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Bulgaria announces an agreement with Azerbaijan on the exchange of electricity for gas

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Bulgarian Minister of Economy and Industry Nikola Stoyanov announced an agreement between Baku and Sofia on the exchange of electricity from Bulgaria for gas from Azerbaijan.

According to him, the relevant agreement was reached during the minister’s recent visit to Baku.

“They produce electricity only from gas, and we are a large electricity producer, we export it, we have overproduction. There is such a possibility, it is confirmed in principle – if we can provide them with electricity, then instead of producing electricity from gas, they can give it to us,” Stoyanov told BNT (Bulgarian national television) on September 11.

It can be understood that official Sofia is offering Azerbaijan to purchase additional volumes of gas under a barter scheme: for each imported cubic meter of Azerbaijani gas, return some volumes of electricity. In principle, such a scheme of energy cooperation meets the interests of Azerbaijan, which has repeatedly stated this year about the country's ability to export electricity to Europe. At the same time, two routes for the supply of electricity are considered: through the Zangezur corridor to Turkey and further along its high-voltage lines to Europe, as well as through Georgia and further along the bottom of the Black Sea to Europe. The proposed Bulgarian option also simplifies the delivery of Azerbaijani gas to Europe, since, on the border of Bulgaria, the received electricity can be considered the starting point for the export of Azerbaijani "light" to European countries. That is, in order to export electricity to Europe, Azerbaijan will not actually have to pay for transit.

The Bulgarian minister also said that in Baku the parties discussed such issues as the launch of the Greece-Bulgaria interconnector (IGB) and the expansion of the Southern Gas Corridor (SGC), the possibility of obtaining additional volumes of gas with the expansion of the SGC in a few years and at the same time in a different way this winter .

The minister stated with confidence that the commercial operation of IGB will begin on October 1, 2022, and this will allow Bulgaria to increase gas supplies from Azerbaijan.

He also announced Sofia’s plans to increase gas purchases from Azerbaijan by another 1 bcm a year – up to 2 bcm – in a few years with the expansion of the Southern Gas Corridor.

“In the future, it is planned to expand the Southern Gas Corridor, and in 3-4 years, with its expansion, we can receive an additional 1 bcm of gas a year from Azerbaijan,” the minister stressed. “We were offered, as a traditional partner, to keep a small part of the expansion. This means that we will have 2 bcm per year under a long-term contract with Azerbaijan, and our consumption is about 3.5 bcm per year, that is, we will cover about 60% of our gas needs with supplies from Azerbaijan. Energy Ministry experts will continue negotiations with Azerbaijan, there will be negotiations on price, volumes, terms, etc.,” Stoyanov said.

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