Alexandroupoli FSRU

North Macedonia involvement in key Alexandroupoli projects

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North Macedonia plans to help cover its energy needs through an involvement in two Greek-based projects, the prospective FSRU in Alexandroupoli, northeastern Greece, and, in the same region, a gas-fueled power station to run on LNG stemming from the floating LNG terminal.

Much progress has been made on the neighboring country’s interest in these two projects since a meeting in Athens last September between Greek Prime Minister Kyriakos Mitsotakis and his North Macedonian counterpart Zoran Zaev. The partnership also represents a strategic decision for the Greek government.

It is considered certain that a state-owned North Macedonian company will soon enter the Alexandroupoli FSRU project’s equity pool with a 10 percent stake, energypress sources have informed.

This project’s five current partners – Copelouzos group, Gaslog, Greek gas utility DEPA, Greek gas grid operator DESFA and Bulgartransgaz – are expected to each offer small portions of their respective 20 percent stakes to make available a 10 percent stake for the state-owned North Macedonian company in the Alexandroupoli FSRU.

The project’s development is not expected to be impacted by any equity reshuffles.

Two international tenders staged by Gastrade, a company established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, have been successfully completed. One of the two tender concerns the FSRU’s construction. The other concerns the installation of pipelines linking this facility to the national gas grid.

The Alexandroupoli FSRU consortium is expected to make a final investment decision in late February, sources informed.

On the other front, ESM, North Macedonia’s state electricity company, is expected to acquire a 25 percent stake in a gas-fueled power station to be developed by Damco Energy, a Copelouzos group subsidiary, in Alexandroupoli’s industrial zone.

The initiative will secure 200 MW of the facility’s 800-MW capacity for North Macedonia. The country currently has an electricity deficit of approximately 2 GWh.

Bulgarian state-owned electricity company NEK EAD also appears interested in acquiring a stake in the Alexandroupoli power station. Bulgaria has projected an electricity deficit a few years from now as the country must phase out major lignite-fired power stations. European Commission exemptions extending the lifespans of these units are expiring.

North Macedonia eyeing 25% stake in Alexandroupoli gas facility, PM says

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North Macedonia may participate with a 25 percent stake in a natural gas facility in Alexandroupoli, northeastern Greece, that promises to offer a production capacity double the size of the country’s gas shortage, totaling 2 GWh, North Macedonian Prime Minister Zoran Zaev has told state broadcaster Alsat.

Also, bureaucratic procedures concerning the development of a natural gas pipeline from Greece to North Macedonia are close to being completed, while talks with Okta, a Hellenic Petroleum (ELPE) subsidiary, for a relaunch of the company’s oil pipeline running from Thessaloniki to Skopje are continuing, Zaev noted.

The North Macedonian leader also expressed an interest for the country to participate as a shareholder in the company to develop the Alexandroupoli FSRU, noting the country plans to utilize natural gas for all state facilities as “American LNG is far cheaper”.

The Alexandroupoli FSRU is expected to facilitate supply of American LNG to the Balkan region.

DEPA Commercial to enter RES field, starting with 200-MW goal

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DEPA Commercial, the new entity emerging from gas utility DEPA, will enter renewable energy production as part of the company’s transformation from a gas to energy company, its administration has decided.

The firm has already held talks with green energy players with the aim of involving DEPA Commercial in solar and wind energy projects about to enter the construction stage or already being constructed, sources informed.

An initial objective for the accumulation of a green-energy portfolio comprising approximately 200 MW has been set by the company, sources added.

Careful steps are being taken in the RES sector, Dr. Konstantinos Karagiannakos, the company’s Coordinating Director of Trading Activities, recently noted.

Having lost a steady and reliable market share in gas distribution, a sector that guaranteed DEPA annual profit of about 25 million euros, DEPA Commercial is now eyeing new activities and revenues from domains that offer more consistency than trade, entailing higher risk.

Besides the RES sector, DEPA Commercial’s lower-risk approach has also led to an interest in the prospective Alexandroupoli FSRU in northeastern Greece.

The company is also broadening its activities to cover gas supply for the industrial sector and customers in areas without gas networks, through small-scale LNG and remote CNG solutions, as well as the gas-run vehicle market through the development of a nationwide network of refueling stations.

In addition, the company is also making plans to enter eco-friendly alternative fuel markets such as hydrogen and biomethane.

 

DESFA, seeking leading role, awaits RAE approval of investment plan

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Gas grid operator DESFA’s majority stakeholder Senfluga – a consortium comprising three European operators, Snam, Fluxys and Enagas, as well as Greek energy company Damco – holding a 66 percent stake in the former state-controlled utility – is striving for extroversion and a leading market role in Greece’s post-lignite era.

As was recently indicated by DESFA’s chief executive Nicola Battilana, the company is striving to push ahead with major investment plans to bolster the role of natural gas as a transitional fuel towards climate-neutral energy systems, and also upgrade Greece’s geostrategic role in the southeast Mediterranean.

DESFA’s investment interest very much depends on the position to be adopted by RAE, the Regulatory Authority for Energy, on projects of national significance. The gas grid operator anticipates the authority will approve, within the next few days, its ten-year development plan covering 2021 to 2030, worth 500 million euros.

