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

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.

 

DEPA examining Alexandroupoli FSRU stake, role in privatization

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.

DG Comp lists Greek electricity market issues needing action

Greece has been handed a list of pending electricity market issues, old and recent, requiring urgent government action at a meeting between the country’s finance minister Hristos Staikouras and European Commissioner for Competition Margrethe Vestager in Athens just over a week ago, sources informed.

The delay of a market coupling plan for the Greek and Bulgarian electricity markets, as well as uncertainty surrounding Greece’s operating schedule for lignite-fired power stations this coming winter and, by extension, its impact on natural gas-fueled units and the market’s liberalization, are among the urgent matters listed by Vestager.

The Danish politician will continue to head the DG Comp following last May’s European Parliament election.

In February, 2017, DG Comp officials had ambushed the Athens headquarters of power utility PPC and power grid operator IPTO to collect data for a market abuse investigation.

Brussels officials are continuing their probe with further questioning, it is believed. No findings have been released, but these will undoubtedly be published once Brussels deems the time is right.

The DG Comp moves methodically when dealing with such matters. In France, for example, the authority last week ordered Paris to open up the country’s hydropower production to competition after launching an investigation into French energy utility EDF’s market dominance back in 2015.

 

IGB agreement, target model on agenda of minister’s Sofia visit

The signing of a Greek-Bulgarian bilateral agreement for the IGB gas grid interconnector, a project of major geopolitical significance, may be at the top of the agenda of the energy ministry leadership’s official visit to Sofia tomorrow and Thursday, but the target model, also on the agenda, is just as crucial.

The target model is vital as it entails the coupling of the Greek and Bulgarian electricity markets, needed for the establishment of regional electricity market, a key EU energy policy.

Given the Sofia trip’s demands, energy minister Costis Hatzidakis will be joined by his deputy Gerassimos Thomas.

Hatzidakis, on this trip, is expected to sign a bilateral agreement for the IGB gas pipeline’s construction and operation. A shareholders’ agreement and a European Investment Bank (EIB) loan agreement for the project are also planned to be signed.

The Greek-Bulgarian gas pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora, creating 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 begin operating at a lower capacity level of 3 billion cubic meters.

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

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.

Balkans-focused energy forum on eve of Thessaloniki fair

Two key regional gas pipeline projects involving Greece and backed by the US, the Greek-Bulgarian IGB gas grid interconnection and a pipeline to link Greece and North Macedonia, will be at the center of attention in talks between energy minister Costis Hatzidakis and peers at the Southeast Europe Energy Forum in Thessaloniki on September 6, a day ahead of the opening of this year’s Thessaloniki International Fair.

Hatzidakis and the US Ambassador to Greece, Geoffrey R. Pyatt, will be key speakers at the forum, where speeches will also be delivered by the energy ministers of Bulgaria, Cyprus, Israel, North Macedonia, Romania and Serbia.

Besides the prospective gas pipeline from Greece to North Macedonia, the talks between Hatzidakis and his North Macedonian peer will also focus on an upgrade of the electricity grid interconnection linking the systems of the two countries, as well as an upcoming relaunch of the Okta oil pipeline, stretching from an ELPE (Hellenic Petroleum) facility in Thessaloniki to the company’s Okta refinery and storage facility in North Macedonia.

The gas pipeline is the most important project of the three as an interconnection of the Greek and North Macedonian gas systems does not exist.

The Greek-Bulgarian IGB gas interconnection, along with TAP, to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to central Europe via Italy, are Greece’s two most significant international energy projects.

They promise to further diversify Europe’s energy sources and weaken Russia’s dominance in the region.

Meanwhile, Russia is promoting its own energy and geopolitical interests in the region. Last month, Greece was excluded from Turkish Stream, a Russian-Turkish gas pipeline plan whose second segment is now planned to run through Bulgaria, not Greece.

The first segment of this gas pipeline project is planned to supply Russian natural gas to the Turkish market and the second to Europe’s south and southeast.

 

PPC subsidiary planning further expansion in Bulgaria

Many aspects concerning the future course of state-controlled power utility PPC may still be unclear following the change of government brought about by last weekend’s elections but one thing for certain is that plans will be laid out to increase the utility’s business activities in foreign markets through its subsidiaries abroad.

One example is Bulgaria, where PPC has already achieved some success in the neighboring country’s electricity market, which it entered in 2015.

Presenting PPC Bulgaria’s main strategic objectives at a recent economic forum in Plovdiv, Bulgaria’s second-largest city, the subsidiary’s chief executive director Alexandra Psyrri made note of the company’s favorable results, so far, as well as the opportunities offered by Bulgaria’s wholesale energy market.

