South Kavala UGS bidders talk formations as deadline nears

Prospective bidders of an upcoming tender to offer an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north are deliberating over possible partnerships as the October 19 deadline for official expressions of interest approaches.

Greek gas grid operator DESFA, Energean Oil & Gas and GEK TERNA will participate in the tender, according to enegypress sources, while some market officials believe a Chinese company, not yet revealed, is also interested.

All three Greek companies have remained tight-lipped on possible partnership formations for the tender. GEK TERNA and Energean Oil & Gas are believed to be discussing the prospect of teaming up, while DESFA and the Chinese company will most likely enter the tender alone, energypress sources informed.

The tender, staged by privatization fund TAIPED, will offer rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Investments needed for the project’s development are estimated between 300 and 400 million euros.

The field is located approximately 6 kilometers from the west coast of the island Thasos, in the North Aegean Sea, at a depth of 52 meters.

Its development into a UGS facility promises to contribute to Greece’s energy security and that of southeast Europe.

Flight reconnections, geopolitics key for IPTO sale rescheduling

Rescheduling details of a privatization plan for the sale of an additional stake in power grid operator IPTO will depend on the restart of the Athens-Beijing flight route, the reestablishment of face-to-face contacts blocked by the pandemic, as well as a reduction in geopolitical tension between China and the west.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Skillful diplomacy will clearly be needed to overcome any EU and US objections to an increased SGCC share in IPTO. Video conferences would prove insufficient. Greek foreign ministry officials will need to make at least one trip to China for related talks.

Greek governmnent officials intend to travel to Beijing for work on various matters following the summer, sources informed energypress. Bilateral issues have accumulated during the several months of lockdown. Many cancelled meetings need to be rescheduled.

More crucially, in the lead-up, the Greek side will need to prepare for these Beijng meetings by working through related matters with officials in Brussels and Washington.

Sale of further stake in IPTO delayed by pandemic’s impact

A privatization procedure for the sale of an additional stake in power grid operator IPTO will not be able to resume for at least another two to three months as a result of the coronavirus pandemic’s negative impact on international markets, highly ranked energy ministry officials have told energypress. The ministry will wait for conditions to recover, the sources noted.

A legislative revision is needed to lift a restriction imposed by the country’s previous leftist Syriza government in 2016 not permitting the Greek State’s stake in IPTO to fall below 51 percent, the current stake held by the Greek State.

Though an amendment ending this restriction has been included in a draft bill covering environmental and RES matters, now headed to parliamentary committees for discussion ahead of ratification, considerable road lies ahead before the sale of a further stake in IPTO can take place.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Following his election victory last July, Prime Minister Kyriakos Mitsotakis, leader of the conservative New Democracy party, had announced a further stake of IPTO would be sold.

An official visit to Athens by Chinese president Xi Jinping last November added further impetus to the plan and earlier this year, deputy energy minister Gerassimos Thomas was planning to visit China for related talks.

However, talks between Athens and Beijing have remained stalled as a result of the pandemic.

 

Energean Power FPSO hull sails away from China

Energean Oil & Gas’ Enegean Power FPSO hull sailed away from the COSCO yard in China today and will now be towed to the Sembcorp Marine Admiralty Yard in Singapore, where the topsides will be integrated, before the completed FPSO is towed to the Karish field in Israel for installation and hook-up, the company has announced in a statement.

The sailaway of the hull from China represents the achievement of a key milestone in the Karish project timetable, the statement noted.

During the construction of the hull in China, more than 5 million man hours free of LTI’s have been completed. Including the construction of the topsides in Singapore and other relevant works, more than 10 million man hours free of LTI’s have been completed so far in the construction of the Energean Power FPSO.

Energean has also successfully completed the drilling of the three development wells in the Karish Main field and is confident that the three development wells can produce at combined rates of 800 mmscf/d, which is sufficient to fill the capacity of the FPSO (8 BCM per year), the company statement added.

On another important development, the Karish gas sales pipeline (30 & 24 inch) was shipped from Greece last week and offloaded successfully at Limassol Port, Cyprus.

The pipeline will be loaded from the Limassol port on PSVs and from them on the Karish Field pipe-laying vessel Solitaire.

The gas sales pipeline of approximately 90 km will transport gas from the Enegean Power FPSO to an onshore valve station at the Dor landfall in Israel.