The gas grid operator is looking for swift approval of the plan. Fast action would help the country’s climate-change objectives set by the Greek government.

Besides the Greek market, DESFA is also seeking to generate revenue through various projects abroad. DESFA is expected to be declared the winning bidder in a tender for the maintenance and operation of a Liquefied Natural Gas Import LNGI facility developed in Kuwait by state-run KIPIC.

DESFA is also working on a series of other interests, including becoming the fifth member of a team behind the Alexandroupoli FSRU project, a floating LNG terminal envisaged for Greece’s northeast. This FSRU, geostrategically significant for Greece, promises alternate LNG supply to the Balkans.

Project licensing preparations are also being made by DESFA for a pipeline interconnection to link Greece and North Macedonia. The operator anticipates a market test co-staged by DESFA and MER, the neighboring country’s gas grid operator, will produce favorable results.

Other project plans at DESFA include gas grid expansion in Greece’s west Macedonia region, to facilitate the entry of natural gas where lignite has dominated as an energy source.

DESFA one step away from Alexandroupoli FSRU entry

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Just days after the entry of Bulgaria’s Bulgartransgaz, Greek gas grid operator DESFA appears set to become the fifth member of Gastrade, the company established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal envisioned for Greece’s northeast.

Talks concerning a DESFA entry, ongoing since the beginning of this year, have essentially concluded, while an announcement of the operator’s entry into Gastrade’s line-up is expected soon, no later than the end of September, energypress sources informed.

DESFA’s interest to join the consortium for the Alexandroupoli FSRU project, the first ever private-sector plan for such infrastructure in Greece, reflects the intention of the company’s new ownership and administration to broaden DESFA’s role from gas grid operator to a major player in Greece’s natural gas market.

As for Gastrade, keen to establish partnerships that support its strategic objectives, DESFA’s expected entry into the Alexandroupoli FSRU consortium appears to have been encouraged as a result of the operator’s knowhow, as a TSO, in LNG and the Greek gas market, its players, as well as the legal framework.

DESFA’s entry would also give the Greek State a stake in the Alexandroupoli project, supported for years by the previous and current Greek governments.

Besides the Copelouzos group, holding a 40 percent stake, the Gastrade consortium is currently also made up of Gaslog, Greek gas utility DEPA, and Bulgartransgaz, each holding 20 percent stakes. The entry of a fifth member will give all partners equal 20 percent shares.

The project, budgeted at 380 million euros, is expected to be launched no later than early 2023.

The Alexandroupoli FSRU, along with the existing Revythoussa islet LNG terminal just off Athens, are crucial given the current strains in Greek-Turkish relations as the two units represent the country’s only gas infrastructure not relying on Turkish territory.

The LNG terminals also promise to increase competition in the regional market and reduce natural gas supply costs to neighboring countries.

A market test was successfully completed for the Alexandroupoli FSRU in March.

Alexandroupoli FSRU investment decision later in ’20

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Investors behind the Alexandroupoli FSRU are expected to make final decisions on the project’s development in the final quarter of this year.

Two pending issues, the completion of a regulatory framework for the project, as well as approval by the European Commission’s Directorate-General for Competition of the project and funding via the National Strategic Reference Framework (2014-2020), are expected to be resolved by the final quarter.

Also, RAE, the Regulatory Authority for Energy, is soon expected to reach a preliminary decision exempting the FSRU from compulsory access to third parties as well as tariff adjustments every three to four years. This decision, needed for the project’s regulatory framework, is expected by late October or early November, when the European Commission’s approval is anticipated.

The Directorate-General for Competition will also need to give the green light for NSRF funding.

Once these pending issues are all resolved, investors will be able to decide on the project’s development, expected to require two years to construct. Investors envision a launch in 2023.

Yesterday’s anticipated entry of Bulgartransgaz, for a 20 percent stake, highlights the project’s regional prospects. This regional dimension will be highlighted even further if ongoing Romanian interest is materialized.  Talks that have been going on for some time were disrupted by the pandemic.

For the time being, Greek gas utility DEPA, Gaslog and Bulgartransgaz each have 20 percent stakes, while the Copelouzos group holds a 40 percent share. The entry into the project of Gastrade, as a fifth partner, remains pending.

Most crucial for the project’s prospects, a market test completed in March showed that the Alexandroupoli FSRU is sustainable. The test prompted a big response from Greek and international gas traders, who placed capacity reservation bids for a total of 2.6 billion cubic meters per year.

US interest for LNG supply via the Alexandroupoli FSRU is strong. Last year, Cheniere sold a big shipment to Greek gas utility DEPA, while a further ten American shipments have been made so far this year.

US investments in Greek RES sector rising, LNG imports up

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New US investments in Greece’s RES sector are on the rise, the energy ministry has stressed following a meeting yesterday between Greek energy minister Costis Hatzidakis and the U.S. Ambassador to Greece, Geoffrey Pyatt, for a discussion on major energy project plans in the wider region and the related American investment activity.