PPC Bulgaria aims to further expand its profitable activities based on a business plan that also includes electricity supply across the border, Psyrri told the forum.

PPC Bulgaria’s annual turnover reaches 4.9 million euros, she noted.

 

 

Greek power producers also eyeing Balkan export potential

The country’s power producers are focusing on the market prospects of  neighboring countries along with a heightened interest in Greece’s electricity market as a result of the upcoming elections, seen bringing the main opposition New Democracy party into power for more decisive reform action at power utility PPC, and intensified market competition.

Investments plans by PPC, currently developing its Ptolemaida V power station, as well as by private-sector enterprises, which have announced plans for five new state-of-the-art units, are expected to create an overabundance of electricity, even of all these plans are not executed. This is one of three main factors turning the attention of power producers to neighboring markets.

Also, it has become clear that Balkan markets lack flexibility in electricity generation as they primarily depend on coal, while gas networks that could support flexible gas-fueled power stations in the region are insufficient.

A third factor contributing to the heightened the interest of local producers for energy-related business in the wider region is Greek power grid operator IPTO’s ongoing upgrade of Greece’s grid interconnections with neighboring countries, especially Bulgaria and North Macedonia, which promises to create greater export potential.

Besides the independent producers, PPC is also looking to capitalize on this export potential.

DEPA makes first ever gas sale abroad with Bulgargaz order

Greek gas utility DEPA has taken a first step towards actualizing an international trading role in the wider Balkan region, a strategy mapped out by its administration, by clinching a deal to supply a 1.5 million-MW quantity of natural gas to Bulgaraz. The development represents DEPA’s first natural gas sale abroad.

DEPA was the winning bidder of an auction staged by the Bulgarian energy company for its first ever purchase of natural gas not stemming from Russia’s Gazprom Export, the Balkan country’s standard gas supplier through a long-term supply agreement.

Besides DEPA, the Bulgaraz auction also involved Dutch company Colmar and Bulgaria’s Dexia.

The natural gas quantity ordered by Bulgaraz through its auction is scheduled to be delivered by the summer through a Greek-Bulgarian pipeline connection. Russian gas reaches Greece through this reverse-flow pipeline.

DEPA, as part of its plan to expand its gas trading activities in the wider Balkan region, is seeking Gazprom permission to sell Russian gas in Balkan markets. Gazprom has yet to offer such an approval.

PPC list of electricity import traders for 2019 contains surprises

The main power utility PPC’s list of traders chosen for electricity imports in 2019 from grid interconnections north of Greece contains certain surprises.

A number of major players have not made PPC’s recently approved list of traders for 2019, while firms limited to minor transboundary electricity trade roles last year –  through Greece’s grid interconnections with Bulgaria, Fyrom (Former Yugoslav Republic of Macedonia) and Albania – have been included.

PPC’s list of traders for 2019 is comprised of Alpiq, CEZ, EFT, Elpetra, Enmar, Freepoint, Grand Energy, HSE, Green, LET and Terna Energy Trading.

Four of these, Elpetra, Enmar, Freepoint and Grand Energy, were not involved in any trading activity with PPC last year.

According to a related monthly industry report, electricity imports last December were provided by six traders, these being Alpiq (33.302 MWh), CEZ (19 MWh), EFT Slovenia (21.295 MWh), HSE (28.375 MWh), GreenEnv (33.116 MWh) and LE Trading (1.417 MWh).

PPC and Alpiq operate a subsdiary firm in Bulgaria focused on transboundary electricity trade.

 

 

 

Name agreement developing Fyrom into ELPE oil hub

A bilateral agreement between Greece and Fyrom (Former Yugoslav Republic of Macedonia) for a change of name by the latter to the Republic of North Macedonia is providing further momentum to talks between ELPE (Hellenic Petroleum) and the neighboring country’s government for the reopening of an oil pipeline stretching 213 kilometers from the Greek petroleum group’s Thessaloniki facilities to its Okta company refinery across the northern border.

The two sides are close to finalizing an agreement for the pipeline’s relaunch, sources informed. The facility was shut down in 2013 when ELPE decided it was no longer feasible to keep it running.

The Greek company used the pipeline as a channel of transportation for crude from its Thessaloniki plant to the Okta unit in Fyrom.

Road networks have been used to supply fuels to Fyrom since 2013 but transportation costs and smuggling activity have risen sharply at the expense of both Fyrom and ELPE, the neighboring market’s main supplier.

Besides supplying the Fyrom market, ELPE’s Okta refinery also promises to serve as a hub for the wider region. Wider growth in Balkan countries over recent years was a catalyst in the ELPE board’s decision to reopen the pipeline to its Okta plant.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating more than 200 petrol stations in total. The pipeline’s reopening is expected to facilitate ELPE’s entry into new markets.

