Alexandroupoli FSRU 2nd-round market test ready for launch

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.

IGB bilateral agreement for construction start to be signed in Sofia

A Greek-Bulgarian bilateral agreement enabling the commencement of construction work on the IGB gas grid interconnector is set to signed in Sofia during a two-day meeting scheduled for October 9 and 10.

Complementary agreements concerning the project, the most significant of these being a shareholders’ agreement and a loan agreement with the European Investment Bank (EIB), will also be signed by officials over the two days.

The Greek-Bulgarian pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora. It will serve as a second interconnection point for the Greek and Bulgarian gas systems, in addition to an existing station in nearby Sidirokastro.

The new project, to offer an annual capacity of 5 billion cubic meters, will commence operating at a lower level of 3 billion cubic meters.

The IGB pipeline is planned to be linked with TAP, running across northern Greece. Combined with the Bulgaria-Romania and Bulgaria-Serbia interconnections, the IGB will contribute to the establishment of the vertical corridor through the Balkans and connect central Balkan countries with Caspian gas and the TAP pipeline.

IGB’s planning, construction and operation has been taken on by ICGB, the project’s Sofia-based consortium, a 50-50 joint venture representing the state-controlled Bulgarian Energy Holding (BEH) and IGI Poseidon, involving Greek gas utility DEPA and Edison.

IGB tenders, moving fast, aim for winning bidders by May

Procedures leading to pipeline procurement and construction contracts through a tender concerning the Greek-Bulgarian IGB gas grid interconnector are progressing rapidly, the aim of the project’s officials being to announce the winning bidders by May and give the go-ahead for work to commence in June.

The project’s tenders are being staged amid a period of heightened geopolitical interest and activity in the Balkans, which has spurred hopes of the IGB’s completion and launch within the first half of 2020.

Greek energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova are expected to acknowledge the swift progress being made at a meeting in Sofia next Monday. They may even announce an even swifter schedule for the project’s completion.

ICGB, the IGB project’s consortium, is a joint venture involving YAFA Poseidon – a Greek gas utility DEPA half-owned subsidiary – and the state-controlled Bulgarian Energy Holding (BEH).

Two of five candidates submitted bids just days ago to the second phase of a tender concerning the design, procurement and construction of the gas pipeline, a 182-km stretch budgeted at 145 million euros.

Greece’s J&P Avax and a rival consortium comprising Italy’s Bonatti and two Bulgarian firms, DZZD (IGB-2018), were the two bidding formations. Their technical proposals will now be assessed and offers unveiled in the effort to declare a winning bidder next month.

A pipeline supply tender budgeted at 60 million euros has also reached an advanced stage. Greece’s Corinth Pipeworks has entered this procedure and is up against a Turkish-Bulgarian consortium.

A preceding third tender for the role of project manager, to monitor the project on behalf of shareholders, has already produced a winning bidder, a consortium named TIBEI, whose 5.57 million-euro offer secured this contract.

TIBEI is comprised of Belgium’s Tractebel Engineering SA, Italy’s Tractebel Engineering SRL, Austria-based INTBER GMBH, as well as two Bulgarian firms, Ipsilon Consult OOD and Engineering EAD.

 

 

Offers soon for IGB gas pipeline project tenders, nearing completion

Three tenders offering contracts for Greek-Bulgarian IGB gas grid interconnector’s project manager, pipeline procurement and construction are approaching completion.

Offers for the tender to appoint a project manager, to monitor development on behalf of shareholders, are expected this month.

Greece is well represented in the tender concerning the construction of the IGB pipeline, planned to cover a 182-km stretch and budgeted at 145 million euros. A total of five consortiums with three Greek firms on board have advanced to this tender’s second round.

Germany’s Max Streicher has teamed up with Greece’s Terna; China Petroleum Pipeline Engineering has joined forces with Aktor; and J&P Avax is the third local qualifier. Their bids are expected next week.

ICGB, the IGB project’s consortium, a joint venture involving YAFA Poseidon – a Greek gas utility DEPA half-owned subsidiary – and the state-controlled Bulgarian Energy Holding (BEH), plans to have appraised these offers within a month before announcing a preferred bidder at the end of April.

The IGB is planned to be linked with the TAP route, offering Bulgaria and the wider southeast European region access to Caspian gas as well as LNG.

 

Strong reservation interest for Alexandroupoli LNG terminal

A market test for an FSRU project planned for development by Gastrade in Alexandroupoli, northeastern Greece has drawn greater than expected interest from traders for capacity reservations, who expressed interest for a level totaling one and a half times the planned LNG terminal’s full capacity.

A further increase of significant magnitude is expected as a number of major trading firms have requested and been given a deadline extension of a few days to prepare all needed documents for their expressions of interest. The market test’s new deadline has now been extended to December 31.

The overwhelming level of interest ensures the project’s sustainability as well as the development interest of its partners. It also reflects the need of regional countries for alternative natural gas sources as well as an anticipation of a more significant role to be played by LNG in the global energy mix.

