George Satlas, Executive Officer of ICGB, on the future and strategic importance of natural gas supply
When Russia attacked Ukraine, in February 2022, the idea of Europe's energy independence suddenly left the field of theoretical concepts and became a harsh reality. In Bulgaria, it was a bit harder than in most other states, as the country's supplies were heavily dependent on Russia.
However, there was a silver lining. The gas pipeline between Bulgaria and Greece was nearing completion and was later successfully launched. The gas interconnector Greece–Bulgaria, or the IGB project, connects the natural gas transmission network of Greece near Komotini with the Bulgarian transmission network near Stara Zagora. It is 182 km long and has a technical capacity of 3 bcm per year that can be increased to 5 bcm per year with the construction of a compressor station in Greece that would also allow for reverse flow.
The pipeline is a leading project for the CESEC initiative and has excellent synergy with other major projects like TAP and TANAP. It is a true game-changer for the Bulgarian energy market as it creates competition that could lead to decrease in the prices for end consumers, while also securing diversified gas deliveries in both routes and sources. As part of the Southern Gas Corridor, it enables Bulgaria and its neighbors to access supplies from the Caspian region and from existing or planned LNG terminals, thus creating new market opportunities and enhancing international partnerships in the region.
In short, IGB is vital.
With the joint efforts of the partnering countries and with the support of the European Commission, the interconnector became fully operational in October. This coincided with introducing a new Executive Officer at ICGB, George Satlas, who took the position in July. Mr. Satlas is a Machine Engineering graduate and holds an MBA. He has specialized in value investing, financial modelling and structuring; his previous professional experience is in fields such as energy, real estate, private equity, venture capital, listed and alternative investment management.
You joined ICGB in a crucial moment of its history. Why did you decide to take the challenge?
When I joined ICGB in mid-August 2022, the project was at a crucial stage, and much was at stake. It took immense efforts of the entire team to reach commercial operation for the IGB pipeline on time for the start of the heating season in Bulgaria. It was a real challenge, but I must admit that throughout my career it was mostly like that. In every new company I joined I had to "roll up the sleeves" and never look back. In that sense, it was business as usual when I was offered the position and I decided to accept without second thought, with the support of my family.
What was the biggest challenge that you faced at that moment?
The biggest challenge was how to manage the remaining activities to achieve commercial launch on time. We had to navigate through some difficulties, including such related to the differences in the legislations in two countries, the fatigue of our personnel that had to work long hours as well as the almost exhausted partner companies and pressing expectations, to be able to reach our goal. Fortunately enough, the ICGB team both in Greece and in Bulgaria was working like a well-oiled machine, as both my predecessor and my co-executive officer have made titanic efforts for this demanding project.
In 2022, even naysayers saw that Bulgaria needs the interconnector with Greece. How is currently your infrastructure operating?
As of 7 am on October 1 the pipeline and all its adjacent facilities are fully operational. I'm pleased to share that since then we haven't experienced any major technical challenges and the activities ICGB has to provide in terms of natural gas transport have been ongoing as planned. Our teams of physical and commercial dispatchers are working around the clock to secure gas flow from TAP and transportation to the existing network of the Bulgarian national operator Bulgartransgaz. ICGB's technical team is also actively involved in the day-to-day activities, together with all employees. For ICGB, getting this project to the commercial operations stage was both a professional and personal goal and the team is just as motivated for this next chapter of the IGB project.
The interconnector Greece–Bulgaria is essential for both countries on regional and national level and recently, with the ongoing war Russia waged in Ukraine, its international impact grew even larger. We've managed to secure a new, safe route for natural gas deliveries and diversified sources of supply in a time of great challenges. I strongly believe this is visible for everyone and we're no longer talking about naysayers.
What is the potential for further development?
We're already looking at further enhancing the partnership between Greece and Bulgaria in that sector with an extension of the project that would allow increasing its capacity from its current capacity of 3 bcm/y to 5 bcm/y. This can certainly be achieved, as we were informed that DESFA's investment plan for a compression station in Komotini was approved and will happen shortly after the expected commercial launch of the LNG terminal in Alexandroupolis.
