Gas infrastructure being planned and developed at Alexandroupoli, on the edge of northeastern Greece, offers potential to establish this provincial city as a regional gas hub in southeast Europe that will facilitate gas trade and shape regional gas prices.
Gas quantities of between 20 and 30 bcm are expected to be attracted to the region by FSRUs, gas pipelines and a vertical pipeline corridor, covering the wider region.
However, the effort to establish a gas hub in this specific region faces many challenges. Besides bringing in large gas quantities and offering competitive prices as well as high liquidity, all needed to lure players from other hubs and neighboring markets, the region also requires a major reinforcement of the transport system, along with a significant increase in the capacity of the recently launched Greek-Bulgarian IGB gas pipeline.
The absence of a gas hub in southeast Europe and the prospective accumulation of quantities up to 30 bcm in Alexandroupoli offers great potential for the provincial Greek city, as was pointed out by a leading energy ministry official during last weekend’s launch of a new power station in the area.
Attracting significant gas quantities to the location is a first step. It must be followed up by the establishment of a gas spot market in Greece, one capable of increasing interconnectivity in the southeast European market.
Greece promises to serve as an entry point for the aforementioned natural gas vertical corridor, to run through Bulgaria, Romania, Hungary, Ukraine and Moldova.
This project, to utilize existing infrastructure combined with new infrastructure, will incorporate the Trans Balkan Pipeline, which transported Russian gas to southeast Europe via Ukraine for thirty years and is now set to operate with gas flow in the opposite direction.