Gazprom secures Bulgaria pipeline deal

Updated 16 November 2012

Gazprom secures Bulgaria pipeline deal

SOFIA: Russian gas giant Gazprom signed yesterday a deal allowing a major new pipeline to pass through Bulgaria on its way to Western Europe, stealing a march on rival EU-backed projects aimed at reducing the bloc's energy dependence on Moscow.
"With the signing today of the final investment decision for the Bulgarian section of South Stream, we move toward the implementation of the project," Gazprom chief Alexei Miller said after inking the deal with the head of the state-owned Bulgarian Energy Holding (BEH) Mihail Andonov. "Bulgaria will now become a big transit point of Russian gas to Europe," he added.
The 3,600-kilometer (2,200-mile) South Stream pipeline aims from late 2015 onward to bring huge volumes of Siberian gas to Europe under the Black Sea. The pipeline would then pass overland through Bulgaria, Serbia, Hungary and Slovenia to Italy.
It and another new pipeline under the Baltic Sea to Germany, Nord Stream, bypass Ukraine and Belarus. Moscow has had angry disputes over transit fees with these countries in recent years, leading to supply problems in Europe.
Amid fears about Moscow using its gas wealth for political ends, the European Union meanwhile has sought to diversify its supplies by backing rival projects that aim to bring gas from Azerbaijan via a route that skirts Russia.
By signing the deal, former communist Bulgaria also managed to secure a 20-percent cut on the price it currently pays Gazprom in a new 10-year gas contract also inked yesterday.
All of its gas — some three billion cubic meters annually — currently comes via Ukraine, and Bulgaria was one of the countries worst hit by a Moscow-Kiev price spat in January 2006.
BEH and Gazprom had already set up in November 2010 a joint venture to plan, build and operate the 540-kilometre Bulgarian section of South Stream.
The pipeline will "give additional security to gas deliveries for the country," Bulgarian Energy Minister Delyan Dobrev said yesterday.
Gazprom and its European partners — Italy's ENI, France's EDF and Germany's Wintershall — are due to begin work on the Black Sea section of South Stream on Dec. 7.
Gas is due to start flowing on the new pipeline to Europe from early 2015. The project aims to achieve an annual capacity of 63 billion cubic meters (2.2 trillion cubic feet) by 2018. Its estimated cost is about 16.5 billion euros ($ 21.1 billion).


Saudi energy giant to invest $3bn in Bangladesh’s power sector

Updated 22 October 2019

Saudi energy giant to invest $3bn in Bangladesh’s power sector

  • Experts say deal will usher in more economic and development opportunities for the country

DHAKA: Saudi Arabia’s energy giant, ACWA power, will set up an LNG-based 3,600 MW plant in Bangladesh after an agreement was signed in Dhaka on Thursday.

The MoU was signed by ACWA Chairman Mohammed Abunayyan and officials from the Bangladesh Power Development Board (BPDB), officials told Arab News on Monday.

According to the agreement, ACWA will invest $3 billion in Bangladesh’s energy development sector, of which $2.5 billion will be used to build the power plant while the rest will be spent on an LNG terminal to facilitate fuel supply to the plant. Under the deal, ACWA will also set up a 2 MW solar power plant.

In recent months, both countries have engaged in a series of discussions for investment opportunities in Bangladesh’s industry and energy sectors. 

During the Saudi-Bangladesh investment cooperation meeting in March this year, Dhaka proposed a $35 billion investment plan to a high-powered Saudi delegation led by Majed bin Abdullah Al-Qasabi, the Saudi commerce and investment minister, and Mohammed bin Mezyed Al-Tuwaijri, the Saudi economy and planning minister.

However, officials in Dhaka said that this was the first investment deal to be signed between the two countries.

“We have just inked the MoU for building the LNG-based power plant. Now, ACWA will conduct a feasibility study regarding the location of the plant, which is expected to be completed in the next six months,” Khaled Mahmood, chairman of BPDB, told Arab News.

He added that there are several locations in Moheshkhali, Chottogram and the Mongla port area for the proposed power plant.

“We need to find a suitable location where the drift of the river will be suitable for establishing the LNG plant and we need to also consider the suitability of establishing the transmission lines,” Mahmood said.

“It will be either a JV (Joint Venture) or an IPP (Independent Power Producer) mode of investment, which is yet to be determined. But, we are expecting that in next year the investment will start coming here,” Mahmood said.

BPDB expects to complete the set-up process of the power plant within 36 to 42 months.

“We are in close contact with ACWA and focusing on the successful completion of the project within the shortest possible time,” he said.

Abunayyan said that he was optimistic about the new investment deal.

“Bangladesh has been a model for the Muslim world in economic progress. This is our beginning, and our journey and our relationship will last for a long time,” Abunayyan told a gathering after the MoU signing ceremony.

Economists and experts in Bangladesh also welcomed the ACWA investment in the energy development sector.

“This sort of huge and long-term capital investment will create a lot of employment opportunities. On the other hand, it will facilitate other trade negotiations with the Middle Eastern countries, too,” Dr. Nazneen Ahmed, senior research fellow at the Bangladesh Institute of Development Studies (BIDS), told Arab News.

She added that Bangladesh needs to weigh the pros and cons before finalizing such contracts so that the country can earn the “maximum benefits” from the investment.

“It will also expedite other big investments in Bangladesh from different countries,” she said.

Another energy economist, Dr. Asadujjaman, said that Bangladesh needs to exercise caution while conducting the feasibility study for such a huge investment.

“We need to address the environmental aspects, opportunity costs and other economic perspectives while working with this type of big investment. Considering the present situation, the country also needs to focus on producing more solar energy,” Dr. Asadujjaman told Arab News.