First gas on the Karish project is on track for H1 2021.

Update on the Edison E&P acquisition

Also, Energean and Edison have entered into a formal amendment to the Sale and Pusrchase Agreement on 2 April 2020, in which:

  • the Algerian Assets shall be excluded from the scope of the acquisition of Edison E&P;
  • in recognition of the exclusion of the Algerian Assets, there will be an adjustment to the total consideration of the acquisition of approximately $150 million (as at the lock-box date of 1st January 2019).

Energean is working to complete the acquisition of Edison E&P as soon as is possible in 2020, subject to the approval of its shareholders and the other relevant governments, the company statement noted. Thereafter, completion of Energean’s agreement for the sale of Edison E&P’s UK and Norwegian subsidiaries to Neptune for a consideration of $250 Million plus contingent consideration of up to $30 million (as previously announced), will be completed as soon as is reasonably practicable, it added.

 

 

Natural gas, LNG, CO2 right, wholesale power prices down

Besides lower oil prices in international markets over the past few days as a result of the coronavirus spread and price war between Saudi Arabia and Russia, energy commodities across the board are under great pressure, which has led to price reductions for natural gas, CO2 emission rights and electricity.

Lower oil and gas prices are offering relief for the economy and enterprises. However, there are two sides to this story, positive and negative. On the one hand, the price drops are creating opportunities for suppliers and consumers, while, on the other, natural gas futures indicate a decline until the end of the third quarter this year, meaning markets anticipate a downward trajectory in Chinese consumption and no sign of an economic rebound until at least September.

Prices at the Dutch trading platform TTF, a key index for LNG, slid to a three-month low on Monday, registering 8.627 dollars per MMBTU, before edging up to 8.993 dollars per MMBTU yesterday. This index has fallen 39.4 percent since the end of December’s three-month peak of 14.2 dollars per MMBTU.

Besides shaping LNG prices, according to new pricing formulas adopted at Gazprom, the TTF also greatly influences the rise of Russian pipeline gas.

CO2 emission right prices have fallen by 13.6 percent between December and early February, from 26.74 euros per ton to 23.11 euros per ton. A slight rise has been registered this week, to 23.25 euros per ton on Monday and 24.07 euros per ton on Tuesday. Lower prices on this front are favorable for lignite-fired power stations as well as energy-intensive industries.

Prices have also fallen in Greece’s wholesale electricity market. In the day-ahead market, the System Marginal Price (SMP) fell from 49.2 euros per MWh on Friday to 41.42 euros per MWh on Monday before edging up to 43.12 euros per MWh yesterday. A rise to 50.44 euros per MWh is expected today.

 

Coronavirus prompting solar module shortage, higher prices

Solar farm investments in Greece are being affected by the coronavirus crisis in China, dominating global module supply in recent years.

Transportation difficulties, seen deteriorating further, have forced solar module  suppliers to trigger agreement clauses for extraordinary cases permitting delivery delays of at least 90 days.

Also, Chinese suppliers are making order revisions, sending out products in stock rather than items specifically ordered.

For the time being, this shortage has not prompted price changes for existing solar panel orders. However, price levels for new orders have risen by levels of as much as 10 percent, energypress sources have informed.

These revisions in delivery time and price level threaten to stretch certain projects beyond feasibility limits. In some cases, investors who had assumed a continual drop in solar module price levels may need to wait for prices to resettle before pursuing project plans.

A growing number of players in the Greek market feel the need for a deferral of solar project RES auctions. An official request is likely to be submitted to RAE, the Regulatory Authority for Energy. An immediate drop in price levels is seen as unlikely, even if the coronavirus spread is brought under control.

China intends to raise its domestic solar-panel installation objective in 2020 from 30 GW to 50 GW in order to offset its coronavirus-related GDP loss. If so, a far greater number of solar modules would be absorbed by the Chinese market, subsequently prolonging the global shortage and keeping prices higher for a sustained period.

According to various forecasts, Chinese solar module price levels will remain at escalated levels until the third quarter this year.

 

 

 

France’s Total wins intensely fought tender for 3 LNG orders

France’s Total has emerged as the winning bidder in an intensely contested tender staged by Greek power utility PPC for three LNG shipments between March and May, sources from abroad have informed.