 

ELPE oil pipeline from Thessaloniki to Fyrom seen reopening March

An oil pipeline stretching 213 kilometers from Greek petroleum group  ELPE’s Thessaloniki facilities in the country’s north to its Okta company refinery across the northern border in Fyrom (Former Yugoslav Republic of Macedonia) is expected to reopen around March after the firm ceased using this channel in 2013, ruling it, at the time, as inefficient and unprofitable.

The ensuing road transportation of fuels has sharply increased costs and smuggling activity.

ELPE and Fyrom’s administration are ready for the oil pipeline’s reopening, sources have informed. However, constitutional changes concerning a bilateral agreement for Fyrom’s name change to the Republic of North Macedonia, requiring several rounds of voting in parliament, still need to be completed before oil quantities can be transported through this pipeline.

The ELPE group is currently using its Okta company refinery as a storage facility. Balkan regional growth experienced in recent years has rekindled the Greek petroleum firm’s interest in the Okta unit as a transit center for distribution of petroleum products in Fyrom and other countries in the region.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating over 200 petrol stations.

The Thessaloniki-Fyrom oil pipeline’s reopening is expected to significantly reduce fuel transportation costs to these markets.

 

Elpedison set to begin importing gas via Bulgarian link in 2019

Energy firm Elpedison has finalized all details, including grid capacity reservations, to begin importing natural gas into Greece as of 2019 via the Greek-Bulgarian interconnection, according to sources.

The company’s move, promising to add Elpedison to a growing number of major domestic energy players engaging in cross-border natural gas trade, aims to improve the firm’s supply mix and bolster its portfolio.

Elpedison is expected to begin importing at levels of 500 MWh with a view to increasing amounts.

Besides the gas utility DEPA, three private-sector players, Promitheas – a member of the Copelouzos group – Mytilineos and Heron, are already importing natural gas through the Greek-Bulgarian border.

The Greek-Bulgarian border was opened for natural gas trade in 2017 following agreements signed by the respective gas grid operators of the two countries.

Elpedison’s turn to natural gas follows its already heightened level of cross-border electricity trading activity, reaching as far as central Europe and Hungary.

Elpedison, on a positive course, is expected to end 2018 with favorable EBITDA results.

 

DESFA, Botas working on deal to liberalize Greek entry point

Greek gas grid operator DESFA and Turkish state-run crude oil and gas company Botas are working on an agreement concerning the Kipous grid interconnection in Evros, at Greece’s northeastern tip, which would enable third parties, in addition to Greek gas utility DEPA, to use the link as an entry point for natural gas imports.

DESFA has already reached an equivalent agreement with Bulgarian operator Bulgartransgaz for the gas grid interconnection at Sidirokastro, by the Greek-Bulgarian border. Subsequently, since 2017, five new firms besides DEPA, until then Greece’s only natural gas importer from this entry point, have brought gas quantities into the local market via the Sidirokastro link.

DEFSA and Botas have now been engaged in talks over the matter for several months. It is unclear how much more time will be needed for an agreement.

Their negotiations are focused on technical measure-related issues and a reverse-flow agreement that would also enable gas outflow from Greece to Turkey.

Balkan countries working on EU protective solidarity arrangements

EU member states are working on forming and signing solidarity arrangements to offer wider crisis prevention plans against electricity and natural gas supply abnormalities by December 1, based on an EU regulation issued last November.

These arrangements are intended to protect consumers and infrastructure against energy shortage threats raised by emergency conditions as a coordinated European effort rather than a series of national plans, seen as too limited to counter threats with broader implications.

RAE, Greece’s Regulatory Authority for Energy, has been tasked with heading the wider arrangement’s Balkan group, coordinating the protection plans of Greece, Bulgaria and Romania.

The solidarity arrangements are seen as a necessary form of protection in emergency situations given the interactive nature of electricity and natural gas markets, especially neighboring markets.

The solidarity arrangements will enable EU member states affected by natural gas and electricity supply problems to seek support from neighboring countries.

According to the EU regulation, gas supply sufficiency priority will be given to households, telethermal facilities and key social services such as hospitals.

In the plan’s most recent regional development, Greek and Bulgarian energy regulatory and energy exchange officials, as well as system operators representing the two neighboring countries, held a meeting early last month to establish a road map with an objective to bridge their electricity markets.

The crucial role of energy as a link promoting stability, economic growth and competition-related potential, ultimately offering mutual benefits to energy consumers of both countries, was reiterated at the meeting, according to participants.

