Bulgartransgaz borrows 200 mln euro for local leg of TurkStream project

Bulgaria's gas transmission system operator Bulgartransgaz said that it has secured six-month loans worth a total of 200 million euro from several lenders, including Citibank Europe, ING Bank, UniCredit Bulbank and the International Bank for Economic Co-operation.

Bulgartransgaz will use the funds to finance the construction of a gas pipeline, which will serve as an extension of the TurkStream pipeline, and two compressor stations, the company said in a statement. The term of the loans can be extended by 6 months. Nine lenders submitted offers in the procedure.

The 1.1 billion euro contract with a consortium of Saudi-based Arkad Engineering and Construction Company and its Italy-based joint venture company Arkad ABB envisages an advance payment of some 300 million levs. The pipeline will connect the country's existing gas transmission system to the border with Serbia, and will carry gas from TurkStream.

The contract for the construction of compressor stations in Rasovo and Provadya, worth a total of 350.8 million levs, requires a 168 million levs upfront payment. Works will be carried out by a consortium comprising Germany's Ferrostaal Industrieanlagen and Bulgaria's Glavbolgarstroy and Glavbolgarstroy International.

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The repayment term for the remaining sum for the gas pipeline is 10 years after its commissioning, while for the compressor stations the period is 2 years.

The offshore section of the TurkStream pipeline stretching 930 km across the Black Sea from Russia to Turkey consists of two parallel strings with annual throughput capacity of 15.75 billion cubic metres of gas each. One string is intended for consumers in Turkey, while the second will carry gas to customers in Europe through Bulgaria.