The French company outbid rivals for all three shipments, totaling 2.66 million MWh, but price levels were driven to particularly low levels as a result of intense bidding, the same sources noted.

Over the past few weeks, LNG prices in Asia have slumped to record lows, including yesterday, battered by the negative impact of the coronavirus on trade. Many Chinese factories have been forced to interrupt operations. Meanwhile, US LNG is flooding markets.

Given the combined effect of these market conditions, many of twelve bidders said to have participated in PPC’s tender were prepared to submit offers as low as one percent below the Dutch TTF index, which has tumbled to a level of approximately 10 euros per MWh over the past few days.

Of the twelve participants in the PPC tender, whose deadline expired on Wednesday, the five most competitive candidates were asked to make their best and final offers yesterday.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

This tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

Energean offers FPSO Hull update, work in China continuing

Energean Oil and Gas, the oil and gas producer focused on the Mediterranean, has issued an update on the potential impacts of the Novel Coronavirus on the construction of the Energean Power FPSO Hull, which is currently being built in Liuheng Island, China, and the overall project timetable. Work on the hull is ongoing and, at this stage, Energean reiterates that the Karish Project remains on track to deliver First Gas in 1H 2021.

The Novel Coronavirus was recently identified in China and has spread to most provinces within China and several other countries, leading the World Health Organisation to declare the virus a “Public Health Emergency of International Concern”. In order to prevent the spread of the virus, several countries, including China, have issued emergency travel and transportation restrictions, which have had an immediate impact on the availability of labour and resources in affected areas, including Liuheng Island.

Energean has received a notice under its EPCIC contract with TechnipFMC in relation to the travel restriction constituting a Force Majeure event, potentially entitling TechnipFMC to claim an extension of time under the EPCIC contract. Energean has, in turn, issued corresponding notices to its buyers of Karish gas and other relevant counterparties.

The rapidly evolving nature of these circumstances is such that it is impossible, at this stage, to determine the overall impact, if any, on Energean’s project timeline. However, work is still progressing well in the Chinese yard with approximately 550 staff on site; and Energean is working actively with TechnipFMC to ensure that all appropriate measures are being taken to avoid or mitigate any delay. Based on the information available at this stage, Energean still expects the Karish Project to remain on track and deliver First Gas in 1H 2021. Energean shall provide further updates as the situation clarifies.

Energean highlights the importance of guaranteeing the health and safety of its employees and contractors and will act in accordance with instructions and guidance from the UK and Chinese health authorities.

IPTO, ministry, RAE seeking common ground for Ariadne tender

Officials at power grid operator IPTO, the energy ministry and RAE, the Regulatory Authority for Energy, are seeking common ground that would pave the way

a tender to offer a minority 39 percent share in IPTO subsidiary Ariadne Interconnector, an SPV established for the development of the Athens-Crete electricity grid interconnection.

IPTO is looking to attract an investor, or investors, for a minority stake in Ariadne as financial support for the costly project.

IPTO wants to maintain a majority stake in its subsidiary as the operator is determined to control the construction of a project it will eventually operate.

State Grid Corp of China (SGCC), holding a 24 percent stake of IPTO, is expected to participate in the tender. The Chinese company has already expressed interest for a 20 percent stake in Ariadne and has signed a related memorandum with IPTO.

If SGCC’s interest is limited to a 20 percent stake, then a second equity package carrying a further 19 percent is likely to be offered to other investors.

EuroAsia Interconnector, a consortium of Cypriot interests heading a wider PCI-classified project planned to link the Greek, Cypriot and Israeli grids, was expected to acquire a 39 percent in Ariadne. However, a dispute with IPTO over control of the wider project’s Crete-Athens section has distanced EuroAsia.

Energy minister Costis Hatzidakis and IPTO chief executive Manos Manousakis are both confident concerns raised by RAE over the tender’s procedure will be overcome and enable a launch of the competition within the first months of this year.

RAE is worried about complications that could arise and trouble the tender as a result of SGCC’s stake in IPTO. If not handled appropriately, the tender could spark protests from rival bidders claiming unfair competition, RAE fears. Also, the authority is well aware of Brussels’ sensitivity to the prospect of a wider Chinese presence in EU infrastructure.