U.S. companies such as ONEX, Black Summit, with support from DFC (International Development Finance Corporation), Quantum Energy Partners, National Energy, General Electric, Fortress Investment Group, Blink and Tesla are all currently pursuing investments in the Greek market.

Hatzidakis, the energy minister, expressed satisfaction over the level of foreign investments in Greece, noting U.S. participation has significantly increased, especially in the energy sector.

Last month, 547 Energy, an American renewable energy venture backed by Quantum Energy Partners, participated for a third time in a row in a RES auction staged by RAE, the Regulatory Authority for Energy, adding 107 MW in wind energy capacity to its Greek portfolio for a current tally of eight RES projects and 390 MW, the energy ministry noted.

National Energy is drawing American funds to develop wind and solar energy projects in Greece with a total capacity of 270 MW, the statement added.

Also, the energy ministry noted, General Electric has supplied equipment for a wind energy farm in Fokida, west of Athens, a project being partially financed by the Fortress Investment Group; Blink recently began an investment plan in the electromobility sector, for rechargers and other equipment; while Tesla, a producer, amongst other things, of electric vehicles, recently announced a plan to expand its operations into Greece.

During their meeting, Hatzidakis and Pyatt also discussed the partnership between Greece, Cyprus and Israel, plus the U.S.

The progress of work at the Greek-Bulgarian IGB gas pipeline, whose geostrategic importance was stressed by the Greek minister, was also addressed. A closer association with Bulgarian contractors is being sought for the project’s punctual delivery.

Work on the Alexandroupoli FSRU in northeastern Greece is progressing at a satisfactory pace, the two officials agreed, noting the project will have a positive impact on geostrategic and energy matters.

The U.S. supplied nearly half of the 2,651,903 cubic meters of LNG imported into Greece in the first half of 2020, almost quadruple the amount supplied by America to Greece during the equivalent period a year earlier.

Bulgaria gas pipeline explosion highlights need for local projects

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Yesterday’s Bulgarian gas pipeline explosion in Bulgaria, prompting a supply cut into Greece from a northern route, yet again highlights how vital it is for Greece to develop two gas infrastructure project plans in Alexandroupoli, northeastern Greece, and Kavala, in the north.

The explosion of this pipeline, carrying Russian gas into Greece via Bulgaria, has not affected Greece’s energy security as supply from the alternate Kipoi route remains uninterrupted, while the contribution of high LNG reserves at the Revythoussa terminal, just off Athens, has also been crucially important.

However, a Greek energy crisis could have resulted if this accident were more serious, or if the Revythoussa facility did not exist, or, worse still, the accident coincided with even greater Greek-Turkish tensions than at present, which could have meant a cut in gas supply from Turkey, hosting one of Greece’s key gas import corridors.

The intensifying geopolitical instability of the wider region, which includes Turkey, an extremely troubling neighbor, makes imperative the existence of sufficient gas storage facilities to safeguard Greece’s energy security. Despite the precarious conditions in the region, Greece remains one of the European countries without sufficient energy storage infrastructure.

In addition to the existing Revythoussa LNG terminal, Greece’s infrastructure definitely needs to be reinforced by projects such as the Alexandroupoli FSRU and an underground gas storage facility at a virtually depleted offshore deposit south of Kavala.

 

US backs Greece’s east Mediterranean activities, major projects

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All countries in the east Mediterranean region must carry out their activities in accordance with international law, including the International Law of the Sea as stipulated by the 1982 United Nations Convention on the Law of the Sea, the Greek and US governments have jointly announced following a high-level virtual conference held yesterday on energy issues.

This statement clearly offers US support for the positions of Greece, facing Turkish provocation.

The working group’s participating Greek and US officials reiterated the commitment of the two countries to cooperate on the effort to diversify energy sources in southeast Europe, collaborate with regional partners for energy source development, and promote regional energy security.

The latest energy working group builds on steadily growing bilateral cooperation following Greek-US strategic dialogue meetings in December, 2018 and October, 2019, the joint announcement added.

The Greek team was represented by the Ministry of Foreign Affairs’ Deputy Minister for Economic Diplomacy and Openness Kostas Frangogiannis and Deputy Environment and Energy Minister Gerassimos Thomas (photo). The US team was represented by Assistant Secretary of State for Energy Resources Francis Fannon and Under Secretary of Energy Mark Menezes.

Fannon, the Assistant Secretary of State, expressed satisfaction on the completion of the Greek segment of the TAP gas pipeline project, to carry Azeri gas to Europe.

The US official also offered support for the ongoing construction of the Greek-Bulgarian IGB gas pipeline interconnection and the progress achieved in plans for an FSRU in Alexandroupoli, northeastern Greece, a South Kavala underground gas storage facility, and Greek-North Macedonian connection.

Alexandroupoli FSRU market test offers total 2.6 bcm, viability assured

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Binding capacity reservations for the prospective Alexandroupoli FSRU in northeastern Greece, whose second-round market test expired on Tuesday afternoon, amounted to 2.6 bcm, a tally that secures the project’s sustainability and paves the way for a finalized investment decision, energypress sources have informed.

Two Greek utilities, gas company DEPA and power company PPC, are among the participants who have reserved capacities, for long-term periods, the sources noted.

