Teodora Georgieva, Executive Officer of ICGB: "It is extremely important for the operation of the LNG terminal near Alexandroupolis to begin as soon as possible."

Teodora Georgieva has more than 20 years of experience as a strategic manager, leading significant projects in various economic sectors. Currently, Mrs. Georgieva is an Executive Officer of ICGB and a member of the Board of Directors. ICGB is responsible for the overall management and development of the gas pipeline between Greece and Bulgaria (IGB) and is the second independent transmission operator in Bulgaria.

From 2012 to 2014, Georgieva was Managing Director of Nabucco Bulgaria and prior to that she worked for OMV Bulgaria for 13 years, 8 of which she held the position of Managing Director of the company, combining also cluster positions for Bulgaria, Romania and Serbia. She is a graduate of the UNWE and holds a Master's degree in Finance. Married with two children.

1. Mrs. Georgieva, the pilot activities of the Vertical Gas Corridor project have recently started in Bulgaria, please share your vision for the project and how it fits into the idea of energy diversification for South-Eastern Europe.

The Vertical Gas Corridor initiative is essential for energy diversification and security of supply for Southeast Europe, being the most important alternative to gas pipelines coming from the East. This is particularly important given the expected cessation of transit of Russian gas through Ukraine to Europe as early as early 2025. I strongly believe in the strategic role of the Vertical Gas Corridor project and, in particular, the role of the ICGB in ensuring energy security and diversification of sources for Europe and the region. This is particularly true in the current circumstances for Ukraine, which has always been our target market. I take this as both a professional and personal goal and cause. ICGB is driving the initiative and despite the challenges, both I and our team remain strongly committed to this.

All operators involved in the initiative welcomed the accession of Slovakia and, following ICGB's proposal, Moldova and Ukraine to the Vertical Gas Corridor in January this year. The inclusion of Ukraine and Moldova at the earliest possible stage was also extremely important. The joint efforts that we are all making through a number of projects are aimed at making better use of the existing natural gas infrastructure in the region. This will enable the Trans-Balkan pipeline to be used in the opposite direction, which could provide for the transport of 10 billion m3 /year of liquefied natural gas from terminals on Greek territory and Caspian gas via the Southern Gas Corridor. The Greece-Bulgaria interconnector is an extremely important element of this plan for a more connected and energy-independent South-East Europe, as it is an indispensable element of this transmission route to our region and also to some countries in Central Europe.

As the transmission systems in the region are interconnected, a simultaneous and coordinated approach to their expansion is needed to exploit their full potential. In this context, the corridor participants have conducted a joint capacity addition procedure. Taking into account the dynamic market conditions, the operators - in coordination with the relevant national regulatory authorities - decided to shorten the period for the procedure from two years to one in order to start the expansion projects along the Vertical Gas Corridor route more quickly. I believe that there is a broad consensus and understanding at both expert and political level on the strategic role of the implementation of these projects. I hope that this understanding will also translate into practical support - especially now that we are at a stage where funding for transmission infrastructure capacity expansion initiatives needs to be secured. The initiative is an example of joint efforts and uniting under a common cause.

2. Do you expect the Vertical Gas Corridor to be among the main sources of gas for Ukraine? Is it possible that this winter we will see a "loading" of already built pipelines to carry gas from the south to the north?

During the winter months of 2022/2023, the quantities of gas supplied via the IGB were also used to provide diversified supplies to Moldova and this was largely crucial for business and domestic consumption during the season. The IGB route can be used in the future along this route in synergy with the Trans-Balkan pipeline and I believe this will be one of the key sources of natural gas for Moldova and Ukraine following the termination of the Russian supply contract. Opportunities are also being explored for potential LNG supplies from the US to Ukraine through this corridor. I expect that the Vertical Gas Corridor will be increasingly important for our region - you know that it covers operators not only from Greece and Bulgaria, but also Romania, Hungary, Slovakia, Moldova and Ukraine.