 

Cippe 2020 in Beijing next March promises glimpse into oil, gas future

cippe, the world’s leading trade fair for the petroleum and petrochemical industry, hailed as the wind vane of the industry and the shortcut for key stakeholders to sense the change in the energy market, gathers global manufacturers, purchasers, engineers, officials, agents and media in Beijing at the end of March each year.

The next cippe event, the 20th edition, is scheduled to be staged March 26-28, 2020 at the Beijing New China International Exhibition Center.

cippe2020 will add one more exhibiting hall, for seven in total. In addition, a dramatic increase in the number and quality of exhibitors is expected, organizers noted.

Besides domestic giants such as CNPC, Sinopec, CNOOC, Jereh, KERUI, SANY, CIMC ENRIC, CASIC, JS, JERRYWON, ANTON, HBP, BL, Brightway, HBIS GROUP and so on, cippe2020 will have leading international exhibitors including Schlumberger, KOGAS, Naftogaz, SOCAR, CATERPILLAR, MTU, ARIEL, ALLISON, NOV, API and Cummins, etc.

In the past 19 years, cippe has brought together millions of high-quality visitors. The Global Buyers Invitation Plan has also received positive feedback from the market. cippe2019 attracted 120,000 professional visitors and more than 400 purchasing groups from home and abroad.

Through nearly 100 concurrent high-end forums, conferences and new product launches, visitors can interact fully with exhibitors and speakers, and learn a lot about the development of petroleum and petrochemical industry. cippe is where the participants’ practice becomes the mainstream trend, and the speakers’ opinions become the voice of industry.

cippe Gold Award of Innovative Product, “International Petroleum & Natural Gas Summit,” The International Petroleum and Petrochemical Technology Conference, Embassy (Oil & Gas) Promotion Conference, cippe Business Matchmaking Conference and other thematic events will create numerous interactive opportunities for the visitors and the exhibitors.

Contacts

cippe2020 Organizing Committee

For Exhibitors 
Mona Wang, 86-10-56176968
cippe@vip.163.com
cippe@zhenweiexpo.com

For Visitors 
Yolanda Zhao, 86-10-56176962
yolanda@zhenweiexpo.com

For Media 
Max Heinrich, 86-10-5617 6931
mxj@zhenweiexpo.cm

PPC in talks with over 10 local, foreign firms for RES ventures

Power utility PPC is considering renewable energy joint venture proposals by over ten companies, domestic and foreign.

The pool of firms interested in doing business with PPC includes Germany’s RWE, Italian companies such as Enel, French enterprises associated with the Greek power utility in the past, among them EDF, scores of Chinese companies, as was confirmed at a Shanghai forum early November, as well as numerous Greek companies.

PPC’s involvement in RES joint ventures will have an important place in the power utility’s new business plan, to be announced within the next 10 to 15 days, energy minister Costis Hatzidakis told a National Energy and Climate Plan (NECP) event yesterday.

The forthcoming business plan will officially signal the Greek power utility’s turn to the renewable energy sector, listing specific objectives.

Any partnership announcements should not be expected before the business plan’s presentation.

Plans for a PPC bond issue to finance the company’s expansion into the renewable energy sector are also in the making.

PPC’s favorable corporate image in Greece’s provincial areas, where renewable energy investments will be made, is a key factor drawing both local and foreign RES players towards prospective partnerships with the Greek power utility.

 

Danish waste-to-energy model, China offers examined by PPC

Electricity production through virtually zero-emission waste combustion, a method adopted in Denmark, is one of a number of options being examined by the Greek power utility PPC as part of the country’s decarbonized future.

PPC’s existing coal generators, headed for closure, imminently, could be transformed into waste-to-energy plants.

PPC has received proposals from Chinese companies. Cost and environmental matters will be key factors in any decisions made by Greek officials.

Joint ventures could be formed to utilize the output of waste management PPPs (Public Private Partnerships) in Greece. Three such facilities currently exist in the country but more are expected to open in the near future.

The positions of local communities in lignite-dependent regions, such as west Macedonia, in the country’s north, and the price of waste-generated electricity will be pivotal.

Denmark’s Copenhill waste-to-energy plant, possibly the world’s most advanced such facility, was launched last month. It is situated in the heart of Copenhagen.

Designed as a lush downhill slope to host skiing and other recreational activities, the Copenhill facility processes the waste of 550,000 homes and 45,000 businesses, providing electricity and heating for 150,000 homes. The unit is designed to take in approximately 400,000 tons of waste annually for combustion.

