Bulgaria's decision to increase the capacity of the Trans-Balkan pipeline shows the country's intent to capture the entire gas volume of the TurkStream natural gas pipeline project's second line, according to Jonathan Stern, founder of the Natural Gas Research Program at Oxford Institute for Energy Studies.
Stern said on Friday that Bulgaria is not necessarily the most powerful candidate for TurkStream's second line to transfer gas to Europe. The line will have the capacity to carry 15.75 billion cubic meters of natural gas per annum.
Turkey and Bulgaria officially launched the new Lozenets-Nedyalsko pipeline Friday, paving the way for natural gas exports to Bulgaria and natural gas flow to Europe via Turkey. The new line will increase the current Trans-Balkan pipeline's capacity from 14 billion cubic meters to 15.75 billion cubic meters.
The new 20-kilometer Lozenets-Nedyalsko pipeline will allow reverse flows between the two countries.
The opening ceremony was held with the attendance of Bulgaria's Prime Minister Boyko Borisov, Turkey's Energy and Natural Resources Minister Fatih Dönmez and Bulgaria's Energy Minister Temenuzhka Petkova. Turkey, which aims to become a natural gas exporter, has implemented major projects in natural gas supply. It launched the Trans Anatolian Natural Gas Pipeline (TANAP) in June and aims to complete the TurkStream natural gas pipeline project by 2019.
TurkStream is a gas pipeline project stretching across the Black Sea, from Russia to Turkey and farther to its western border. The first line of the pipeline intends to supply gas to Turkish consumers, while the second line is designated for consumers in southern and southeastern Europe. Each line will have the throughput capacity of 15.75 billion cubic meters of gas per year.
"This looks like a move from Bulgaria to try to capture the entire volume of gas from TurkStream 2," Stern noted.
However, Stern explained the decision that TurkStream operator Gazprom will take on the line's transfer route depends on which European markets Gazprom will find more profitable.
Gazprom has two candidate transfer countries for the second line of the giant pipeline, Stern explained, adding, "If Gazprom believes that the ultimate market for TurkStream 2's gas is Italy - then Greece is a better option. If Gazprom believes that the ultimate market for TurkStream 2's gas in Central Europe - then Bulgaria is a better option." Russia is currently negotiating plans for TurkStream's second line with Greece and Bulgaria.
John Roberts, a senior fellow at Atlantic Council's Global Energy Center said that based on the launch of this Bulgarian-Turkey Lozenets-Nedyalsko pipeline, Gazprom is at least assessing the prospect of sending some TurkStream gas to Bulgaria.
"But we need to know more about Gazprom's willingness to use existing lines in the Balkans, such as the Trans-Balkan line, or to invest in building new infrastructure in the Balkans before we can judge how serious they are," he said.
He argued that Gazprom might look at sending some gas to Balkan customers via Bulgaria and some via Greece.
However, he said the big issue, which this pipeline does not resolve, is how Gazprom can deliver gas via the TurkStream 2 to customers in Central or Western Europe. Meanwhile, speaking at the opening ceremony on Friday, Minister of Energy and Natural Resources Fatih Dönmez said that the pipeline will carry natural gas to Europe - which will both contribute to natural gas supply security of Turkey and Bulgaria and boost the importance of both countries in the European natural gas market.
Pointing to investments that Turkey has made in strong natural gas infrastructure, the minister noted, "Turkey is taking firm steps not only toward satisfying its own demand, but also responding to regional energy requirements."
The Turkish minister noted that the pipeline would also enable reverse flow gas transmission from Turkey to Bulgaria with the possibility of Bulgaria receiving Russian gas through the TurkStream natural gas pipeline. Indicating that Turkey plays a significant part in bringing Middle Eastern and Caucasian resources to the global markets, the energy and natural resources minister said, "With its strong economic infrastructure and predictable markets, our country is the first destination and indispensable partner of international energy projects."