Engie imports gas from north for Heron, Gazprom not involved

France’s Engie has emerged as a new supplier of natural gas to the Greek market through the country’s northern gateway following a gas auction co-staged yesterday by DESFA, Greece’s natural gas grid operator, and its Romanian and Greek counterparts, to offer capacities available at the Romanian-Bulgarian and Bulgarian-Greek gas grid interconnections.

Engie secured a pipeline capacity at the jointly held auction to import natural gas into Greece for electricity generation by the energy firm Heron. Engie, which holds a 25 percent stake in Heron, has been active in Romania’s energy market, especially natural gas, for a number of years.

Though the amount to be imported by Engie, 1,500 MWh per day over a year, is modest, it represents yet another gas import agreement through Greece’s north that does not involve Russia’s Gazprom.

The agreement is competitively priced, compared to Gazprom’s offers, energypress sources informed.

Besides an import agreement involving DEPA, the Greek gas utility, and Gazprom, Russian gas is also imported into Greece through the northern gateway by Prometheus Gas, a joint venture of the Copelouzos Group and Gazprom Export. Prometheus Gas has captured a 20 percent share of the Greek market. The Mytilineos group also imports, buying directly from Gazprom.

The gas amount to be brought into the Greek market by Engie covers the pipeline capacity that was available at the Romanian-Bulgarian interconnection. The capacity at the Bulgarian-Greek interconnection was considerably bigger, amounting to 7,500 MWh per day over a year.

The pipeline capacity offered by the Greek, Bulgarian and Romanian gas grid operators at yesterday’s auction represented an amount that needed to be offered to third parties, according to EU regulations. The auction represented the first ever act of collective trans-boundary trade involving the three countries.

The EU has applied pressure on member states to utilize interconnections and diversify their sources of supply.

 

 

Rush needed to overcome IGB hurdles, stick to time frame

Greek and Bulgarian officials have admitted the prospective IGB gas grid interconnector, already well behind schedule, is facing new delays and issues. A rush will be needed to overcome various hurdles and stick to the project’s time frame.

Troubling news initially emerged from Bulgaria, when it was recently reported that  tenders for sub-contractors have been bogged down by legal action taken by firms not associated with the project’s development, including a winery.

ICGB, the IGB project’s consortium – involving the state-controlled Bulgarian Energy Holding (BEH) with a 50 percent stake, as well as DEPA, Greece’s public gas corporation, and Italy’s Edison with 25 percent stakes – has confirmed this news.

Despite noting that it expects this obstacle to be cleared within weeks, the consortium expressed concern of the emergence of similar issues in the future.

Earlier this month, the consortium announced the resignation of its chief executive Elio Ruggeri, who is now in charge of the LNG division at Italy’s Snam.

In comments offered this week, Bulgaria’s energy minister Temenuzhka Petkova insisted that the project’s current schedule remains valid. She also noted that EU funding worth 37 million euros and initially intended to finance a Bulgarian-Serbian interconnection could be redirected towards the IGB. The minister did not elaborate and offered no explanations as to how such a change of plan could impact the Greek-Bulgarian interconnection’s development and time frame. Petkova also informed that the IGB consortium could secure a more favorable financing agreement.

Her Greek counterpart Giorgos Stathakis, speaking at an Athens Energy Forum event yesterday, made reference to the IGB, noting its construction is expected to commence “within 2018”. Given the consortium’s most recent time frame, scheduling work to begin by this coming June, the project, it appears, is headed for a further delay.

Dimitris Tzortzis, the recently appointed chief executive officer at DEPA, Greece’s public gas corporation, believes work on the IGB will start in the third quarter this year. He described the project’s existing schedule as demanding. “We are depending considerably on continued full support from both the Greek and Bulgarian governments for the timely completion of related host government agreements,” Tzortzis commented.

The DEPA official added that he expects the IGB pipeline to begin operating in the second half of 2020.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Plenty of preliminary work is still needed before the project’s development commences.

The IGB is receiving full political support from Greece, Bulgaria the EU and US. Combined with the TAP pipeline, to run horizontally across northern Greece, the IGB promises to serve as a vertical route for the wider region. TAP and IGB officials are currently engaged in advanced talks for an agreement to interconnect the two pipelines.

 

IGB construction, procurement tenders to be announced January

Development of the Greek-Bulgarian IGB gas grid interconnector is expected to commence in mid-2018 as documentation concerning two project tenders, one for construction, the other for pipeline procurement, has been finalized, according to sources.

Both tenders are expected to be announced in January, which would enable the project to begin midway through next year, as ICGB, the project’s consortium, currently plans.