Besides the gas utility DEPA and Bulgarian Energy Holding (BEH), two companies whose interest in Alexandroupoli FSRU capacity is already widely known, all major traders, Hungarian and Serbian firms, as well as Greece’s main power utility PPC emerged to express interest, according to sources.

Without a doubt, the project, granted PCI status by the European Commission, is politically supported at national, European and cross-Atlantic levels.

According to Gastrade, the project will be ready by the end of 2020. DEPA and BEH are soon expected to be inducted into the project’s consortium as partners. At present, it appears the consortium will be comprised of five partners, each holding 20 pecent stakes – Gaslog, DEPA, BEH, Gastrade and a fifth still-unknown partner.

First round of crucial market test for Alexandroupoli FSRU launched

Shareholders at Greek gas company Gastrade, seeking to co-develop an FSRU project in Alexandroupoli, northeastern Greece, will need to make final investment decisions following a market test, whose first round, entailing non-binding expressions of interest, was launched yesterday.

Binding bids, for FSRU capacity reservations, will be made in the procedure’s follow-up round.

Granted PCI status by the EU, the Alexandroupoli FSRU is being widely supported, politically, at national, European and cross-Atlantic levels.

Greek gas utility DEPA and Bulgaria’s BEH are both seen as market test certainties. Plans are now at advanced stages for both to each hold 20 percent stakes in a consortium for the Alexandroupoli FSRU’s development. Final approvals for the consortium entries of both are anticipated but still pending.

The emergence of other players, for FRSU capacity reservations, will be pivotal for the project’s development prospects. Gastrade and its project partners will be hoping to see the emergence of key international players aiming to supply gas to the wider region, including US gas exporters, firms associated with the prospective Greek-Bulgarian IGB link, including Serbian, as well as traders operating in the region.

For quite some time now, there has been talk of a US firm entering the Alexandroupoli FSRU consortium with a 20 percent stake. Cheniere has been named as a possibility but another undisclosed US contender is also believed to be in the running.

The Alexandroupoli FSRU consortium was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, also joined. At present, Gastrade holds a 40 percent stake and Gaslog holds 20 percent. DEPA and BEH are also expected to acquire respective 20 percent stakes, while any newcomer is expected to take on half of Gastrade’s current stake.

Surprise US player may enter Alexandroupoli FSRU team

An additional member, possibly a major US player, could join a consortium for the development and operation of an FSRU project in Alexandroupoli, northeastern Greece, with a 20 percent stake, in addition to DEPA, the public gas corporation, and Bulgaria’s BEH, both preparing to also enter the project’s corporate team.

Technical details are now being worked on by the Bulgarian government for the entries of DEPA and BEH to the Alexandroupoli FSRU’s consortium. It was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, also joined.

The government in Sofia is expected to offer its approval within the current month. Once this stage is completed, the consortium will be comprised of Gastrade (40%), Gaslog (20%), DEPA (20%) and BEH (20%). The additional entry being touted would acquire half of Gastrade’s stake, giving all members equal stakes.

Cheniere, the dominant player of the US natural gas market, and another unnamed American enterprise, regarded as a surprise candidate, are both being touted as possible additions to the Alexandroupoli FSRU consortium.

The addition of a non-American enterprise has also been mentioned as Gastrade is believed to be engaged in talks with major traders showing an increasing interest in the specific region.

“A final decision will be reached based on the added value, both strategically and financially, to be brought to the project by the new shareholder,” a source involved in the developments informed energypress.

Meanwhile, a two-stage market test is expected to be launched by mid-September. Gastrade anticipates an accurate measure of the overall commercial interest in the project by the end of 2018, before it makes investment decisions. If all goes as planned, the FSRU project will be ready to operate at the end of 2020.

Important project news is expected to emerge this Friday at a Hellenic-American Chamber of Commerce conference in Thessaloniki, held ahead of the Thessaloniki International Trade Fair, opening Saturday.

The Alexandroupoli FSRU is seen as an important project that may ensure supply of new natural gas quantities to the Greek and regional southeast European markets, while also contributing to the diversification of supply sources and routes. The PCI-status project plan is being widely supported at Greek, EU and cross-Atlantic levels.

 

DEPA, Gastrade agree on capacity reservation for FSRU in north

The managing director of DEPA (public gas corporation), Dimitris Tzortzis, and the managing director of Gastrade, Konstantinos Spyropoulos, have reached an agreement in Athens regarding the future capacity reservation by DEPA for the LNG terminal in Alexandroupoli, northern Greece, an EU Project of Common Interest developed by Gastrade, as well as for DEPA’s participation in the relevant market test that will be carried out in the coming months, DEPA has announced in a statement.

The agreement was reached within the context of a trilateral meeting between DEPA, the Bulgarian Energy Holding EAD (BEH) and Gastrade.

This is a follow-up to a cooperation agreement signed by the two parties for the participation of DEPA in the share capital of Gastrade, which is expected to be completed soon, as well as for the joint efforts of the parties for further commercial development of the project.