Gov’t encourages Chinese role in ELPE, DEPA privatizations

The Greek government has encouraged Chinese companies to take part in privatization fund TAIPED’s two major energy-sector sales, those of gas utility DEPA and Hellenic Petroleum ELPE.

A total of 16 bilateral agreements, incorporated into a List of Key Projects within the Cooperation Framework 2020-2022, were signed as part of an official visit to Greece by Chinese President Xi Jinping, heading a business delegation.

Beijing will now examine the projects proposed by Athens and encourage Chinese firms to participate.

Besides the forthcoming DEPA and ELPE privatizations, the Greek proposals include Chinese roles in the sale of an additional stake in power grid operator IPTO – China’s SGCC already holds a 24 percent stake – and the purchase of a stake in the operator’s subsidiary Ariadne, project promoter of the Crete-Athens electricity grid interconnection.

Though the list of key projects expresses a bilateral intention for cooperation, it is not binding, officials indicated.

Greece, broadening its energy-sector ties with China, needs to move carefully and comply with strict EU rules on domains of strategic importance such as refineries and natural gas.

China Energy in 4 Copelouzos Group wind energy projects

Domestic investment partnerships between the Copelouzos Group and China Energy Investment for four wind energy parks – in Thrace, Trikorfo (Karystos area, Evia), Mani and Crete – have been included in a catalog of agreements signed by officials yesterday as part of a visit to Greece by China’s President Xi Jinping, heading a Chinese business delegation.

The four wind energy parks are part of a strategic partnership signed in July, 2018 by the Chinese company and the Copelouzos Group for China Energy Investment’s entry, as a shareholder, in the Greek group’s portfolio of wind energy projects, totaling 1,500 MW.

China Energy holds a 75 percent stake in the Thrace wind energy park, already operating. Development of the Copelouzos Group’s three other wind energy projects is expected to gain momentum following the signing of yesterday’s agreements.

Other projects included in the Greek-Chinese catalogue, a list of six projects – energy related and not – include an intention by State Grid Corp of China (SGCC) to build on its 24 percent stake of Greek power grid operator IPTO; a waste incineration project on Rhodes; and expansion work at Piraeus port.

China Energy was established in November, 2017 through a merger between China Guodian Corporation and the Shenhua Group, launching its operations with an equity value of just over 17 billion euros, total assets of 235.6 billion euros, 66 subsidiaries and a workforce numbering 350,000.

The company, heavily dependent on coal but taking major steps in the renewable energy domain, was ranked 101st on the Fortune Global 500 list for 2018.

Chinese officials to table widespread energy investment interest

Chinese investors are looking to, more or less, cover the Greek energy sector’s entire gamut.

Talks during a two-day visit, today and tomorrow, by a Chinese delegation headed by China’s President President Xi Jinping, are expected to cover energy cooperation in the installation of smart power meters and fiber optics to networks, investments in natural gas-fueled power stations, energy storage, as well as joint ventures for solar, wind and biomass energy projects.

This widespread Chinese investment interest, more or less covering the sector’s entire gamut, also includes financial support as well as the sale of all types of technology needed.

The interest of Chinese investors was made clear to power utility PPC chief executive Giorgos Stassis on a trip to China a week ago.

Talks between officials will include interest by State Grid Corp of China (SGCC) to build on its 24 percent stake of Greek power grid operator IPTO and enter the equity make-up of the operator’s subsidiary Ariadne, project promoter of the Crete-Athens electricity grid link.

Joint investments with PPC and other players in the renewable energy domain will also be explored.

HEDNO/DEDDIE’s plan for the installation of smart power meters is another topic of interest for the visiting Chinese investors.

The next chapter of preceding talks with PPC officials for the development of gas-fired power stations is also expected.

Fuel shift alternatives of the power utility PPC’s prospective Ptolemaida V power station, originally planned as a coal generator, will also be tabled.

Just days ago, PPC officials, led by Stassis, the CEO, held a range of meetings at the Shanghai International Import Expo 2019 with China Development Bank, Shanghai Electric and China Three Gorges, holding a stake in Portugal’s EDP Renovaveis.

China Intellectual Electric Power (solar), ZTE (telecommunications) and CHINT (smart power meters) are among other companies also believed to be seeking to secure investments in the Greek market, sources informed.