A number of key institutions, including the European Investment Bank (EIB), have expressed an interest in the project’s financing. Participation by the European Fund for Strategic Investments (EFSI) has not been ruled out.

The IGB is expected to be completed by 2020 along with TAP, the Trans Adriatic Pipeline, a project to transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing northern Greece, Albania and the Adriatic Sea, to southern Italy.

State-controlled Bulgarian Energy Holding (BEH) holds a 50 percent stake in the ICGB consortium, while DEPA, Greece’s public gas corporation, and Italy’s Edison control 25 percent stakes.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Its development promises to offer Azerbaijani natural gas an alternative route into southeast European markets. Procedures are already in motion for an extension to Serbia. The project will also enable LNG supply to regional countries currently subject to limited gas supply and facing major energy security issues.

Increased gas trading activity at Sidirokastro entry point

The implementation of a Capacity Allocation Mechanism (CAM) at Greece’s gas entry point in Sidirokastro, on the Greek-Bulgarian border, has led to increased trading activity.

The mechanism is designed to facilitate gas transport and trading in the EU.

As a result, a greater number of importers and suppliers are now purchasing natural gas amounts at this border point. More specifically, three gas companies have imported gas amounts from the Sidirokastro gateway, whose capacity was fully covered until recently.

However, full implementation of an interconnection agreement, still encountering practical issues, is needed to further facilitate trade.

Besides DEPA, the Public Gas Corporation, two more firms, Promitheas (Copelouzos, Gazprom) and M&M (Mytilineos, Motor Oil Hellas) are now actively involved in gas imports. ELFE has also purchased gas amounts at the border. So, too, have a number of traders and industrial consumers, such as the energy firms Heron and Cedalion, as well as Yioula, Greece’s biggest glasswork industry, and Elval (Hellenic Aluminium Industry).

The increased activity is reshaping market shares. Promitheas currently holds approximately 20 percent of the gas import market, while M&M, supplying industrial consumers, has also gained a considerable share.

Increased import potential is also possible at Kipoi, the Greek gas system’s second-biggest entry point (to and from Turkey). Negotiations concerning the implementation of an interconnection agreement and CAM system at this entry point are now in progress.

Efforts have been made in the past to forge an opening towards the east. A big market, Turkey would offer major trading opportunities if obstacles are cleared.

 

 

 

DESFA sees Alexandroupoli LNG unit as Revythoussa rival

Officials at DESFA, the natural gas grid operator, are viewing plans for the development of a floating LNG terminal (FSRU) in Alexandroupoli, northeastern Greece, as a rival project for the operator’s existing facility in Revythoussa, an islet just off Athens.

Gastrade, a Greek natural gas infrastructure company behind the Alexandroupoli FSRU project’s development, yesterday signed a cooperation agreement with DEPA, the Public Gas Corporation, formalizing their affiliation for the prospective LNG terminal in the country’s northeast.

Meanwhile, DESFA is currently upgrading its Revythoussa LNG terminal. The upgrade, budgeted at 45 million euros and expected to be completed in approximately ten months, includes the addition of a third tank and a port infrastructure enlargement that will enable larger-capacity tankers to dock.

Once the Revythoussa terminal’s upgrade is completed it will operate at just 20 percent capacity, based on the current level of activity at the facility. This essentially means the Revythoussa terminal will be in a position to cover increased activity, rendering a second LNG terminal in Greece needless.

The Alexandroupoli FSRU is being supported by the US and EU as its development would facilitate US gas supply across the Greek border to the wider Balkan region and help reduce Russia’s dominance.

However, regardless of whether LNG exports are made from Revythoussa or Alexandroupoli, a metering station situated at Sidirokastro, northern Greece, needs to be upgraded if LNG is to be transmitted to Bulgaria for wider distribution. This metering station is now being upgraded. The effort includes a capacity boost as well as a reverse-flow transmission system.

In addition, the Bulgarian network, currently saturated as a result of Russian gas supply, also requires an upgrade, including greater capacity, if Greek LNG exports are to be transmitted into the neighboring country.

Developers of the Alexandroupoli FSRU should not expect national gas system funding, DESFA sources noted.

 

 

US envoy displays interest in Greek, Bulgarian energy cooperation

The US Department of State’s Acting Special Envoy and Coordinator for International Energy Affairs, Mary Warlick, expressed a strong interest in Bulgaria’s regional gas interconnection projects, especially the IGB, to link Greek and Bulgarian gas transmission systems, during a meeting with leading Bulgarian government officials.

The developing energy partnership between Greece and Bulgaria, seen as crucial for energy security in southeast Europe, has drawn the attention of the USA amid its rivalry with Russia.