Bulgaria’s Bulgartransgaz and a Serbian company also confirmed earlier requests for capacity reservations.

Romania’s Romgaz did not turn up for the market test’s second round after expressing interest for a considerable capacity covering a lengthy period in the first round. Instead, two private-sector Romanian trading companies ended up submitting binding offers for Alexandroupoli FSRU capacities.

The Bulgarian, Serbian and Romanian interest highlights the potential of the Alexandroupoli FSRU to serve as a new natural gas gateway for southeast European markets, via the Greek-Bulgarian IGB pipeline, now under construction, as well as other existing and planned gas pipelines in the region.

Alexandroupoli FSRU project sustainable, reservations show

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A second-round market test offering capacity reservations for the prospective Alexandroupoli FSRU in northeastern Greece has drawn enough interest to ensure the project’s sustainability ahead of a final business decision, energypress sources have informed.

The deadline for this market test, a binding procedure, expires today following a ten-day extension granted in order to give Romania’s Romgaz more time to confirm the duration and quantity of its offer.

Romania has entered a period of political crisis after interim prime minister Ludovic Orban’s Liberal Party government was toppled in a no-confidence vote called by the main opposition last month. The coronavirus crisis has worsened the situation. Orban and his entire Cabinet have quarantined themselves after coming into contact with a senator who was later confirmed to have the coronavirus.

Greek gas utility DEPA and power utility PPC have reserved Alexandroupoli FSRU capacities for lengthy periods, the sources added.

Bulgaria’s Bulgartransgaz and a Serbian company are also believed to have confirmed earlier requests for capacity reservations.

The Bulgarian, Serbian and Romanian interest highlights the potential of the Alexandroupoli FSRU to serve as a new natural gas gateway for southeast European markets, via the Greek-Bulgarian IGB pipeline, now under construction, as well as other existing and planned gas pipelines in the region.

Alexandroupoli FSRU tender draws 3 bids, all by key players

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A tender staged by Gastrade for the construction of a pipeline and related projects needed to link the prospective Alexandroupoli FSRU, in Greece’s northeast, with the national gas grid, attracted bids from three companies, all major players at an international level, on the deadline day last Friday.

Experienced Italian firm Saipem teamed up with Greece’s Terna for one of the three bids, while two Dutch bidders, Boskalis and Van Oord, submitted the other two offers.

Gastrade officials will appraise the technical aspects of the offers before moving on to the financial side.

Meanwhile, the second round of a tender for the project’s FSRU is expected to be announced within the next few days, inviting first-round participants to submit binding offers. Over ten bidders, experienced players from Greece and abroad, submitted first-round bids for the FSRU.

The deadline of an ongoing market test for binding offers concerning the FSRU’s capacity reservations, crucial for the project’s final investment decision, expires in a few days’ time.

Besides the LNG quantities involved, the duration of capacity reservation requests will also be a pivotal factor for the project’s sustainability.

Gastrade officials, basing their judgement on the procedure’s developments until now, are confident of a favorable market test outcome that will lead to the project’s actualization.

Alexandroupoli FSRU market test extension until March 10

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A second-round market test offering capacity reservations for the prospective Alexandroupoli FSRU has been granted a deadline extension until March 10 to give newly emerged bidders more time to prepare for binding bids.

The Copelouzos group’s Gastrade, heading this LNG venture for Greece’s northeast, is determined to maximize the participation level of bidders and  capacity reservations in order to secure the project’s sustainability.

Besides the capacity reservation total, the duration of reservations is the other crucial factor determining the project’s sustainability. Gastrade would like to see reservations lasting 10 to 15 years instead of shorter periods.

Gastrade officials are confident the market test will produce a favorable outcome and soon propel the project towards construction.

The line-up of the Gastrade-initiated consortium for the Alexandroupoli FSRU appears to have been completed as a five-member team following a decision by Romania’s state-controlled gas company Romgaz to enter with a 20 percent stake. A related contract is expected to be signed within the next few days.

If the Romgaz entry is confirmed, the consortium’s line-up will consist of the Copelouzos group (20%), GasLog (20%), Greek gas utility DEPA (20%), Bulgartransgaz (20%) and Romgaz (20%).

 

 

DESFA wants key role in country’s infrastructure projects

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Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

RAE given 5 months to set Kavala underground gas storage charges

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RAE, the Regulatory Authority for Energy, has been given five months to determine the pricing policy, regulated earnings and WACC for a planned underground gas storage facility at a depleted offshore gas field in the south Kavala region, according to an imminent joint ministerial decision, energypress understands.

The launch date of the project’s tender will depend on funding for project studies through the EU’s Connecting Europe Facility (CEF) program. This essentially means that the privatization fund TAIPED will need to officially launch the project within the first half of this year to avoid missing out on CEF funds.

The project’s investment cost is estimated at between 300 and 400 million euros.

France’s Engie as well as Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender. DESFA, the gas grid operator, is also expected to participate in the tender.

The project, promising gas storage capacity of 360 million cubic meters, is considered vital for Greece as it will be able to maintain strategic reserves for considerable time periods.

