Bulgartransgaz Offered Over $600 Million to Complete TurkStream Expansion

(Reuters) — Bulgaria’s state gas firm Bulgartransgaz said on Thursday it has received 10 offers by banks to lend it 542 million euros ($613.38 million) in six-year loans and help it finance an extension of Russia’s TurkStream gas pipeline

The company has to make advance payments to Saudi-led group Arkad, which it has contracted to build the 474 km (295-mile) pipeline extension dubbed Balkan Stream and to a Bulgarian-led group that will install compressor stations for the gas link.

Bulgaria is seeking to build the 1.1 billion euro ($1.24 billion) transit route to help reduce the country’s reliance on Russian gas.

“This (pipeline) will allow us to diversify gas supplies along the whole route, not only for Bulgaria, but also for Serbia, Hungary and Austria,” Prime Ministery Boyko Borissov said.

The interconnector pipeline with Greece, with an initial annual capacity of 3 bcm, is expected to be operational by the end of the year and transport Azeri gas and liquefied natural gas (LNG).

Sofia has also built a gas link with Romania and last year started to decrease its almost complete dependence on Russian gas by importing liquefied natural gas (LNG).

“Gas with different origin, coming via Turkey, via Romania, via Ukraine or Russia can flow through our gas highways. This is a very good investment that will allow Bulgaria to play a key role in the gas transport network of Europe,” Borissov said.

ING Bank, Citibank Europe, International Bank for Economic Co-operation, VTB Bank Europe as well as the Bulgarian units of Raiffeisen, Unicredit, KBC Group, Eurobank and OTP Bank have offered to provide funds to Bulgartransgaz.

Bulgartransgaz has also received an offer by a tie-up between state-run Bulgarian Development Bank, Municipality Bank and Budapest-based International Investment Bank.

“The combined amount of the offers totals 542 million euros. The interest rates for each of the six years of the offered loans vary between 1.35% to 3.5%,” the company said in a statement.

Bulgartransgaz, which sought to borrow 400 million euros, said it would now start talks with the lenders and seal lending contracts.

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