Black Sea Rising
The Bulgarian and Romanian natural sectors are characterized by several features, including wide prospects for establishing themselves as a regional natural gas hub, as well as optimistic findings concerning offshore gas production.
This was presented at the 2nd Annual Balkan Oil & Gas Summit together with some very interesting aspects of the Bulgarian natural gas strategy vi-a-vis the Balkan region. Romania has also its own gas production from mature fields that have the potential to expand further.
Max Torres, exploration director for Repsol, which conducts research in offshore blocks in Bulgaria, noted that his company deals with similar projects at a global level and is convinced that Bulgaria has substantial amounts of gas that it aims to explore.
Repsol has expertise drilling high-depth wells and the technical know-how to explore in complex geophysical structures and such is the case in Bulgaria's Black Sea. Moreover, Torres noted that offshore Romania Exxon, together with its local partner Petrom, have assessed around 3 tcf of gas and further expectations are in place by Repsol itself, which as Max Torres noted, is interested in revitalizing the once mighty Romanian oil and gas domestic production.
The Black Sea, according to Respol, is a high risk/high reward region, and has also some distinct advantages such as good rapport between international companies and governments and the right legal framework, as well as local experienced human resources.
Both Bulgaria and Romania are gasified countries and the potential for growth is significant. Also, Romania's onshore mature gas fields can be considered as medium risk/medium return, with a very low cost of $20 million per well and with already in place infrastructure.
Repsol assured that drilling in that region will take place in early 2014 and it has already done and assessed its complex 3D coverage. At that point it is important to note that a high-level Romanian corporate participant in the conference stated in the sidelines of the event, exclusively for Natural Gas Europe, that in November 2013 a formal announcement will be made concerning the commencement in due time of the Azerbaijan-Georgia-Romania Interconnector (AGRI) project, which will further add Azeri gas to the energy mix in Southeastern Europe and at the same time elevate the importance of the region for the EU’s energy security.
Kiril Temelkov, CEO of the gas network administrator Bulgartransgaz, shed light to some exciting prospects for the Bulgarian national gas strategy.
First of all the main short term goal of the company is to upgrade its existing network by modernizing compressor stations, overhauls and replacement of certain central parts of the transmission system. The target by 2015 is to be able to pump upon demand around 10 mcm daily to neighboring countries.
The above is just one step of the overall project, which will be coupled with the construction of an underground gas storage facility of 1 bcm. Nowadays Bulgaria can pump 4 mcm to its partners and has storage facilities of 500 mcm. The importance of the TAP pipeline was also noted concerning Bulgarian plans since it would serve in diversification of Bulgarian imports through the use of the Interconnector Greece-Bulgaria (IGB) which is scheduled to be completed by 2015.
Temelkov also emphasized that Bulgaria wants all interconnectors with Romania (IBR), Serbia (IBS), and Turkey (IBT) to be completed by then, while the South Stream pipeline in the country will further emphasize its role as the key hub for the region and will provide it with access to 21 bcm of gas. Bulgartransgaz is also keen to explore possible synergies with Greece in importing LNG, should a new terminal be built in Northern Greece, as previously announced by Greek authorities. In such case the IGB will be upgraded from its proposed 3 bcm per annum capacity to around 5 bcm.
The key elements of Bulgarian gas strategy are: diversification, regional market integration, technical upgrade and steady regional gas supply.