Besides Greek-Bulgarian energy cooperation, Warlick and the Bulgarian officials, Deputy Prime Minister Tomislav Donchev and Foreign Minister Ekaterina Zakharieva, also discussed other Bulgarain strategic plans in the energy sector, such as gas transmission interconnections with Turkey, Serbia and Romania.

In comments following the meeting, Zakharieva stressed that these projects are pivotal for energy supply diversification, not only for Bulgaria but the entire southeast European region.

Commenting on the Greek-Bulgarian IGB project, Zakharieva noted that the project’s development would enable a natural gas link between Europe’s north and south. Transmission of major Azerbaijani natural gas amounts, exceeding one billion cubic meters, would be possible once the Trans Adriatic pipeline begins operating, the Bulgarian official informed.

The IGB project also dominated a meeting in Sofia several days ago between Greek energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova. The two officials agreed on a final IGB market test to take place in autumn. Gas traders will be expected to submit binding bids for allocation of pipeline capacity.

Respective National Strategic Reference Framework (NSRF) funding available to the two countries through the EU funding program has been ensured for the IGB project.

 

IGB’s final market test to take place in autumn, officials agree

A final market test for the prospective IGB (Greek-Bulgarian Interconnector), entailing the submission of binding bids by gas traders for the allocation of pipeline capacity, will take place this coming autumn, officials agreed at a meeting in Sofia today involving the participation of energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova.

EU funding for the IGB project has been ensured through respective National Strategic Reference Framework (NSRF) programs, Teodora Georgieva and Konstantinos Karayannakos, the executive officers of ICGB, the consortium established to develop the IGB project, informed the meeting’s participants while also stressing that major progress has been made over the past two years.

The project’s licensing procedure is at an advanced stage and awaiting pending regulatory decisions, the ICGB officials informed.

Stathakis and Petkova also discussed the prospective floating storage regasification unit (FSRU) in Alexandroupoli, northeastern Greece.

The IGB and Alexandroupoli FSRU will be designed to complement each other while the development of these two projects promises to create a competitive market that will have a positive impact on regional natural gas price levels, the Greek energy ministry noted in a statement.

The productive cooperation achieved between Greece and Bulgaria in the energy sector promises to ensure natural gas supply diversification in southeast Europe, the ministry’s announcement stressed.

The two ministers pledged to further enhance the mutually beneficial Greek-Bulgarian cooperation in the energy sector.

Officials at the meeting agreed that the Alexandroupoli FSRU’s completion will need to coincide with the commercial launch of the IGB project, scheduled for early 2020.

IGB construction expected to begin at end of year

Construction of the prospective IGB (Greek-Bulgarian Interconnector) project will begin at the end of this year, officials involved in the project have ascertained.

According to sources, an additional market test aiming to increase the commitment of companies with respect to their pipeline capacity reservations is essentially already underway, despite the fact that the process has yet to be officially launched. Negotiations with gas companies are already being held.

Regardless of the results to be produced by these negotiations, the IGB project is expected to be developed as it ranks as a leading EU infrastructure priority.

 

Greece also impacted by Nord Stream II developments

A series of developments last week concerning the construction of the Russian Nord Steam II gas pipeline project could impact the southeast European region, including Greece, in various ways.

Maros Sefcovic, the European Commission vice president responsible for Energy Union, announced a timeline for talks with EU member states, at which authority will be sought by Brussels ahead of negotiations with Gazprom for the Nord Steam II, which would expand deliveries of Russian natural gas to Germany.

These talks with EU member states are expected to take place in late August, enabling negotiations with Russian officials immediately afterwards. Russia has not embraced the prospect of the European Commission’s step-by-step process, requiring bilateral agreements.

Europe is currently divided into two camps over Nord Steam II. On the one side, a number of countries have grouped together as the project’s development would deprive them of Russian gas transit fees. At the other end, Germany and various European companies involved in the pipeline’s prospective construction are pressuring the European Commission to endorse its development. Brussels will need to balance these opposing sides while also keeping in mind energy supply security in the EU.

Germany’s pressure has softened the European Commission’s view of the Russian pipeline plan, as indicated by a number of recent legal revisions.

Adding to the complexity, the US Senate recently voted in favor of sanctions against Russia, including in the energy sector, a development that would prevent Russian and foreign enterprises from engaging in oil and natural gas deals. These proposed sanctions still need to be signed by President Donald Trump to take effect. EU member states, especially Germany and Austria, both traditional Gazprom business partners, strongly object to the US Senate proposal.

As for Greece’s neighbors, Bulgaria has kept a close watch on the Nord Steam II developments. Following the cancellation of South Stream, Sofia proposed to Russia and other suppliers a plan entailing the establishment of a natural gas hub in Varna, on the Bulgarian Black Sea coast.

