The development prospects of the LNG floating station in Alexandroupoli, northeastern Greece, gained further ground yesterday as a result of firm support offered by Bulgarian energy minister Temenuzhka Petkova, who noted that her country is interested, as well as officials at Cheniere, the US firm primarily active in LNG-related businesses, who clearly backed the project under the condition that LNG buyers have been previously secured.
The supportive comments were made on the eve of today’s ceremony in Thessaloniki to launch construction work for the Greek segment of TAP (Trans Adriatic Pipeline).
At a meeting held yesterday, Greek energy minister Panos Skourletis, joined by Petkova, Cheniere representation, as well as officials from DEPA, Greece’s Public Gas Corporation, Bulgarian Energy Holding, and Gastrade, a Copelouzos corporate group company, all reiterated their willingness to press ahead with the LNG floating station in Alexandroupoli, and agreed on a road map, according to energypress sources.
Its schedule sets the current year’s final quarter as a deadline for an investment decision, the objective being to have constructed the floating station by the end of 2018.
Highlighting Bulgaria’s interest in the project, a 14-member delegation took part in yesterday’s meeting. Cheniere was represented by three officials.
Though all parties linked to the Alexandroupoli LNG station’s development have clearly expressed their interest, further time is needed to synchronize this project with the Greek-Bulgarian pipeline, the IGB interconnector, as the two projects are interdependent.
The IGB pipeline would not be feasible without a floating LNG station, while the Alexandroupoli LNG project would be meaningless without the IGB. Not surprisingly, Gastrade, which is promoting the investment plan for the Alexandroupoli station, forwarded the biggest IGB capacity offer during a non-binding, first-round market test. Gastrade submitted an offer for two billion cubic meters, annually, of five billion cubic meters available. This level of interest will need to be confirmed in the market test’s upcoming second round, when traders must submit binding offers. A minimum of 1.7 billion cubic meters will need to be submitted to make the IGB project feasible.
Skourletis yesterday announced that the deadline will be shifted from the summer to September. During this additional time, certain LNG station procedures will be completed. The slight change of schedule is intended to keep the progress of the two projects synchronized.
If Cheniere, DEPA, Bulgarian Energy Holding and Gastrade reach a final agreement to develop the LNG floating station, then Gastrade will submit a binding order to reserve IGB capacity.
“Greek and Bulgarian government support is certain and, subsequently, everything indicates that the IGB project will be developed,” Skourletis remarked yesterday.
The IGB pipeline project’s budget is estimated at 220 million euros. The Bulgarian government has already offered state guarantees covering half the amount. The European Investment Bank is expected to contribute to the project’s financing. The IGB’s Bulgarian segment is planned to cover 151 kilometers, while the Greek section will run for 31 kilometers. A tender could be announced before the end of this year if a final development decision is reached by autumn.