Its development will help boost the performance level and strategic role of the Revythoussa LNG terminal just off Athens, and the prospective Alexandroupoli FSRU in the country’s northeast, as these will be able to supply the wider region greater gas quantities via the IGB and TAP gas pipelines.

The south Kavala project has been classified as a PCI project, offering EU funding opportunities, seen as crucial for the investment’s sustainability, according to some analysts.

‘DEPA key to Greece’s leading Balkan role, energy diversification’

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Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

Gas project financing limited by Brussels green energy policy

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The government faces a major struggle to secure EU funding for prospective natural gas projects as a result of the European Commission’s green energy policy, seeking to restrict, even end, support for investments concerning fossil fuels.

The energy and environment ministry’s secretary-general Alexandra Sdoukou, speaking last Friday at a National Conference on Growth, warned that the EU Partnership Agreement for 2021 to 2027 excludes, to a great extent, natural gas infrastructure from European Structural and Investment Funds.

Greece has planned a series of major gas infrastructure projects, including the Alexandroupoli FSRU, or floating LNG terminal in the northeast, as well as an underground gas storage facility at a depleted gas field in offshore South Kavala.

As for the transboundary East Med gas pipeline, energy minister Costis Hatzidakis, in a newspaper article published yesterday, noted that the project’s EU funding prospects would be improved if the pipeline acquired a greener profile by carrying  hydrogen mixed with natural gas from Egypt and Israel to Europe.

A recent European Investment Bank decision ending financing for all fossil fuel-related projects, including natural gas projects, as of 2021, was eventually revised to offer limited financing access to projects included on the European Commission’s latest PCI list.

 

Operator DESFA seeks role in Greek infrastructure projects

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Greek gas grid operator DESFA, driven by the three-member consortium of Snam, Enagas and Fluxys now controlling the company with a 66 percent stake, appears determined to stretch beyond its operator role and become one of the biggest and most pivotal players in the domestic energy market, judging by its interest in major Greek-related natural gas projects now in progress.

According to energypress sources, DESFA’s administration is looking to acquire stakes in three key energy infrastructure projects: the prospective floating LNG terminal (FSRU) in Alexandroupoli, northeastern Greece; the planned underground gas storage facility at a depleted natural gas field in the offshore south Kavala region; and DEPA Infrastructure, one of gas utility DEPA’s two new corporate entities heading for privatization.

The chief executives of Snam, Enagas and Fluxys, major European operators also holding respective stakes in the TAP project, met yesterday with Greek Prime Minister Kyriakos Mitsotakis.

The officials requested first-hand information on the government’s energy market decisions following the delivery of a new and more ambitious National Energy and Climate Plan and the signing of a trilateral agreement between Greece, Cyprus and Israel for the East Med gas pipeline.

The Greek operator’s controlling consortium also presented investment plans supporting the country’s decarbonization strategy and aspirations to become a regional energy hub.

EIB funding extension for PCI gas projects crucial for Greece

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The energy ministry’s leadership is hastening efforts to shape financing models for Greek PCI-classified natural gas projects as the European Investment Bank is expected to stop funding fossil-fuel projects beyond 2021.

The EIB had initially decided to stop funding all fossil fuel projects, including gas projects, as of 2020 before deciding to extend the period.

Greece, preparing major gas projects, had opposed the EIB decision. As part of this challenge, deputy energy minister Gerassimos Thomas held talks with the financial institution’s board of directors.

The revision now enables EIB funding for certain PCI-classified fossil fuel projects until the end of 2021. Thereafter, criteria will be applied to determine whether financial support can continue to be provided for projects on an individual basis.

Significant Greek natural gas projects are expected to be mature for financing and development around or beyond 2021.

The country is preparing to co-develop the East Med pipeline with Cyprus and Israel and also develop an FSRU in Alexandroupoli, northeastern Greece and an underground gas storage facility at a depleted natural gas field in the offshore South Kavala region.

The availability of EIB financing promises to prove crucial in determining the commercial viability of these projects.

 

 

Drastic changes to reshape energy sector by end of 2020

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Major developments in Greece’s energy sector, from lignite to natural gas, renewable energy, energy efficiency, as well as the geopolitical effects, promise a drastic reshape of the sector over the next year.

A first batch of power utility PPC’s existing lignite-fired power stations will have ceased operating as part of a plan for a full withdrawal by the end of 2023. PPC will have a reduced number of employees on its payroll. This will have positively impacted the utility’s profit figures.

Also, a first round of major renewable energy projects expected to be launched by PPC subsidiary PPC Renewables through partnerships, as part of the parent company’s wider turn to green energy, will intensify competition in the renewable energy market.

Furthermore, this time next year, assets currently belonging to gas utility DEPA, both in trade and infrastructure, may have been transferred to new owners. This development promises to reshape the entrepreneurial map as the private sector’s dominance will be absolute.

In the retail market, the number of players is expected to have diminished as a result of a new round of takeovers and mergers, amid heightened competition, as was also the case in telecommunications in the recent past.

In addition, Greece’s energy exchange will have clocked up several months of operations by the end of the year. Its arrival will intensify competition, remove market distortions and allow dormant potential to be realized through coupling with neighboring markets.