Russia’s reception to the idea has been lukewarm until now but the proposal is gaining some momentum. The development of Nord Steam II is expected to also provide impetus to the Bulgarian proposal, a submarine crossing through the Black Sea to Varna, its intention being to supply the wider region, including other parts of Europe. This is an alternative plan to Turkish Stream, also supported by Sofia, as a second priority.

Bulgaria’s stance runs contrary to the Greek position. Athens would prefer the Russian gas route to run through Greek territory, within the framework of the Poseidon plan. The two sides will need to strike a balance as both are seeking to work together to develop the IGB interconnector, which would offer a Greek-Bulgarian gas link.

 

Bulgarian, Fyrom energy developments monitored

Greek diplomats stationed in other Balkans countries are keeping a close watch on local energy-sector developments and their implications, positive and negative, for Greece’s aim of becoming a regional energy hub.

Most recently, Greek diplomats informed Athens of a change of guard at ICGB, the consortium behind the development and management of the prospective IGB (Greek-Bulgarian Interconnector) pipeline project. Teodora Georgieva was replaced by new CEO Valentin Haralambiev, who possesses extensive experience in gas-sector infrastructure projects and is expected to speed up the IGB project.

An objective has been set for this pipeline interconnection project to begin operating by early 2020.

Bulgarian Energy Holding (BEH) holds a 50 percent stake in the consortium, also including DEPA, Greece’s Public Gas Corporation, and Italy’s Edison.

BEH issued a statement noting that the natural gas interconnection with Greece represents a “significant priority for the Bulgarian government’s energy policy.”

According to the Greek Embassy in Sofia, Bulgaria’s interim energy minister Nikolay Pavlov, speaking to an audience of European energy authorities at last month’s 3rd Southern Gas Corridor Advisory Council, held in Baku, noted that his country’s government is working intensively so that construction of the project’s segment concerning Bulgaria may begin early in 2018.

The Southern Gas Corridor is a Brussels initiative promoting natural gas supply from Caspian and Middle Eastern regions to Europe, the aim being to reduce Europe’s dependency on Russian gas.

Greek diplomats have also been drawn to energy developments in the Former Yugoslav Republic of Macedonia (Fyrom).

Reporting on a recent roundtable discussion organized by Fyrom’s Chamber of Commerce on supply security concerning petroleum and other products, the Greek Embassy informed that participants agreed Thessaloniki port and Corridor X – a route linking the cities Thessaloniki, Skopje, Belgrade, Zagreb and Budapest – represent the most advantageous and safest passage for Fyrom’s trading and economic interests. The head of OKTA, an ELPE (Hellenic Petroleum) subsidiary, was among this session’s participants.

 

EFET files complaint against Greek, Bulgarian operators

The European Federation of Energy Traders (EFET) has filed a complaint to the European Network of Transmission System Operators (ENTSO-E) against the Greek and Bulgarian power grid operators, noting that the two are restricting trans-boundary trade between the two countries.

EFET described the conduct of IPTO, Greece’s power grid operator, and ESO, its Bulgarian counterpart, as abuse of their dominant positions in natural monopolies.

The complaint filed by EFET was prompted by IPTO’s decision to ban electricity exports on January 11 and 12 and ETO’s ensuing electricity export ban, which began on January 13.

EFET noted that the trans-boundary trade restrictions imposed led to the violation of guaranteed rights concerning interconnection access.

In its complaint, the federation also pointed out that the export ban negatively impacted market players who do not have access to alternative electricity sources, prompting significant financial damages for certain producers.

This EFET complaint is the first to be filed as a result of the developments prompted by the energy crisis in early January. As a result, both IPTO and ETO are now both being closely watched by European authorities.

Bulgarian nuclear power station promises wider market impact

The energy crisis affecting Greece and the wider region over the past few days, prompted by the increase in electricity demand amid freezing temperatures, has brought to the fore a number of important issues and prospects that promise to redefine the area’s energy map.

The prospect of the development of an additional nuclear power station in neighboring Bulgaria in the near future, which now appears likelier than ever before, would certainly bring about changes to the wider region’s energy market.

Such a development would permit Bulgaria to meet its domestic energy demands with far greater ease and export even greater electricity quantities.

The regional importance of a new Bulgarian nuclear power station – which would come as an addition to the country’s only other such facility in Kozloduy, northern Bulgaria, currently the biggest in the wider region – was made clear by the energy crisis of the past few days.

Greece was forced to interrupt electricity exports today, while a Bulgarian request for increased electricity imports from Romania on Monday was rejected as officials in Bucharest focused on meeting domestic electricity demand. Record electricity demand levels were struck in both Romania and Bulgaria.