SGCC interested in additional IPTO stake, Crete grid link role

The chief official at State Grid Corp of China (SGCC) is expected to officially express interest for an additional stake in Greek power grid operator IPTO as well as an entry into its subsidiary Ariadne, project promoter of the planned Crete-Athens electricity grid interconnection.

Wei Kou, the SGCC chairman, is scheduled to hold a meeting with Greek energy minister Costis Hatzidakis in Athens today.

The Chinese official is part of a visiting Chinese delegation spearheaded by President Xi Jinping. The group arrived yesterday.

The energy ministry has known about SGCC’s interest in both matters for quite some time now.

In July, Hatzidakis, the energy minister, had announced a government intention to further privatize IPTO. SGCC already holds a 24 percent share.

Ensuing reports on the additional IPTO stake that could be offered by the Greek government have ranged between 20 and 30 percent.

As for the Crete-Athens grid link, needed to resolve a looming energy shortage threat on the island, SGCC’s right to become involved is unclear. The European Commission needs to clarify whether the subsidiary of a certified operator – in this case, Ariadne – can develop national grid projects if third parties have entered as shareholders.

Quite clearly, the Greek government is keen on further energy sector collaborations with China. Athens, however, will need to move with particular care and abide by stricter EU rules concerning Chinese investments in European sectors of strategic importance.

Chinese investors drawn by green PPC plan, Ptolemaida V

Power utility PPC’s plans for a restructured green future, as part of the country’s full decarbonization objective, set for 2028 by Prime Minister Kyriakos Mitsotakis, have generated considerable business interest in China, by far the world’s biggest manufacturer of renewable energy equipment and developer of energy storage and electric vehicle technology.

Small, mid and large-scale Chinese investors have displayed strong interest, asking many questions, at a series of meetings with PPC chief executive Giorgos Stassis, in China for Shanghai’s International Import Expo 2019, running until November 10.

Besides seeking to generate sales of equipment, Chinese company officials, more crucially, are also looking to establish joint RES investments in all domains, from wind and solar energy to biomass and combined technologies. Interest for the development of new thermal units, as well as financial support by Chinese banks, has also emerged.

A conversion plan for PPC’s Ptolemaida V unit, still under construction and initially planned to operate as a coal generator but now being reconsidered for a switch to natural gas, biomass, solar or a combination of these, stands as a major attraction for investors and banks. Stassis, the PPC chief, has received various proposals for Ptolemaida V at the Shanghai event.

Work groups will be tasked with appraising these proposals once Stassis returns to Greece. His meetings yesterday included talks with China Development Bank, Shanghai Electric and China Three Gorges, holding a stake in Portugal’s EDP Renovaveis.

Besides green energy projects, not necessarily just with PPC, Chinese investors are also eager to penetrate Greece’s nascent electric vehicle market. Chinese companies are the world’s leaders in this domain. Highlighting this dominance, all 16,000 buses operating in the city Shenzhen are electric.

 

Major Greek energy companies represented for PM’s China trip

The country’s energy sector is well represented in a business delegation accompanying Prime Minister Kyriakos Mitsotakis’ current official visit to China.

Greek energy corporations primarily active in electricity, renewable energy and energy project construction are represented by highly ranked officials.

Power utility PPC, represented by chief executive Giorgos Stassis; and top officials from Mytilineos group, the Copelouzos group, GEK Terna and the Panagakos group have joined the Greek Prime Minister for the China trip.

A significant energy-sector agreement has already been established by the two countries. In 2017, SGCC, the State Grid Corporation of China, acquired a 24 percent stake of power grid operator IPTO, one of the biggest Chinese investments in Greece to date.

In addition, a number of Chinese companies, including China Energy and the Sumec group, have signed Memorandums of Cooperation with Greek enterprises such as the Copelouzos group and PPC.

In the renewable energy market, Chinese-controlled EDP Renoveis has been awarded capacity, through competitive procedures, to develop RES projects.

SGCC has indicated it could be interested in an upcoming Greek electricity market privatization to offer a stake in distribution network operator DEDDIE/HEDNO.