With this next phase of the project, the volumes of natural gas IGB could be transporting will see a significant boost and more countries in Central and Southeastern Europe could benefit from that. As I'm sure you're aware, through the already existing infrastructure IGB could be used for gas transportation not only to neighboring countries, but also to the Western Balkans and Moldova and Ukraine as well. In fact, as of December 1 we’re already transporting natural gas to Moldova, securing a new safe route for the winter season. The IGB project is directly connected to TAP and is part of the Southern Gas Corridor and the Vertical Gas Corridor, which makes it an essential element on the region's energy map.
Who are your main clients nowadays?
Over half of IGB's capacity of 3 bcm/y has already been booked under long-term contracts of up to 25 years. Some of the shippers are entirely new to the Bulgarian market, which is further proof of the significance of this project for our team and our countries. As you know, the full volumes of natural gas Bulgaria has booked under its long-term contract with Azerbaijan are being transported via the IGB. Companies from Italy, Greece and the US have also booked capacity. The remaining free capacity, which doesn't fall under the so-called exemption decision, is being offered transparently on two major European platforms where all interested parties are able to reserve capacity.
The start of the operations of ICGB immediately affected the prices in Bulgaria. What other strategic advantages does the project have for Bulgaria?
The pipeline's commercial launch on October 1 had truly a significant impact that was directly felt by the end consumers and this was a key part of ICGB's motivation to do everything possible to achieve the start of commercial activities in line with the new heating season. Ensuring a new, safe route for diversified deliveries is of major importance for all of Europe right now.
The international relevance aside, the IGB pipeline also has a strong regional significance, as it creates the possibility of access to a gas transmission network for several Bulgarian and Greek municipalities and regions that until now did not have an option for connectivity. We've been cooperating with all interested parties in that regard, and we've already signed an agreement that would allow connecting ICGB's network with that of the regional provider of natural gas for the region of Kardhzali. Our team used to often say that upon completion, this project will be a game changer for the energy map of the region on a local and larger level and now we get to see this actually happening.
Are you looking for suppliers other than Azerbaijan?
Naturally, all interested parties can book capacity in the pipeline – as I've already mentioned the process is open and transparent for all shippers. So definitely we are looking for more suppliers, as our duty is to maximize capacity of the pipeline and efficiently serve our clients. The upcoming LNG facility in Alexandroupolis is a great opportunity for ICGB, as the advantage of such suppliers is the independence of the source, as the saying goes that LNG shippers have no "home-country".
What makes natural gas a competitive energy source?
As a naturally occurring fossil gas, natural gas is a cleaner energy source compared to other fossil fuels such as coal and diesel. Thus, it makes the best fit for a sustainable renewable energy transition in any country around the globe. Its competitiveness towards other fossil fuels and its ability to aid the integration of renewables adds to the competitiveness of natural gas as an energy source.
What is the future of the global energy market, in your opinion?
It is evident that after the COVID-19 pandemic, an economic rebound has triggered price spikes for multiple commodities. Moreover, the war in Ukraine has led to even further increasing energy prices and security-of-supply concerns. However, the transition to a lower-carbon energy system continues and accelerates, and what I would expect for the coming decades is that we will likely see a rapidly-changing energy landscape, helped with the support of improvements in relevant technology.
What is the single most important thing that you want people in Bulgaria to know about the project?
The single most important thing that people in Bulgaria should recognize in this project is the fact that it stands for unity, enhanced connectivity and energy independence. The completion of the project with the active involvement of both host countries, our international partners and the European Commission is a clear proof that united we can succeed, no matter the obstacles. An international EU funded project of significant geopolitical importance is now a reality for Bulgaria – and it could be just a forerunner for other projects to come. Can people in Bulgaria capitalize on it? Definitely, and that should be the way forward for the common good.
What are your goals, as a manager, for 2023?
Expanding a bit on the message I shared during IGB's launch, my goals as a manager for 2023 are trifold. Firstly, secure operations for our personnel, infrastructure and the environment. Secondly, effectively move on transforming the organization from a Project Management company to a Transmission Operation company, as we are currently in the first steps of this new era. Last and more important, comes the focus on our most valuable asset, Human Capital. For our progress and as we need to be able to collaborate more efficiently inside and outside our organization, taking advantage of the available technology and adapting it to our everyday work will offer the extra mile towards smooth and seamless operations.