The IGB has a central role in the Vertical Gas Corridor, especially thanks to its direct connection to the Southern Gas Corridor. The pipeline's location is highly strategic as it is at a crossroads of sorts - it connects Bulgaria directly to the Southern Gas Corridor, allowing diversification of supply, but it is also in synergy with the Trans-Balkan pipeline, providing many opportunities for transmission to third markets. In this sense, the further development of the interconnector is among the most important priorities when we talk about the implementation of the Vertical Gas Corridor.

Regional cooperation between gas transmission system operators is essential for timely planning of network expansion and dealing with potential bottlenecks. Here again, the Vertical Gas Corridor plays a key role as it allows any potential bottlenecks to be addressed through expansion projects in a coordinated manner and in close cooperation.

3. In view of changing sources of blue fuel, how far has the IGB interconnector capacity expansion project progressed? Will it continue to work in synergy with the Vertical Gas Corridor?

The IGB interconnector has a key role to play in the implementation of the Vertical Gas Corridor, and increasing its capacity will have a significant impact on supply in the regions concerned. Last summer, ICGB launched an incremental capacity process to assess market demand for increasing the technical capacity of the pipeline. It was conducted in two main phases, non-binding and binding, in close cooperation with the operators of neighbouring transmission systems.

The non-binding phase ended with great success - the indicated interest was for about 4 bcm/y of added capacity for the first few gas years. The binding phase took place recently and its results are in serious conflict with last year's market indications. Our team carried out a detailed analysis of the possible reasons for this change. One of the leading factors identified was the ongoing delay of the LNG terminal at the Greek city of Alexandroupolis. The market had no clarity on the exact date of commercial operation when the binding phase commenced, and you know that this infrastructure is extremely synergistic with the IGB, and the expectation from the outset has been that interest in the interconnector capacity would peak precisely with the launch of the LNG terminal.

Despite these uncertainties and market fluctuations, the Vertical Gas Corridor participants have not wavered in their commitment to implement capacity expansion projects on the available infrastructure. The uncertain and dynamic market environment as well as the significantly lower gas price in Bulgaria compared to European levels, mainly due to the import of Russian gas via Turkey at a dumping price, also play a key role in the reduced market interest. However, this will not affect our commitment to the strategic role of the Corridor. We are currently in joint discussions to coordinate our position on the Vertical Gas Corridor route, with the aim of gathering around ideas involving all gas operators in the implementation of the projects.

The expansion of IGB’s capacity from 3 to 5 bcm/year also remains a top priority for us at ICGB. As a team, we believe that this is strategically important for Bulgaria's energy security and for the diversification and access to supply from a variety of sources for neighbouring countries in the region. For this reason, we are working in parallel on the implementation of this project and, following a procedure under the Public Procurement Act, we have already commissioned a detailed design for the expansion of the capacity of IGB’s gas metering station at Stara Zagora. This has recently been finalized and in the meantime our corporate bodies have approved a comprehensive contractual strategy for the project. We are also confident of the support of ICGB shareholders in approving the interconnector expansion. In parallel, work continues on preparing the necessary procedures to implement the strategy in the coming year.

4. What opportunities do you see at the moment in terms of financing the IGB expansion? Are you looking at options for support with European investment?

This is currently a complex topic that we are working on very actively and are motivated to see through. The company is strongly committed to the implementation of the interconnector capacity expansion project regardless of the outcome of the binding phase of the incremental capacity process. At this stage, natural gas projects are not a top priority for the European Commission, and it refuses to fund gas infrastructure initiatives. However, several meetings have already been held at the highest level in Brussels in the direction of making exceptions.

I believe that, at expert level, we cannot be under any illusions about the role of natural gas in a smooth, fair energy transition to greener energy - this source will be key for quite some time to come. That is why I hope that there may yet be a change in the Commission's position on this, but that is not the only direction in which we are working. We are also proactively focused on finding alternative sources of funding, including the United States Agency for International Development (USAID), which we are relying on to support us. I am in weekly discussions with their chief representative, and I encourage other operators to look to this as a key solution in the event that we are unable to secure funding from Europe. We rely heavily on our American partners, who are also aware of the strategic importance of our infrastructure for the implementation of the Vertical Corridor.