Ministry, DG Comp talks on PPC sale terms not over yet

Negotiations between the energy ministry and the European Commission’s Directorate-General for Competition for an agreement on the revised terms of the main power utility PPC’s follow-up effort to sell lignite units will continue this week but are not expected to exceed it as a crucial Eurogroup meeting of eurozone finance ministers is scheduled for next Monday, March 11.

PPC’s lignite disinvestment is a pending bailout requirement. It is one of the key commitments for the release, by the country’s lenders, of a one-billion euro tranche.

Throughout the previous week, the talks between the energy ministry and the DG Comp were said to be nearing a deal. The fundamentals of the new sale’s revised terms, to feature improved conditions for investors following the initial effort’s failure, have been set but participation details concerning new entrants still need to be clarified, sources explained.

“The main objective of the two sides is to resolve whatever pending issues remain in a way that will maximize the sale’s chances of success this time around,” one source informed.

PPC is also making a committed effort for a successful follow-up sale. Last week, the utility’s chief executive Manolis Panagiotakis provided the European Commission with a letter listing a series of factors he sees as crucial to the disinvestment’s success.

Panagiotakis drew attention to an EU law limiting investment activity of non-EU investors, which he views as an obstacle for the sale. Russian, Chinese and American players of repute are interested in the PPC sale, according to the PPC boss, currently in Beijing for talks with Chinese firms.

Brussels asks RAE to inspect Chinese entry into Greek RES sector, IPTO

RAE, the Regulatory Authority for Energy, acting on a European Commission request, has begun an examination process to determine if a strategic agreement between the Copelouzos group and China’s state-run CHN Energy for the latter’s acquisition of wind energy parks creates any EU regulation issues regarding fellow state-run SGCC’s (State Grid Corporation of China) recent 24 percent stake buy into Greek power grid operator, authority sources have informed energypress.

RAE has been asked to examine whether CHN Energy’s agreement to buy Copelouzos wind energy farms with a total capacity of 1,500 MW violates an EU directive concerning the separation of a single entity’s activities in energy production, supply and transmission, according to the same sources.

In essence, RAE is being asked to inspect IPTO’s current certification as a result of SGCC’s purchase of a stake in the Greek operator before determining whether a follow-up certification process will be needed.

Much ground needs to be covered before the strategic agreement reached between the Copelouzos group and CHN Energy turns into an actual deal, the RAE sources told energypress.

The European Commission’s intervention is also linked to CHN Energy’s interest in the main power utility PPC’s ongoing sale of the Meliti and Megalopoli lignite-fired power stations, part of a bailout-required sale of PPC lignite units, the sources admitted.

Brussels increasingly vigilant towards Chinese investments

The European Commission is maintaining a passive yet increasingly vigilant watch on Chinese energy-sector investments in Greece and other EU member states, Brussels officials have indicated in comments to journalists.

China’s penetration of European markets is not viewed negatively as long as the related entrepreneurial activity complies with EU law, officials in Brussels pointed out.

Highlighting this intensifying lookout, Chinese initiatives in the Greek market were raised at a Brussels news conference held by European Commission officials.

Journalists forwarded questions concerning last year’s acquisition by SGCC (State Grid Corporation of China) of a 24 percent stake in Greek power grid operator IPTO, as well as CHN Energy’s interest in an ongoing bailout-required sale of main power utility PPC lignite assets, including the Meliti and Megalopoli power stations.

“Chinese investments can take place as long as they are in line with EU law and meet all obligations regarding electricity supply sufficiency,” one Brussels official noted. “The extent to which this is being observed in Greece’s case will be evaluated when the time comes to do so.”

DEPA, Cheniere discussing two time slots for LNG shipments

Gas utility DEPA and leading US energy exporter Cheniere, engaged in advanced talks for a first LNG shipment to the Greek market, have agreed on two possible time slots for orders, the first during the opening months of 2019, to cover peak winter-season demand, and the second for shipment in July or August to coincide with elevated summer-season energy demand.

The arrival of American LNG to the Greek market is also expected to test – in practice – the compatibility of American gas and local infrastructure and pave the way for long-term agreements, pundits have noted.

A decision by Beijing to impose tariffs on US energy-related exports to the Chinese market as a response to US tariffs on Chinese products is expected to prompt a redirection of considerable US gas amounts to other markets, primarily European.

DEPA and Cheniere officials are believed to be discussing both spot market and contract orders.