By the end of 2020, the TAP gas pipeline will have begun delivering its first orders of Azeri gas to Europe, the Greek-Bulgarian IGB gas pipeline will be nearing completion, while procedures leading to the development of the Alexandroupoli FSRU and an underground gas storage facility in the offshore area south of Kavala will have made progress.

Without a doubt, Greece’s energy sector appears to be waking up to the new reality, leaving behind anachronistic perceptions and embracing the green energy revolution. The country is now adopting new ways implemented by the overwhelming majority of European territories two decades earlier.

 

DEPA, pivotal for Greek energy plan, pushing ahead internationally

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Through its strategic involvement in an array of pipeline and infrastructure projects, Greek gas utility DEPA is becoming a key driver of Greece’s geopolitical upgrade and the diversification of supply sources for the wider region of South-East Europe.

DEPA is establishing its position in the region through a series of significant international projects such as the acceleration of IGB pipeline construction, participation in the IGI Poseidon pipeline  interconnecting Greece and Italy, and, surely, booking capacity in TAP which, from 2020 onwards, will transport Caspian gas to Europe.

Developments around East Med Pipeline are also rapid, with the most recent being IGI Poseidon’s (the 50% – 50% JV between DEPA S.A. and Edison S.p.A ) BoD decision to fast-track the completion of all pending stages that will bring the project to maturity.  The €70 million Feasibility Study is being accelerated, along with every other stage, to complete the East Med pipeline’s design, which will also pave the way for the final investment decision.

All the above are just one part of DEPA’s multifaceted international activity. Prior to that, in October, a bilateral agreement was signed in Sofia for the start of IGB pipeline construction, a project overseen by ICGB AD, in which DEPA has a 25% stake.

The project is expected to go into operation in July 2021, with an initial capacity of 3 billion cubic meters. At first, the entire load of gas will come from TAP that will go into operation within 2020, delivering Azeri gas to European markets, in which DEPA has booked capacity of 1 billion cubic meters. Thus, through IGB, the company will supply the Bulgarian market with Caspian gas, “breaking” for the first time the existing Russian monopoly.

Another major development took place just yesterday, when the company’s Board of Directors approved the participation of DEPA, with a 20% stake, to the equity of GASTRADE, the company developing the FSRU project in Alexandroupolis.

The Terminal is complementary to the IGB pipeline and consists of an FSRU (Floating Storage Regasification Unit), anchored 10 km off the coastal area of ​​Alexandroupolis, with storage capacity up to 170,000 cubic meters of LNG and 22.7 million cubic meters daily regasification capacity, per day (8.3 billion m3 / year), as well as a 28 km long onshore and subsea pipeline system.

The international presence of the company is also enhanced by the Greek-Italian energy interconnection through the IGI Poseidon pipeline, as well as the CYNERGY program that “breaks” Cyprus energy isolation by establishing a natural gas supply chain in the country.

Apart from its participation in international projects, equally important are the company’s long-term supply contracts with Russian Gazprom, Turkish BOTAS, Algerian Sonatrach, IGSC (Azerbaijan) through the TAP pipeline, as well as the procurement of significant quantities of LNG through the global SPOT market, at competitive prices.

DEPA’s CEO, Konstantinos Xifaras, summed up the company’s international role:

“For thirty years, DEPA has been a leading player in the Balkan energy sector, as well as an integral part of the European strategy for energy diversification and security of supply both of Greece and Europe.

At the same time, by deploying multilayered energy diplomacy and participating in major international projects, DEPA establishes Greece as a regional energy hub and upgrades its economic and geo-strategic importance.”

DEPA’s footprint is solid in the domestic energy market as well, where it recently prevailed in a tender process for natural gas supply to PPC in 2020. The company acknowledged as one of the two bidders, with the ability to supply PPC with 2 million MWh.

Alexandroupoli FSRU awaiting Bulgarian, Romanian decisions

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Gas utility DEPA’s recent decision to enter the prospective Alexandroupoli FSRU project consortium with a 20 percent stake leaves two more vacancies for the line-up’s completion and internationalized establishment.

The venture’s consortium, formed by the Copelouzos Group’s Gastrade, is now awaiting entry decisions from Bulgaria’s BulgarGasTrans as well as Romania’s Rompetrol, seriously examining the prospect of acquiring a 20 percent stake in this prospective LNG terminal project in Greece’s northeast.

Gaslog, active in LNG transportation, was the first partner to join Gastrade with a 20 percent stake in the consortium.

Gastrade is now preparing to stage a binding second-round market test for capacity reservations. RAE, the Regulatory Authority for Energy, has approved Gastrade’s procedure inviting participants to bid.

This second-round bidding phase is expected to be completed by the end of January, paving the way for a finalized investment decision by the project’s developers.

The first round’s non-binding expression of interest phase was completed at the end of last December.

A total of 24 bidders had expressed interest for 12.2 billion cubic meters, more than double the planned facility’s annual regasification capacity of 5.5 bcm.

 

 

Copelouzos, DEPA secure PPC gas supply deals for 4.5m MWh in 2020

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The Copelouzos Group and gas utility DEPA have emerged as the winning bidders of a power utility PPC tender for gas supply to the latter in 2020 totaling 4.5 million MWh. The terms include an option for supply in 2021.

