Bulgaria’s Bulgartransgaz company is starting talks with Azerbaijan’s state oil company SOCAR on the volume of gas supplies to Balkan hub, Investor.bg reported citing Bulgaria’s Deputy Energy Minister Zhecho Stankov.

The deputy minister said that the talks are at an early stage.

“The Bulgarian company is in talks on using the part of the free volumes of gas from Azerbaijan’s Shah Deniz 2. This is about 3 billion cubic meters from the second phase of development of the field,” added Stankov.

As much as 16 billion cubic meters of gas will be produced under the Shah Deniz 2 project. Six billion cubic meters of this volume will be delivered to Turkey, while the remaining 10 billion cubic meters will be supplied to Europe through the Trans Adriatic Pipeline (TAP).

Bulgaria will receive gas from the Caspian Sea region through the Interconnector Greece-Bulgaria (IGB).

“The project is on track. All land acquisition procedures in the country have been completed and the permit for the pipeline’s construction in Bulgaria is expected to be issued in the third quarter of 2017,” said Teodora Georgieva, executive officer at ICGB AD joint venture company.

The construction permit in Greece is expected to be issued in the fourth quarter of 2017.

“The project’s cost is estimated at around 240 million euros. As much as 45 million euros have been secured by the EU. Bulgaria can receive around 35 million euros before completing the procedure of using additional funds under the "Competitiveness and Innovation" program,” Georgieva added.

Stankov for his part, noted that IGB is an important, but not sufficient for creating Balkan gas hub.

“Its construction is important for the implementation of the Balkan gas hub project, but IGB and other interconnectors are not sufficient for this. The plan on expansion of Chiren gas storage facility is also important for this project,” said Stankov. “Currently, the second well is being drilled here for capacity expanding. The well will be put into operation soon.”

IGB is a gas pipeline, which will allow Bulgaria to receive Azerbaijani gas, in particular, the gas produced from Azerbaijan's Shah Deniz 2 gas and condensate field. IGB is expected to be connected to the Trans Adriatic Pipeline (TAP) via which gas from the Shah Deniz field will be delivered to the European markets.

The initial capacity of IGB will be 3 billion cubic meters of gas.