our shareholders on potential opportunities.

- What is the strategic importance of the IGB infrastructure for supplies to Moldova and Ukraine?

- This is something I have already touched upon and that has been a cornerstone for ICGB for a while now. With the end of Russian natural gas transit via Ukraine since Jan 1st 2025, impacted markets need to find a sustainable, reliable solution for diversified deliveries. The IGB pipeline is perfectly positioned to allow connectivity with the Southern Gas Corridor and the LNG terminal in Alexandroupolis and enable deliveries to Moldova and Ukraine thanks to the Trans-Balkan pipeline previously used for gas flows in reverse direction. Improving the connectivity of these two markets is crucial and that’s why ICGB initiated integrating the TSOs of both countries in the Vertical Gas Corridor.

- What role does the Vertical Gas Corridor play in the development of the energy landscape?

- To put it bluntly, it complements the Southern Gas Corridor by allowing non-Russian gas, primarily from Azerbaijan via the Trans-Adriatic Pipeline (TAP) and liquefied natural gas (LNG) imports from Greece, to flow further into Central and Eastern Europe. This diversification helps reduce dependence on Russian gas, particularly in Southeastern Europe, and mitigates risks related to geopolitical disruptions. It is key for regional integration, supporting reverse gas flows and improving market flexibility, thereby contributing to long-term stability in the European energy landscape. ICGB strongly believes in this initiative and I’m hopeful the EU will make more noticeable efforts to support the implementation of projects under the Vertical Gas Corridor.

- Why are the IGB and FSRU projects seen as a “new gateway” for gas supplies to the region?

- The IGB pipeline and the FSRU in Alexandroupolis have always been considered as complementary to one another. Together, they are an integrated solution for access to new sources for natural gas deliveries. The interconnector enables the direct flow of natural gas from the Southern Gas Corridor (via TAP) and LNG imports from Greece into Bulgaria and further into Romania, Serbia, and other neighboring countries. The Alexandroupolis FSRU provides an additional source of LNG, allowing access to global gas markets, including the U.S., Qatar, and Algeria etc. The synergy between these two infrastructure projects is strategically planned from the very beginning and it’s a great example of cooperation between allied countries. It’s proof that when united, we can achieve more.

- How does the ICGB view carbon reduction in the context of the development of the hydrogen market?

- ICGB is a forward-looking company and naturally, our experts are keeping an eye on the market demand and development considering potential transportation of blended hydrogen. For now, mixing small percentage of hydrogen is within our capacity, anything beyond this will require further investments and a dedicated, financially motivated decision by our shareholders. Since ICGB’s role is to provide infrastructure, there needs to be sufficient market interest first. This is something we’re definitely interested in in the long run.

- What steps is the ICGB taking for the possible integration of green gases in the future?

- Right now, our strategic efforts are focused on the capacity expansion project. We’ve already developed and approved a procurement strategy and have launched the project design stage for one of IGB’s gas metering stations. Meanwhile, we have to sustain and ensure reliable day-to-day operations. Just as with hydrogen, we’re keeping an eye on market trends and will look into new opportunities as they develop.