Officials at Greece’s Environment and Energy Ministry are working on a plan that aims to synchronize the development of the Greek-Bulgarian IGB natural gas interconnector and the floating LNG station in Alexandroupoli, northeastern Greece, believing one will benefit the other.
The effort is being made as Bulgarian energy minister Temenuzhka Petkova prepares to make an official visit to Athens to take part in a meeting to focus on the floating LNG station in Alexandroupoli. Officials representing all enterprises interested in the project – the US energy company Cheniere, DEPA, the Public Gas Corporation, Bulgargaz, the Bulgarian state-run gas company, and Gastrade, a member of the Copelouzos corporate group – will all take part in the Athens meeting.
The Bulgarian government appears to have decided it wants to take part in the LNG station’s development.
Should the Alexandroupoli LNG station’s development proceed, a consortium of five partners will reportedly be established for its construction, each holding 20 percent stakes. Cheniere, a second unnamed US firm, which has demanded to remain anonymous for the time being as it is listed, DEPA, Gastrade, and Bulgargaz are believed to be the five firms involved in the plan.
According to sources, the Former Yougoslav Republic of Macedonia (Fyrom) recently also expressed an interest in the LNG station’s development.
As for the IGB interconnector, it has become clear to both Greek and Bulgarian officials that its feasibility depends on the extent to which the infrastructure project’s capacity can be covered. This detail will soon be determined in the market test’s next stage, when gas traders will be invited to submit their binding offers reserving capacities. It has also become clear that a floating LNG terminal in Alexandroupoli will be meaningless without a co-existing IGB interconnector.
Meeting the required level of capacity to be reserved by natural gas traders for the IGB project will also need to be followed up by actual demand from customers who will purchase these amounts. If this does not occur, the project will not be sustainable.
The IGB market test’s first stage, completed on April 8 and held to establish an estimate of the total capacity required by traders, produced offers amounting to over four billion cubic meters per year, well over the 1.7 billion cubic meters needed to make the project sustainable.
Half of the capacity amount declared was made by Gastrade (2 billion cubic meters). Interest was also expressed by Bulgaraz – it has signed a deal to import one billion cubic meters of natural gas from the Shah Deniz II deposit as of 2020 – DEPA (200 million cubic meters), Italy’s Edison (a similar amount), Socar (roughly 250 million cubic meters), and the UK’s Noble Clean Fuels, which trades natural gas and is focused on the Ukranian market, which it supplies via Slovakia.
An agreement in Athens at the upcoming meeting for the Alexandroupoli LNG station promises to propel the IGB interconnector’s development. In this case, the capacites indicated in the market test’s first stage are likely to be repeated as binding offers in the second stage.