Economics

Yordan Kostadinov, former Director of Kozloduy NPP: The procedure for selecting an investor for Belene NPP is the longest possible

Supplies of natural gas from Turkey cannot happen without Gazprom’s consent

Photo: Michel Geron

Georgi Velev

Mr. Kostadinov, currently there is a problem with the payment of the Bulgarian contribution to the Burgas-Alexandroupolis oil pipeline? Do you believe that this could have serious consequences on the entire project?
- The problem now is not with the payments or with where the pipe will pass trough, or what our percentage share would be. We must clearly and accurately decide whether Bulgaria will participate in the project or not. A contribution of €5 mln is not a problem, especially when it comes to major energy projects expected to be lucrative over the next 20-30 years. The problem is quite different. It lies in our uncertainty in regard to energy projects, which make our major partners nervous. If we can afford to change something within two days at home, at the level of cooperative international decision making on energy issues, this is unacceptable.
No matter how much I do not want to make any analogies, I think that we are moving to a point when we may repeat a mistake from 1997. This was a mistake of the ruling then PM Zhan Videnov, which was also indecisive about these projects. In this case, I am talking about the Blue Stream gas pipeline.
It should be completely clear, that when it comes to large energy projects, Prime Ministers are those who have the word.

Do you believe that it is possible to abandon the Burgas-Alexandroupolis project for the Turkish Samsun - Ceyhan oil pipeline?
- President Vladimir Putin came to Sofia with the entire Russian economic and political elite. He had previously announced that he will sign three contracts - for the Burgas-Alexandroupolis oil pipeline, for the South Stream gas pipeline and the Belene NPP. This was also his last visit abroad, regarding such important projects. For me these three projects have always been considered in a package. I suppose the Russian party thoughts the same. The projects are interrelated. If in Burgas-Alexandroupolis, Bulgaria is not the best rewarded party, we have got bonuses in the other projects to compensate for this. This creates a balance.
I am not a big supporter of the Burgas-Alexandroupolis oil pipeline, but such is life. You may not get only good things and ignore the bad ones. The question is what we will demand in return if we say 'yes'. We must have a clear position, because this will outline the development of the region and the transfer of hydrocarbons for years to come. As a transit country we cannot try to stay off and on. I wish we would be able to do it, but now this is not possible.

Some days ago it became clear that the Energy Ministry expected the consultant for Belene NPP to be selected by April. The delay of the project is a fact, but how do you envision the project’s implementation under the new terms, proposed by the Government?
- Bulgaria has not specified yet the percentage it would like to retain for itself. The technical project is expected to be ready soon and it has to be approved by the Nuclear Regulatory Agency. Then we may ask ourselves what to do from now on. As far as I am aware of the Russian legislation, a working project cannot be given to another party with which no EPC (Engineering, Procurement and Construction) contract has been signed. The question is when the contract will be signed and when construction will begin. Finding an investor is a long process and the incumbent Government is doing this for the first time. It is one thing to set terms and another – to observe them. I am not optimistic about launching this project by the year-end, but if this happens, it will be a huge plus for the project. The procedure for selecting an investor for Belene NPP is the longest possible, though.

Won't the electricity from Belene be mainly exported?
- Everybody now claims that no new electricity capacities are needed, arguing that the existing power plants produce sufficient quantity of electricity to meet Bulgaria’s demand. Now we can also say that the energy we generate remains solely for us. But I would ask: what do we produce to compensate for our imports? Electricity is the only thing, which compensates the deficit. Bulgaria is very well geographically located and has a good infrastructure and personnel that can work. And electricity is a commodity we could sell.

Is it possible for Bulgaria to receive fuel via the liquefied gas terminals in Turkey?
- PM Boyko Borissov’s visit to Turkey was surprising and inexplicable to me. This kind of meetings are usually prepared several months in advance. Topics are usually agreed between experts and the answers are rehearsed. Surprisingly, Energy Minister, Traicho Traikov, also turned up at the meeting. As far as I know, he was not to attend the delegation according to the initial plans. Nothing important was done at this meeting. The use of terminals for liquefied gas in Turkey cannot happen without the consent of Gazprom, the owner of the fuel. Therefore, this type of gas supply from Turkey should be negotiated between Bulgaria, Turkey and Gazprom. Otherwise, this cannot possibly happen. Azerbaijan is still unable to supply gas to our southeast neighbours.

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