Fyrom turns to Albania for gas supply amid Greek delays

The Former Yugoslav Republic of Macedonia (Fyrom) has turned to Albania to cover its natural gas needs as a result of Greece’s failure to deliver on an agreement reached between the country’s gas grid operator DESFA and MER Skopje two years ago for the development of a pipeline interconnection linking the gas grids of the neighboring countries.

Local licensing procedure delays have been cited as a key reason behind Greece’s lack of action. RAE, Greece’s Regulatory Authority for Energy, has yet to offer its approval for the project. Also, the matter has been further complicated by an initiative from Russian entrepreneur Leonid Lebedev’s Windows International Hellas for a license to construct a natural gas pipeline from Thessaloniki to Fyrom.

Last week, Albagaz and MER Skopje signed a Memorandum of Understanding, intended to promote a gas grid interconnection plan linking Fyrom and Albania, at a ceremony in Tirana that was attended by ministers of both countries.

The bilateral pipeline plan entails branching off gas quantities from the TAP line – running through Albania and northern Greece – into the Fyrom market. Though a Fyrom-Albania investment plan is still a long way off, both sides have agreed to seek financing through EU funds.

Pundits and investors in Greece have warned that the country now stands a big chance of missing out on a major opportunity to supply gas to the Fyrom market.

DESFA plan for TAP maintenance in Greece, Albania progressing

Talks between DESFA, Greece’s gas grid operator, and the TAP consortium concerning a prospective agreement offering operating and maintenance responsibilities of the pipeline’s segment running through Greek territory to the operator have entered the final stretch following a period of stagnancy, caused by a leadership change at TAP during the summer, sources have informed.

The operating and maintenance agreement between DESFA and the TAP consortium is expected to soon be signed, the sources added.

At the same time, legal and procedural matters concerning the establishment of a joint venture involving DESFA and Albania’s Albgaz to take on operating and maintenance duties for the TAP pipeline’s Albanian segment are gradually being resolved, the sources said.

As part of this arrangement, DESFA is expected to provide knowhow and training to the Greek-Albanian joint venture, whose headquarters are planned to be based in Tirana. A working group is believed to be currently examining the make-up of this new company.

Currently being constructed, the TAP pipeline, to cover 878 kilometers, will run through Greece’s north, Albania and across the Adriatic Sea to Italy, transporting natural gas from the giant Shah Deniz II field in Azerbaijan to Europe.

DESFA, Albgas to assume TAP duties on Albanian territory

A prospective joint venture involving DESFA, Greece’s gas grid operator, and Albania’s Albgas will assume the operational and maintenance duties for the TAP gas pipeline segment crossing Albanian territory, according to energpress sources.

DESFA officials are expected in Tirana today to sign related agreements. The TAP pipeline will run through northern Greece, Albania and across the Adriatic Sea to Italy for delivery of natural gas from the Caspian region to Europe.

The same sources noted that DESFA will sign an MOU following the Easter break with Bulgartransgaz, Bulgaria’s gas operator, as well as Romania’s Transgaz and Hungary’s FGSZ to push ahead the development of the Vertical Corridor. Ukraine’s Uktransgaz has also expressed interest in this project.

Last September, the Greek, Bulgarian, Romanian and Hungarian gas operators, along with ICGB – a 50-50 joint venture involving Bulgarian state-run company BEH and Poseidon (DEPA, the Public Gas Corporation, and Edison, formed for the prospective Greek-Bulgarian IGB natural gas pipeline – signed a joint declaration pledging to intensify their efforts for the development of the Vertical Corridor at technical and regulatory levels.

The IGB pipeline is planned to be incorporated into the Vertical Corridor. The Vertical Corridor, to provide a northbound natural gas transit route from Europe’s southeast, including Greece, is planned to connect with the TAP pipeline.

The Vertical Corridor may also be linked to Greece’s LNG terminal on Revythoussa, an islet just off Athens, whose capacity is being increased, and, as a result, will offer southeast European countries access to LNG.

DESFA is also pressing ahead with preparations for the establishment of a wholesale trade gas hub. A plan for this venture, commissioned to Belgium’s Fluxys, has already been completed. Fluxys is now preparing plans to establish a platform for gas auctions, expected in 2018.

Also, a feasibility study for a 160-km gas pipeline linking Thessaloniki with Stip, in the Former Yugoslav Republic of Macedonia (Fyrom), is being carried out. An MOU for this project plan has been signed between DESFA and Fyrom’s MER.

This project would provide Fyrom with direct access to the Revythoussa LNG terminal. It could also facilitate a link for Fyrom’s gas network with the TAP pipeline.