Ilian Vasilev, Board member of the Center for the Study of Balkan and Black Sea Region, in an interview with Radio Focus.
FOCUS: Mr. Vasilev, news from Azerbaijan is that Bulgaria will be the first country of the European Union (EU) which will receive gas from Azerbaijan. This agreed Azerbaijan President Ilham Aliyev and Prime Minister Boyko Borisov. The question is how we get natural gas. In your opinion, what is the most perspective route for gas from Azerbaijan to Bulgaria?
Ilian Vasilev: First, to specify that we will not be the first EU country. Greece has a contract with Azerbaijan, many years ago for the supply of Azeri natural gas, of course, in small quantities. Perhaps [we are first EU country] given more recent period, new projects that are developing. In terms of feasibility, it is a function of how rapidly we will construct the interconnections with Turkey, i.e. the rapidity with which we have the technical capability to import Azerbaijani gas. Greece has done the same eight years ago. It made interconnector with Turkey, which supplies Greece with natural gas and due to which it has developed two projects to transport Azerbaijani gas. One was ITGI, another was Trans Atlantic gas pipeline. So this connector with Turkey is of strategic importance - in terms of how far we ourselves can diversify our supplies of natural gas, a and in terms of positioning, both Bulgaria and the realization of the northern routes for delivery of Azeri gas in Central Europe.
FOCUS: Is the position of Azerbaijan is better option – to receive Azeri gas through Turkey?
Ilian Vasilev: In Azerbaijan, there are several factors that determine the road. First, of course is strategic partnership with Turkey which is dominant in the Turkish-Azeri relations. For this reason implementation of projects in Georgia to supply compressed natural gas will always be overshadowed by the strategic partnership between Azerbaijan and Turkey. Second, gas supplies from Azerbaijan should be considered in the context of the Trans-Caspian gas pipeline, i.e. possible increase of the volumes from Shah Deniz, in the second phase, the first quantities which are expected by 2017; increase of these deliveries with supplies from Turkmenistan. And then, at higher volumes, it is reasonable Azerbaijan to consider not only Turkish destination, but other areas because everyone seeks diversification. The third condition that must be calculated always, is of course, the attractiveness of these supplies from a purely business perspective for the three companies that actually hold the rights to natural gas. This is the Norwegian Statoil, it is the British Petroleum and of course Sokar - Azerbaijani company. Their personal involvement and development in these projects largely determined routes of the supplies of Azeri gas.
FOCUS: Yes, as far as I understand, the more realistic from in terms of the time is the route via Turkey, but in the long run should be discussed and debated transport through Georgia. In recent days the foundations of Nabucco project have shaken by leaving the Hungarian state. In your opinion, is the withdrawal of Hungary fatal and is it final? How do you think?
Ilian Vasilev: Well, it is not encouraging, of course, but should not be dramatized. In fact, Nabucco project is currently looking for their more practical playing field, because in its original form, it was just a geopolitical replica of the South Stream project, and South Stream is generally strongly dominated political project with small business estimates. In the EU, of course, none of the parties involved in Nabucco pipeline project can afford to implement purely political ambitions without having strong economic grounds, because funds invest in it, are still significant - these are about 10 billion. Thus, in this part, for oversized ambition, it is currently looking for more normal options.
FOCUS:And amid all that said, what are the perspectives for diversification of the source of gas supply, are they optimistic in terms of gas prices for Bulgaria as well?
Ilian Vasilev I am a moderate optimist, but you must have in mind that we have do our job by ourselves and expand the horizons of our possibilities, because diversification begins at home. Diversification begins with energy efficiency. Second - begins with increasing exploration and production in the country itself. Third - the real work on the development of connectivity and access to real sources of natural gas. Fourth - to the realization of the opportunities that now we have through the so-called solar deals. Furthermore, we must integrate our gas balance with natural gas fields, with transit capacities with the policy of using natural gas, including through further gasification and gas exchanges. We currently do not even have a big player in the gas sphere, especially in the realization of diversification, because we are in a state of uncertainty - we have Bulgargaz company, which seemed not to be given or its capacity was limited in implementing projects for mining, exploration, transit, because it operates in Bulgaria. Meanwhile, Bulgarian Energy Holding hasn’t its own face. It is rather representative of the state in implementation of projects in infrastructure. In general, we have much work to do here.