It is no surprise that the European Union has turned its attention to matters concerning transboundary interconnections as part of the effort to integrate the European electricity market and also bolster energy security in the continent.

Assuming a new Greek-Bulgarian interconnection project goes ahead as intended, an additional nuclear power station in Bulgaria would enable greater amounts of low-priced electricity to be imported into Greece from the neighboring country.

Greece’s main power utility PPC, currently seeking to bolster its electricity trading activity in the wider region, an effort that would involve its Bulgarian subsidiary, can look forward to greater business prospects if a second Bulgarian nuclear power is developed.

China’s SGCC, which was recently declared the winning bidder of an international tender offering a 24 percent stake of Greek power grid operator IPTO, a PPC subsidiary, has made clear its intentions to upgrade IPTO’s role in the international interconnections game.

Bulgaria’s political leadership now needs to decide whether the country requires an additional nuclear power station.

 

 

Four more firms interested in IGB market test, Petkova says

Four additional companies have expressed an interest to take part in the prospective IGB (Greek-Bulgarian Interconnector) project’s second-round market test, entailing the submission of binding bids for allocation of pipeline capacity to traders, Bulgarian energy minister Temenuzhka Petkova announced today during a speech at an event organized in Sofia by ICGB, the consortium behind the pipeline project.

Petkova, during her speech, also noted that Bulgaria may seek to acquire a 25 percent stake in a prospective floating LNG station in Alexandroupoli, northeastern Greece.

Greek energy minister Panos Skourletis, who attended the Sofia event, stressed the IGB’s geopolitical and regional significance.

The two officials also held a meeting on the occasion of the Greek minister’s visit to the Bulgarian capital for talks on the IGB project, the Alexandroupoli LNG station, completion of work for installment of reverse flow systems on an existing natural gas pipeline linking Greece and Bulgaria, as well as other energy matters of mutual interest.

Though scheduled for October, the IGB market test’s second round has been delayed and will now most likely take place in November or December.

Both sides appear confident that the second round will produce positive results and give the green light for the pipeline infrastructure project’s development.

 

Energy Minister in Sofia next week for conference, IGB talks

Energy Minister Panos Skourletis will travel to Sofia next week for an energy conference and take the opportunity to meet with his Bulgarian counterpart Temenuzhka Petkova for a discussion on the prospective IGB Greek-Bulgarian interconnector’s upcoming market test, crucial for the project’s development.

Greek and Bulgarian officials are working frantically to prepare the market test’s second round, entailing binding bids for allocation of pipeline capacity to traders. Though scheduled for October, this second round has been delayed and will now most likely take place in November or December.

Both sides appear confident that the market test’s second round will produce positive results and give the green light for the pipeline infrastructure project’s development.

Speaking at Global Oil and Gas, an energy conference held in Athens yesterday, Dimitris Manolis, Head of International Activities and Projects at DEPA, Greece’s Public Gas Corporation, offered details on the IGB project.

The DEPA official noted that environmental permits for the project have been granted by authorities in both in Greece and Bulgaria, while the project’s entire route has also been endorsed.

A target date for the IGB’s commercial launch has been set for the second half of 2019, Manolis told the Athens conference.

IGB market test to be slightly delayed, activity heightened

Authorities involved with the IGB Greek-Bulgarian Interconenctor have expressed confidence over the project’s development, noting that the latest developments, both on entrepreunerial and political levels, ensure its actualization.

Much of the optimism has to do with a memorandum of cooperation signed just days ago and overseen by Maros Sefcovic, European Commission vice president responsible for Energy Union.

The gas infrastructure route, planned to run vertically to Ukraine, according to the memorandum, will utilize existing national networks for a pipeline that will have access to both LNG and natural gas transmitted through the TAP (Trans Adriatic Pipeline) project, planned to cut across northern Greece, Albania and the Adriatic Sea to supply Europe from the south.

The memorandum’s signing is expected to provide new impetus to the project’s development.

Meanwhile, one company that had taken part in the IGB’s first-round market test, for non-binding allocation of capacity, has withdrawn and been replaced by another. The market test procedure’s second round of binding bids is now expected to be delayed and not be completed in October, as had been scheduled. Instead, the second round will now most likely take place in November and December.

A considerable portion of the capacity requested through the first-stage market test is based on the prospective development of an LNG terminal in Alexandroupoli.

Considering the latest developments, the IGB project is expected to be endorsed by the European Commission even if its entire capacity is not taken up during the market test’s second round of binding bids, according to authorities linked to the project.

The IGB promises to offer a key alternative energy source in the eastern Balkans, all the way up to Ukraine.