Bulgarian private gas supplier Overgas has agreed to explore the downstream purchase of liquefied natural gas (LNG) from US sector player Excelerate Energy via the latter's planned LNG terminal in Vlora, Albania, the US Company said.
Overgas and Excelerate Energy signed a memorandum of understanding (MoU) ahead of negotiations over the terms of the potential deal, Excelerate Energy said in a press release late on Monday.
Under the MoU, Overgas will seek a ten-year contract to buy up to 1 billion cubic metres (cu m) of regasified LNG per year from Excelerate Energy via the Vlora import terminal, which the US company is looking into to developing together with Albanian state-owned natural gas supplier Albgaz and US energy major ExxonMobil. The gas would be carried over the proposed Vlora-Fier pipeline, which is a 40-km facility expected to link with existing natural gas infrastructure in southern Europe, namely the Trans Adriatic Pipeline (TAP), which allows for natural gas from Azerbaijan to be imported as far as Italy.
The TAP is also connected to the Interconnector Greece-Bulgaria (IGB), which is expected to begin commercial operation before the start of the next heating season at the latest.
"For many countries in Europe’s Southern Gas Corridor, flexible access to LNG remains critical to ensuring their energy security. Integrated LNG projects like the Vlora Terminal are a logical solution for meeting the urgent energy needs of Bulgaria and other Balkan and European countries linked to the Southern Gas Corridor," Oliver Simpson, commercial vice president of Excelerate Energy, said in the statement.
The agreement between the two parties comes less than a week after the US company signed a MoU with Albgaz and Italian energy infrastructure owner and operator Snam, which is a top shareholder in the Trans Adriatic Pipeline (TAP), to explore the construction of a natural gas pipeline which would link the Vlora Terminal to other natural gas infrastructure in Albania.
The MoU between Overgas and Excelerate Energy also ties in with an agreement inked in May between the Bulgarian company and Albgaz to collaborate on the future diversification of gas supply in the Balkans, with the aim of reducing the region's dependence on Russia.
Excelerate Energy has developed and operates 13 LNG terminals worldwide.
Overgas Inc is part of the Overgas Group, Bulgaria's largest private natural gas company which also owns distributor Overgas Networks that serves 81,000 end users and owns a 2,500-kilometre pipeline in Bulgaria, subject to near-term expansion plans.
Overgas Inc is currently awaiting regulatory approval to divest a 50% stake to US-based energy development company Linden Energy.