Saudi-led group offers lowest price to build gas pipeline in Bulgaria.

A consortium of Saudi Arabia's Arkad Engineering and a Milan-based Arkad-ABB joint venture has filed the lowest bid to build a pipeline that will carry Russian natural gas across Bulgaria, state network operator Bulgartransgaz said on Friday.

Bulgaria is rushing to build the 474-km (294-mile) pipeline to link its southern border with Turkey to its western border with Serbia, aiming to secure a link to the Russia-backed TurkStream twin pipeline to Serbia and Hungary.

The Saudi-led group offered to construct the pipeline by the end of 2020 for 1.1 billion euros ($1.2 billion). Its alternative offer, to build it in eight months, stood at 1.29 billion euros, Bulgartransgaz said upon offering the bids.Three groups filed offers for the gas link earlier this month.

A consortium including Italian energy contractor Bonatti, German construction company Max Streicher and a Luxembourg-registered firm owned by Russia's TMK TRMK.MM , offered to build the gas link for 2.4 billion euros by the year-end, or for 1.69 billion euros by the end of 2020.

Bulgartransgaz said the third bidder, comprised of companies that are part of Hungary's oil and gas group MOL, did not meet the tender requirements.

"We will look carefully into the offers and will come up with a decision early next week," said Vladimir Malinov, Bulgartransgaz chief executive, adding that the lowest offer was within its estimated cost.

Russia, which is building TurkStream to bypass Ukraine, has said it would need guarantees from the European Union that Brussels would not oppose extending one of the legs of the 15.75 billion cubic metre pipeline via Bulgaria.

Bulgartransgaz plans to provide an advance payment of 250 million euros to the winner and make instalments for the remaining costs under a 10-year payment plan.

Both bidders have agreed to take re-scheduled payment, with the Saudi tie-up offering a price increase of 4 percent and the group led by Bonatti offering a top-up ranging between 7 and 9 percent. ($1 = 1.7420 leva)

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