At the same time, the Bulgarian side, following a meeting in Sofia last month by Greek energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova, confirmed its intention to speed up respective negotiations for the completion of its own participation in the project.

Gastrade is a Greek company that studies, designs, constructs, manages and operates gas infrastructure. The company has already required all licenses needed to begin constructing the LNG terminal in Alexandroupoli.

The project will ensure new gas quantities for supply to the Greek and regional markets of southeastern Europe, contribute to the expansion of gas supply sources and routes, promote competition to the benefit of consumers, supply security in Greece and the Balkans, and improve the reliability and flexibility of the national natural gas system as well as of the regional and trans-European systems.

In February, 2017, GasLog, an international owner, operator and manager of LNG carriers, announced that it had acquired a 20 percent stake in Gastrade.

GasLog’s consolidated owned fleet consists of 29 LNG carriers (25 ships on the water and four on order).

DEPA, backed by a long presence in the Greek gas market, is a modern and competitive group of companies with a dynamic presence in the energy sector. DEPA promotes the development of strategic infrastructure for the supply of gas from diversified sources and routes at competitive prices, with a view to taking a leading role in the markets of the wider region of southeastern Europe.

Bulgarian Energy Holding EAD (BEH) is the holding company for a group of companies which are principally engaged in electricity generation, supply and transmission, natural gas transmission, supply and storage and coal mining. BEH holds leading positions in the electricity and gas markets in Bulgaria and, through electricity exports, in the Balkans. BEH is wholly owned by the Bulgarian state and is the largest state-owned company in terms of total assets in the country. The rights of ownership of the state are exercised by the Minister of Energy.

 

 

 

Alexandroupoli FSRU business decision seen by end of year

A road map prepared by shareholders of a consortium for the development and operation of an FSRU project in Alexandroupoli, northeastern Greece, lists three basic steps still needed for the venture’s development and operation.

Greece’s DEPA, the public gas corporation, and Bulgaria’s BEH still need to complete negotiations and sign agreements concerning their involvement; an official market test measuring capacity coverage by interested third parties must be staged; and a finalized business plan that would enable the project’s development to commence towards the end of the year, are listed as three pending steps in the road map.

Current developments suggest the official market test will be held imminently, most likely by the summer.

The Alexandroupoli FSRU is seen as a project that may ensure supply of new natural gas quantities for the Greek and regional southeast European markets; contribute to the diversification of supply sources and routes; increase competition, to the benefit of consumers; and boost the reliability and flexibility of both the national and regional gas systems.

These factors have helped reinstate the Alexandroupoli FSRU as an EU Project of Common Interest (PCI).

The project’s interests are linked to those of the Greek-Bulgarian IGB Interconnector.

The Alexandroupoli FSRU plan was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, also officially joined the consortium. Due dilligence is currently in progress for DEPA’s entry with a 20 percent stake. DEPA signed a related agreement with Gastrade in October.

Negotiations with Bulgaria’s BEH are also in progress. The firm’s official entry into the project is expected soon.

 

 

 

BEH to soon enter Alexandroupoli FSRU with 25% stake, deputy says

Bulgarian Energy Holding (BEH) expects to soon enter a consortium planning to develop a floating LNG terminal in Alexandroupoli, northeastern Greece, with a 25 percent stake, the company’s deputy chief executive officer Severin Vartigov noted during a speech at Energy Academy, a recent conference staged by the Greek Energy Forum in Athens.

Vartigov described the Alexandroupoli FSRU and the Greek-Bulgarian IGB gas pipeline interconnection as complementary projects to contribute to source  diversification and supply security in the wider southeast European region.

BEH will acquire a 25 percent stake in the Alexandroupoli FSRU consortium as soon as a due dilligence procedure has been completed, the BEH official noted.

The Alexandroupoli FSRU plan was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, and, most recently, DEPA, the Public Gas Corporation, also joined in. Besides BEH, Tellurian Energy, a US firm, has also considered entering the consortium.

Vartigov reminded that a construction permit for the IGB project’s Bulgarian segment was issued in September. He noted the project soon stands to secure additional EU funding worth 37.5 million euros for the increased level of competitiveness the project promises to offer.

The BEH deputy noted the IGB consortium is working intensively to ensure EU funding.

Vartigov told the conference the IGB interconnection will be completed and ready to operate by the end of 2019.

The Bulgarian official also expressed aspirations for development of a Serbian-Bulgarian gas pipeline interconnection. He described this plan as a low-cost project as Serbia has already been offered EU funding that would cover 60 percent of the cost of the segment covering Serbian territory. BEH is ready to cover the cost concerning the Bulgarian side, Vartigov said.

A Romanian-Bulgarian gas pipeline interconnection has been completed but, at present, can only flow one way, from south to north, as a result of low pressure hampering Romania’s natural gas grid, Vartigov noted. He said he is confident the Romanian government will soon install new compressors to boost the national gas grid’s pressure and enable reverse flow.