Besides the Copelouzos Group and DEPA, a third participant, Mytilineos, took part in the tender.

The Copelouzos Group has successfully bid to supply 2.5 million MWh of gas to PPC, while DEPA has taken on the other 2 million MWh needed by the power utility, energypress sources informed.

PPC is one of Greece’s biggest natural gas consumers. Its needs are expected to grow further as a result of the power company’s upcoming entry into Greece’s natural gas retail market, a move carrying ambitious targets. PPC also plans to enter the wholesale gas market.

PPC failed to secure capacity slots for 2020 at the Revythoussa LNG terminal, just off Athens, through a competitive procedure from November to earlier this month.

Success here would have enabled PPC to import LNG shipments in 2020, as the power utility had done in the previous year.

PPC now intends to bid for an LNG capacity at the prospective Alexandroupoli FSRU in northeastern Greece during a binding second-round market test expected following the festive season.

PPC, seeking gas role, wants Alexandroupoli FSRU capacity

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Power utility PPC, making a dynamic entry into Greece’s natural gas market, is preparing to seek a capacity in the prospective Alexandroupoli FSRU through an upcoming second-round market test.

In another move two months earlier, PPC launched a range of retail energy products involving gas.

PPC is determined to reserve slots at the Alexandroupoli FSRU, northeastern Greece, after failing to secure a capacity at Greece’s existing Revythoussa LNG terminal just off Athens.

A first-round market test for the Alexandroupoli FSRU was completed at the end of last year. A total of 24 companies submitted non-binding bids for a total of up to 12.2 bcm per year, exceeding the facility’s planned annual regasification capacity of 5.5 bcm.

The power utility needs LNG quantities to supply its gas-fueled units and also sell gas in the wholesale market, like the market’s other major players.

PPC sees potential in Greece’s gas market, which could develop into a gas hub for supply to the wider southeast European region.

Greece’s gas market is headed for an upgrade to result from the completion of the TAP and IGB international gas transmission projects, as well as the potential to be offered by the Alexandroupoli FSRU and the offshore south Kavala region’s underground gas storage facility, a project to be developed through a conversion of a depleted natural gas field.

In the retail energy market, PPC is looking to offset its shrinking electricity role through gas-related trading activity. The power utility wants to make the most of its existing client base in electricity, numbering approximately 7 million customers.

Alexandroupoli FSRU 2nd-round market test ready for launch

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Gastrade, heading an effort for the development of an FSRU in Alexandroupoli, northeastern Greece, is preparing to launch a binding second-round market test.

RAE, the Regulatory Authority for Energy, has approved the procedure’s finalized texts concerning participation terms and conditions, indicative tariffs, schedules and a capacity reservation model for the LNG terminal.

The second-round market test could be completed by the end of January, it is anticipated. This would pave the way for a final investment decision by the company while a concurrent effort is made to finalize the venture’s equity make-up.

Besides the Copelouzos group, the venture’s initiator, GasLog, active in LNG transportation, is also on board with a 20 percent stake. A final decision by gas utility DEPA on its participation, also with a 20 percent stake, remains pending.

DEPA’s prospective involvement in the Alexandroupoli FSRU project, considered a certainty, has been passed on to DEPA Trade, a new entity established in preparation for DEPA’s privatization.

A final decision by Bulgarian Energy Holding (BEH) concerning its possible entry with a 20 percent stake is also pending.

An effort offering the remaining 20 percent is in progress. Candidates include Romgaz, Romania’s biggest natural gas producer and main supplier in the domestic market. The company’s shareholders recently voted to enter the Alexandroupoli FSRU project.

“We are very optimistic. We believe we will do better than what we need to in order to make the final investment decision,” Gastrade’s chief executive Costis Sifneos noted recently.

Greece’s decarbonization program, announced recently by the government, will bring about major changes to the country’s energy mix, according to Sifneos. He expects the domestic natural gas market to grow from its current size of 4.5 billion cubic meters, annually, to 7 billion cubic meters over the next 5 to 7 years.

The Greek gas market has grown by 17 percent this year alone, while, for the first time, LNG quantities exceeded pipeline gas.

Elpedison makes dynamic gas market move for 2020, Balkans also eyed

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Elpedison’s strong turnout for gas grid operator DESFA’s annual reservation of LNG slots at the Revythoussa terminal just off Athens highlights the company’s strategic decision aiming for a leading role in the wholesale gas market, which it entered last year.

Elpedison has reserved 22 slots, roughly one-third of a total of 65 slots offered by DESFA for the terminal in 2020.

Mytilineos, the country’s biggest LNG importer, also booked 22 slots. Gas utility DEPA reserved 14 slots, while Heron booked seven slots.

Elpedison considers its involvement in the wholesale and retail gas markets just as important as its activities in the electricity market, chief executive Nikos Zahariadis underlined in comments to energypress. Elpedison will bolster its gas market presence in 2020, he added.

