DEPA, the Public Gas Corporation, is preparing to return to the spot markets to place an LNG order after a five-year absence, a long period for an enterprise of its size.
Company officials are expected to soon begin preparations with the aim of placing spot-market LNG orders as soon as possible. This is likely to occur in the summer. The exact timing, of course, will be determined by DEPA’s gas needs. Although natural gas demand in the Greek market has slowed down amid the ongoing recession, an increasing amount of the energy source is being used for electricity production.
Although DEPA intends to head to the spot markets in search of the best possible deals, company sources are not concealing the fact that the US firm Cheniere will be favored. Primarily active in LNG-related businesses, Cheniere is preparing to enter the Greek market through LNG supply and possible investment involvement in the prospective floating LNS station in Alexandroupoli, northeast Greece.
Cheniere led the way as the US’s first exporter of US shale gas, hailing from the country’s gigantic shale gas deposits. The US began exporting shale gas last year, including to Europe and major gas traders in the UK, Spain, Italy, as well as Baltic countries such as Lithuania.
DEPA’s anticipated initial spot market order through Cheniere will not entail any long-term commitments. The establishment of a long-term contract between the two sides cannot be ruled out, but Greece’s market conditions, including commitments to other suppliers, will need to be taken into account. Price levels will also be a determining factor.
Historically, natural gas supplied through pipelines has proven to be the most competitively priced option. Current conditions have made natural gas even more competitive, especially Russian gas, according to market officials. US officials contend this can be altered through competitive LNG offers.
Whatever the outcome in the longer term, DEPA’s interest to head to the spot markets for LNG is yet another sign of the corporation’s heightening level of activity whose aim is to make the most of opportunities offered.