Bulgaria-Serbia Interconnector Gas Pipeline

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The Bulgaria-Serbia Interconnector Gas Pipeline, also called the IBS Interconnector and the Nis-Sofia Gas Pipeline, is a proposed pipeline in Bulgaria and Serbia.

Location

The pipeline will run from Nis, Serbia to Sofia, Bulgaria. The exact route appears in the European Commission's March 2018 update on the project and page 74 on the Bulgartransgaz network development plan.

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Project Details

• Owner: Bulgartransgaz, Gastrans
• Parent: Transgaz, Gazprom, Srbijagas
• Proposed capacity: 1.8 billion cubic meters per year
• Diameter: 700 mm/ 28 inches
• Length: 170 km / 105.63 miles
  • Bulgarian Section: 62.2 km / 38.6 miles
  • Serbian Section: 108 km / 67 miles
• Status: Construction
• Start Year: 2023
• Cost: €134 million (US$152.7 million)
• Financing: €49.6 million European Commission grant to Serbia; €25 million European Investment Bank loan for the Serbian section; a €27.6 million grant to Bulgaria from the Connecting Europe Facility; a €49 million state-guaranteed loan for Bulgartransgaz from Dutch bank ING; €1 million Western Balkans Investment Framework grant.
• Identifiers:
  • 2022 ENTSOG TYNDP: TRA-F-137
  • PECI code: Gas_09
  • WBIF: PRJ-SRB-ENE-002

Capacity Expansion

• Owner: Bulgartransgaz, Gastrans
• Parent: Transgaz, Gazprom, Srbijagas
• Proposed capacity: 0.6 billion cubic meters per year
• Diameter:
• Length: Capacity expansion only
• Status: Construction
• Start Year: 2023

Background

The Bulgaria Serbia Interconnection will have a capacity of 1 to 1.8 billion cubic metres per year from Bulgaria to Serbia, and 0.15 billion cubic metres per year from Serbia to Bulgaria. The project forms part of the EU's Projects of Common Interest (PCI) and is being treated as a priority for the Central and South Eastern Europe Energy Connectivity High Level Group (CESEC). The pipeline will provide a new supply route from Bulgaria to Serbia, as well as to other parts of the South-East European region, enabling access to liquefied natural gas (LNG) from Greece, Azeri gas from the Southern Gas Corridor, and gas from Black Sea offshore production.

Its European Network of Transmission System Operators for Gas 2020 TYNDP code is TRA-F-137. According to the Eastern Europe Natural Gas Partnership in 2021 its TYNDP code is "TRA-N-137". The pipeline was included in the 5th PCI list published by the European Commission in November 2021.

Construction of the pipeline started in February 2022, with the originally planned 2022 completion date delayed to the fourth quarter of 2023, according to the promoters' estimation.

The pipeline will also have an increased capacity after the completion of the project "Rehabilitation, modernization and expansion of the Bulgarian transmission system", whereby the capacity of the pipeline will increase by 0.6 bcm/year.

Speculation in autumn 2022 about the pipeline's start-up date suggested that it could be on track to start operating in early 2023 amid renewed efforts by Balkan countries to tap additional gas from Azerbaijan via the Southern Gas Corridor network.

On February 1, 2023, construction work began on the project's 62-km Bulgarian section.

Financing

The European Commission is funding the Serbian side of the pipeline with a grant of €49.6 million, and the European Investment Bank approved a €25 million loan in December 2018 for the construction of the Serbian section. In 2020, Bulgaria was awarded a €27.6 million grant under the Connecting Europe Facility for construction works.

One of the project promoters, Bulgartransgaz, a state-owned gas transmission system operator, announced in September 2020 that it had borrowed €455 million from banks to finance various key projects such as the Bulgaria-Serbia Interconnector. Bulgartransgaz signed loan agreements with ING Bank, Citibank Europe, Raiffeisenbank Bulgaria, UniCredit Bulbank, the International Bank for Economic Co-operation, Eurobank Bulgaria, DSK Bank, and a consortium comprising state-owned Bulgarian Development Bank and the International Investment Bank. In February 2023, Netherlands-based bank ING confirmed a €49 million state-guaranteed loan with Bulgartransgaz for the project.