The decreased demand for natural gas in the Greek market is intensifying, a trend largely driven by the drastic slowdown in economic activity, spurred by prolonged uncertainty and the ongoing recession. Contrary to the trend, stronger demand had been forcast as a result of lower gas prices.
After plummeting by 25 percent in 2014, compared to 2013, and 8 percent in the first three-and-a-half months of 2015 compared to the equivalent period in 2014, demand for gas has fallen by 15 percent in the current year’s first half compared to last year’s figure for the time period.
The first-half overall decline in national gas demand would have been even greater if demand had not remained relatively firm in the industrial sector and urban gas networks did not register significant increases during the first quarter as a result of extended cold weather.
According to data provided by DESFA, Greece’s natural gas grid operator, the country absorbed 14.84 million MWh of natural gas, roughly 1.3 billion cubic meters, during the first half of 2015, compared to 17.46 million MWh, or 1.5 billion cubic meters, in the equivalent period of 2014. Going back to 2010, the level stood at 1.7 billion cubic meters for that year’s first half. (One MWh of natural gas measures approximately 86.5 cubic meters).
The absorption of LNG at the terminal in Revythoussa, an islet in the Saronic Gulf, close to Athens, reached 5.17 million MWh, approximately 445 million cubic meters, in the first half of 2015, a 32.7 percent year-on-year increase. Besides DEPA orders, these figures include three shipments made by M+M, a Motor Oil and Mytilineos venture.
The biggest natural gas decline was registered through the grid’s entry point at Sidirokastro, on Greece’s northern edge, where Russian natural gas inflow was restricted to roughly 600 million cubic meters in the first half of 2015, from 900 million cubic meters in the equivalent period of 2014, a 34.2 percent decline.
This development makes more difficult DEPA’s negotiating position for softer repercussions resulting from a misjudged take-or-pay deal with Russia’s Gazprom.
The inflow of Azeri gas, supplied by Turkey’s BOTAS through an entrance point in Evros, northeast Greece, decreased more modestly, by 11.3 percent. The amount absorbed from this channel fell to about 250 million cubic meters in the first half of 2015, compared to 283 million cubic meters in the equivalent period a year earlier.
As noted above, the decline in overall natural gas demand could have been even steeper had it not been for increases in the urban areas of Athens and Thessaloniki during the heavy and extended winter season. In the wider Athens area, natural gas demand for heating purposes increased by 34 percent, year-on-year, in the first half of 2015. The increase reached 33 percent in Thessaloniki. In the first quarter alone, demand rose by 41 percent in the wider Athens area and 37 percent in Thessaloniki.
As for other applications, demand for natural gas used to produce electricity was down by as much as 50 percent at most power stations. A new facility operated by main power utility PPC in Aliveri, Evia, Greece’s second largest island slightly northeast of Athens, was an exception, registering a 41.6 percent increase in gas consumption.
Industrial units in Inofyta, just north of Athens, registered a regional gas demand increase of 6 percent (517,000 MWh). Industrial demand in Kilkis, northern Greece, rose by 10.3 percent (152,177 MWh), and 44 percent in Drama, also in the north.
Demand at refineries operated by Motor Oil dropped sharply, by 50 percent, to 837,000 MWh. Gas demand in the aluminium sector increased by 2 percent, to 398,000 MWh.