DEPA, the Public Gas Corporation, has reacted strongly against a move by subsidiary firm DESFA, the Natural Gas Transmission System Operator, to exclude the Greek overland segment of a Greek-Italian pipeline project from its ten-year investment program.

DESFA is expected to soon be taken over by Azeri company Socar, which holds a 20 percent stake in another regional gas infrastructure project, the Trans Adriatic Pipeline (TAP) project, at present the only project under development in the Southern Gas Corridor, linking the Caspian region with Europe.

The alternative Greek-Italian pipeline, a key project for IGI Poseidon, a joint venture comprised of DEPA and Edison, has received all required permits to proceed. It has been categorized as a Project of Common Interest (PCI) by the European Commission and has a budget worth 1.1 billion euros.

The move by DESFA to exclude the Greek-Italian pipeline project from its ten-year investment plan was described as unjustified and potentially illegal in a letter co-signed by DEPA president Giorgos Spanoudis and IGI Poseidon CEO Elio Ruggeri that was forwarded to RAE, the Regulatory Authority for Energy.

DESFA is reportedly supporting its decision to exclude the Greek-Italian pipeline from its plans on the grounds that the TAP project has been selected to service the Southern Gas Corridor, which makes development of the Greek-Italian pipeline project unnecessary. DESFA reasons that the European Commission considers the Greek-Italian project as being within a “cluster of potentially competing PCIs”.

The Greek overland segment of the Greek-Italian project, planned to stretch from Komotini in the northeast to the Thespropia region in the northwest, had been included on DESFA’s most recent ten-year agenda, even though the European Commission had already approved TAP as a PCI project.

IGI Poseidon asserts that development of the Greek-Italian pipeline project will allow for energy supply from alternative regions beyond Azerbaijan, namely the Middle East and the Mediterranean, where new deposits have been discovered, and therefore should not be considered as being a TAP alternative.