Energy issues not a top priority for Putin visit to Athens

Officials in Athens and Moscow preparing the agenda for Russian President Vladimir Putin’s upcoming visit to the Greek capital, scheduled for May 28, are not setting energy issues as a top priority.

Naturally, this does not mean that Moscow’s latest natural gas pipeline proposal for Europe’s southeast, intended to cross Bulgaria, Greece and Italy, will not be raised by the visiting Russian delegation. This latest alternative is being viewed more favorably in Europe than last year’s Turkish Stream as it does not pass through Turkey.

Although Athens will reiterate its plans for a multidimensional energy policy, which includes Russia as a source, it will maintain a mild stance to avoid upsetting the country’s lenders and the USA at a critical point in time when their support is crucial amid the effort to complete the first review of Greece’s third bailout package. Support is also needed as a result of the increasing number of Turkish violations of Greek airspace above the Aegean.

As for Russia, the country has other energy priorities, besides the Southern Corridor, such as Nord Stream 2, a natural gas pipeline plan with a 55 billion cubic meter capacity intended to carry natural gas through the Baltic Sea to Germany. The plan, budgeted at 10 billion euros, has divided European opinion.

The leaders of eight European countries in the east – Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia, Romania, and Lithuania – clearly oppose an extension of Nord Stream, contending it will increase the EU’s energy dependency on Russia.

Russia is backing the plan, noting it will bypass Ukraine and therefore avoid transit fees as well as political wrangling, which has affected Russian natural gas exports a number of times in recent years.

Considering all the above, Greece and Russia may sign a declaration of mutual cooperation for the energy sector on May 28, which, in actual fact, will not represent anything groundbreaking. Not because both sides are not keen to further develop their ties, but as a result of the political expediency offered to both by restraint, given the current set of respective factors for each.

Over the past eight months or so, the Greek government has redirected the country’s energy interests. It has stepped back from an intention to widen ties with the east and, once again, looked to the west and the US-influenced sphere.

Greece is now focused on the construction of the TAP (Trans Adriatic Pipeline) project, planned to carry 10 billion cubic meters of natural gas, annually, from Azerbaijan to central European countries via Turkey, Greece and Italy, as well as the Greek-Bulgarian IGB interconnector, to connect with TAP’s Greek segment and supply the Balkan region.

Yesterday, DEPA, the Public Gas Corporation, announced that nine non-binding bids were made for the first stage of an IGB market test. The development prospects for the IGB pipeline project will be solidified if this level of interest is maintained in the market test’s next stage, when binding offers will be submitted by potential pipeline users.

According to sources, the Russian agenda for Putin’s upcoming visit will include Gazprom interest for establishing partnerships with PPC, the main power utility, as well as commercial trade plans between Russian petroleum giant Rosneft and ELPE (Hellenic Petroleum). Scenarios alleging Gazprom’s interest for a stake in DEPA and Rosneft’s equity interest in ELPE seem far off at this stage.