Separately, we are looking for funding locally, as well as discussing any other options with our shareholders.

5. You have recently held auctions for capacity in several lots for next year. Could you say more about how the market is reacting to these supply options?

ICGB has offered capacity for the next five consecutive gas years during the recent annual auctions under the ENTSOG auction calendar to the two independent trading platforms, RBP and Prisma. Interest was extremely weak and is linked to the external factors I have already commented on.

Current market conditions were decisive for these results and all analyses are clear that the postponement of the commercial operation of the Alexandroupolis LNG terminal is a significant factor. This delay invariably affected market interest and long-term capacity commitments, but once the terminal is operational and we have the opportunity to develop our full synergies together, I believe the situation will change significantly. In the meantime, remaining capacity continues to be offered on a monthly basis, so the market, which currently tends to plan shorter term, has every opportunity to get involved with capacity booking.

6. How far has the gas diversion project near Dimitrovgrad reached? Has the diversion to Kardzhali been built yet?

The diversion for Kardzhali has been successfully operational since March 2023 and local domestic and business consumers already have access to secure supplies of blue fuel. ICGB has a contract with the licensed gas transmission operator for the territory of Kardzhali municipality, Citigas Bulgaria. Through this network connection, we have contributed to increased security of supply and ensured the possibility to diversify the sources of supply. At present, there are no plans to build a diversion to Dimitrovgrad due to lack of market interest. As a company, we remain open to working with all local licensed operators when they indicate an interest, and we believe that the gasification of the Bulgarian regions is extremely important.

7. Bulgaria seems worried about the delay of the start of the LNG terminal near Alexandroupolis. Could you explain more about where this delay came from? Could it lead to tensions in the gas markets in south-eastern Europe?

We have noted on more than one occasion that this terminal is very important to IGB's ability to develop its full potential, and accordingly we have always supported this project. We are very much looking forward to the start of commercial operations and I believe this is also true for other operators in the region. You know that the Bulgarian side is also a shareholder in the Alexandroupolis LNG terminal project, so there is no way that with this close connectivity of the transmission infrastructure, the repercussions of this delay will not be felt.

What we do know at this stage is that there is a technical problem that is preventing the LNG terminal from starting on schedule. ICGB is in constant contact with the colleagues who are developing the terminal project, and we are doing everything within our power to assist in resolving this issue. A few days ago, it was announced that the expected date for the start of operations is 1 October, and this is a positive signal. It is important for us as a connected operator that commercial operations occur as soon as possible, as this inevitably has implications for the market and the willingness of participants to plan and book capacity for the long term. Already last year, ICGB offered traders the reservation of capacity at the interconnection point with the Greek operator DESFA precisely for gas expected via the new terminal. We are trying in this situation to provide the most flexible solutions for the market. I hope that there will not be more serious tensions in the market, as you are implying.

8. Do you think Azerbaijan will be able to increase gas supplies to Europe by 2027, as the country plans? Do you have any contact with your colleagues there and how are the projects to increase supplies going?

The IGB connects directly to the Trans Adriatic Pipeline (TAP), making Bulgaria part of the Southern Gas Corridor and providing access to secure supplies of natural gas from diversified sources for both the country and the wider region. Gas supplies from Azerbaijan were the backbone of the IGB pipeline in its initial phases of development and throughout the preparation, implementation and now operation of the interconnector we have had very good relations with our Azerbaijani colleagues. They are our key and extremely reliable partner for gas supplies to Europe. Over time, we have built a long-term relationship and mutual trust, which is hard to earn.

The role of Azeri gas in securing diversified supplies to Europe has grown enormously in recent years and this is not expected to change any time soon. Azeri gas has significant potential in future fields, and I believe that it is through our infrastructure that these quantities will largely be transported. Our observations are that our colleagues at TAP are conducting regular market tests to gauge market interest for additional capacity. As conducting this type of testing is a complex process, it is likely to happen in phases. With the news of TAP's capacity expansion and Azerbaijan's commitment to increase the amount of natural gas exported to Europe in the coming years, we believe there is also room to strengthen the role of IGB.