The Black Sea Trade & Development Bank (BSTDB) will make available US$17mn to finance development of the Galata Gasfield, located in the Black Sea offshore close to Varna in Bulgaria. The gasfield contains at least 1.4bn cubic meters (m3) of proven gas reserves. The extracted gas from Galata field will be mainly consumed in Bulgaria, with a possibility to export it to the neighbouring countries in the future.

The project total cost is around US$71mn. The financing of the project involves BSTDB senior secured loan of up to US$17mn, and the IFC’s parallel loan of the same amount, with the rest of financing to be covered by private investors.

The BSTDB and IFC loans with maturity of five years will be provided to Petreco Sarl (Luxemburg) and Petreco EOOD (Bulgaria), which are 100% subsidiary companies of Melrose Resources plc (UK), an independent energy company engaged in the exploration and production of oil and natural gas. The loans will be repaid by the proceeds generated by the gas sales to Bulgarian companies.

The Galata project contributes to implementation of the BSTDB mandate in the Black Sea region. It will have direct development impact in Bulgaria, as well as a regional co-operation fostering effect Ukrainian and Greek companies have already been selected as suppliers for the project.

Robert Adair, executive chairman of Melrose Resources plc, comments, “We are excited about the development of the Galata Field. This will be a culmination of our efforts in Bulgaria over the last three years and is testament to our commitment to the country’s gas sector. We have greatly benefited from the BSTDB and IFC involvement by drawing on their expertise in the oil and gas sector. This financing and association with BSTDB and IFC will not only help complete our current projects but also reflect their confidence in Melrose as a growing and capable energy company.”

The BSTDB is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine. With an authorised capital of SDR1bn (US$1.3bn), the bank supports economic development and regional co-operation by providing financing, guarantees, and equity for projects in public and private sectors in its member countries. Since the commencement of operations in 1999, the BSTDB’s board of directors has approved about 50 operations totalling over US$415mn.