Storage and gasification capacity increases at the Revythoussa LNG terminal have played an instrumental role in helping liberalize Greece’s gas market. This development, along with lower-priced LNG, compared to pipeline gas, has created market prospects and opportunities. Elpedison operates two gas-fueled power plants.

Besides the Greek market, Elpedison, just like all other corporate groups importing and trading gas, also sees opportunities in Balkan markets. The company already sells modest gas quantities in Bulgaria and Romania but is aiming for a significant increase in 2020.

Greece is developing into a gas hub for supply to the wider southeast European region, Zahariadis, Elpedison’s chief executive, noted. Major international gas infrastructure projects such as the TAP, IGB, Alexandroupoli FSRU and underground gas storage facility in the offshore South Kavala region are expected to be completed within the next few years, he stressed.

 

Stricter PPC hiring supervision among energy draft bill changes

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A number of observations made during public consultation for an energy-sector draft bill concerning the energy market’s liberalization, power utility PPC’s modernization, gas utility DEPA’s privatization and RES support, including stricter recruitment control at PPC, have been incorporated into the bill.

The draft bill, submitted to Parliament last Friday, will now be distributed to parliamentary committees for discussion before being transferred to the house for ratification towards the end of the month.

The stricter recruitment control at state-controlled PPC will require inspections and approvals by ASEP, the Supreme Council for Civil Personnel Selection, during hiring procedures, not afterwards.

In another important draft bill revision, gas utility DEPA’s possible stake in the prospective Alexandroupoli FSRU would be held by DEPA Trade, a new DEPA entity being formed as part of the gas utility’s privatization. Previously, this stake was planned for the utility’s international projects division.

Furthermore, the new shareholders to acquire the Greek State’s 65 percent of DEPA Infrastructure, the gas utility’s other new entity in the making, will need to maintain this stake for at least five years.

Also, a universal electricity supply service covering the electricity needs of blacklisted consumers not wanted by suppliers for repeatedly failing to meet electricity bill payments, will require the market’s top five suppliers – up from three – to cover this sector’s market needs for two years if a competitive procedure for the service fails to produce a result.

Independent suppliers, repelled by market irregularities, have shunned this universal service since its introduction in Greece in 2011. This has forced PPC to step in, by law, as the dominant player.

The aim is to transform the universal service, offering electricity at considerably elevated rates, into an attractive market for local suppliers, as is the case in other European markets.

DEPA examining Alexandroupoli FSRU stake, role in privatization

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Gas utility DEPA is contemplating its entry into the equity line-up of an FSRU planned for Alexandroupoli, northeastern Greece, and, if so, whether this stake would be incorporated into DEPA Trade or DEPA Infrastructure, two new divisions to emerge ahead of the utility’s upcoming privatization.

DEPA’s stake in the Alexandroupoli FSRU, expected to be 20 percent, would make a good selling point for DEPA Trade ahead of the privatization. Finalized decisions by the DEPA board are expected soon. Neighboring Bulgaria’s liberalized gas market, in which DEPA already enjoys a presence, will be taken into account.

A project budgeted at 380 million euros, the Alexandroupoli FSRU, promoted by Gastrade, has reached a very mature investment phase. The unit is planned to be moored 17.6 kilometers southwest of the Alexandroupoli port.

According to the project plan, the facility’s LNG storage capacity will be between 150,000 and 170,000 cubic meters, while LNG regasification will be performed at the FSRU and then transported to mainland pipelines via a 28-kilometer pipeline, of which 24 kilometers will be under water.

The details of the DEPA Trade and DEPA Infrastructure privatizations still remain uncertain. According to some sources, both procedures could be staged concurrently and offer investors as much as 65 percent of each division, in other words, the Greek State’s entire stake in DEPA. Hellenic Petroleum ELPE owns the other 35 percent of DEPA.

Copelouzos’ DESFA 6.6% buy inspection ready by September

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RAE, the Regulatory Authority for Energy, expects to complete its inspection of the Copelouzos group’s entry into gas grid operator DESFA early in September, enabling the agreement’s completion.

Earlier this month, the Copelouzos group’s Damco agreed to buy a 10 percent stake of Senfluga, a consortium formed by Snam, Enagas and Fluxys for the acquisition of a 66 percent stake of DESFA last year. This promises to offer Damco a 6.6 percent share of DESFA.

RAE’s endorsement could be delayed beyond early September if the authority requests further details on the agreement, some sources warned.

Damco’s decision to acquire a 6.6 percent stake of DESFA, officially announced on August 5, signals the Copelouzos group’s interest for a wider association with Snam, Enagas and Fluxys in international infrastructure projects.

The Senfluga consortium was established with Snam as its main shareholder, holding a 60 percent stake, joined by Enagas and Fluxys, each with 20 percent stakes.

The Copelouzos group, in association with Gaslog, an international LNG carrier run by Panagiotis Livanos, has launched an effort for the development of an FSRU in Alexandroupoli, northeastern Greece. Greek gas utility DEPA, its Bulgarian peer Bulgartransgaz, and private investors are also expected to become involved in this project.

Highlighting the domestic natural gas market’s growing potential, DESFA is also eyeing an imminent tender for the development of an underground gas storage facility at a depleted natural gas field in the offshore South Kavala region.