ELPE acts against any possible fallout of US sanctions on Iran

ELPE (Hellenic Petroleum) has stopped placing new Iranian crude orders and also settled the biggest part of an older outstanding amount owed to the country’s state-run oil company as protection against any negative fallout that could result from US President Donald Trump’s new sanctions against Iran, announced in May.

Like other petroleum firms in various countries, ELPE reached its decision to stop ordering Iranian crude to safeguard itself against a variety of problems, including exclusion from transactions, with American banks and oil companies.

The US president has issued a strong warning to anyone trading with Iran, following his re-imposition of sanctions on the country.

“Anyone doing business with Iran will NOT be doing business with the United States,” the president tweeted.

Some re-imposed sanctions have just taken effect and tougher ones relating to oil exports will begin in November.

The EU, China and India have announced they do not intend to follow the American example and impose sanctions on Iran, as they had done in 2012, when the US last imposed sanctions on the country, international news agencies have reported over the past few days. However, all three could end up succumbing to market pressure if their oil firms find themselves in danger of being blocked out of US financial and oil markets.

Returning to ELPE, the Greek petroleum firm has already taken action to fill the void created by its decision to stop placing Iranian crude orders. A wider strategy adopted by the firm’s administration to diversify crude supply sources for ELPE’s three refineries – two west of Athens in Aspropyrgos and Elefsina, as well as a third facility in Thessaloniki – has helped cover the shortage.

According to ELPE’s annual economic report for 2017, Iranian and Iraqi crude represented 22 percent of total orders placed by the Greek firm. Russia and Kazakhstan each represented 10 percent of ELPE’s crude orders in 2017, Saudi Arabia supplied 5 percent, Mediterranean countries provided 9 percent, as did Libya, Egypt’s share was 4 percent, while various other countries supplied 13 percent.

Iranian crude exports declined by 300,000 bpd (barrels per day) to 2.3 million bpd in July as a result of reduced orders by European refineries, according to international news agency reports. Officials in Washington anticipate Iran’s crude exports could drop to a level of less than one million bpd.

 

 

 

JRC examining prospect of EU-China grid interconnection

The Joint Research Center (JRC), the European Commission’s science and knowledge service, is examining the prospect of a gigantic EU-China grid interconnection project that would also offer access to the enormous renewable energy potential offered by intermediate areas.

The idea was first proposed by Chinese officials in 2016. JRC, which employs scientists to carry out research in order to provide independent scientific advice and support to EU policy, has begun exploring such a project’s potential. Its cost is expected to reach between 15 and 28 billion euros, depending on details.

Domestic Chinese interconnection projects, to link north and south, are now in progress.

According to Euractiv, the European media platform, JRC is examining three different routes for this gigantic interconnection, based on a plan avoiding sensitive areas. The interconnection could end up measuring a length of anywhere between 5,000 and 8,000 kilometers.

The shortest EU-China route would start from China’s northwest and run through Kazakhstan, Russia and Ukraine. Its proximity to Mongolia, whose wind energy potential is massive, is a positive feature but the route’s dependency on Russia and Ukraine is seen as a drawback.

The second route being considered would run through the Caspian and Black Sea. However, the installation of underwater power cables needed for this route significantly increases the project’s development cost.

The third option being looked at by JRC, which represents the longest route, begins from northwest China and runs through Myanmar, India, Pakistan, Afghanistan, Iran and Turkey. Land surface challenges are a problem but this extended route does offer an opportunity for links with many energy sources along the way.

The JRC study acknowledges restrictions in China’s infrastructure but sees this as an opportunity for upgrades.

As a result of the time zone difference between the EU and China, development of an interconnection linking the two would offer opportunities for major flexibility boosts that would enable more effective handling of electricity demand peaks.

SolarPower Europe, the EPIA (European Photovoltaic Industry Association), has described the interconnection prospect as extremely interesting but notes that development of the EU market, the aim being to foster and further incorporate RES units into the system, remains the priority.

 

Chinese, US investors buying local Euroenergy RES interests

The Libra Group, an international corporate group active in energy, aviation, hospitality, real estate, shipping and diversified investments that is wholly-owned by the Logothetis family, is selling a portion of its Greek RES interests.

According to energypress sources, the group intends to hold on to about one third of its local PV investments and one quarter of local wind energy interests.

A Chinese firm is believed to have secured the PV units placed for sale by the Libra Group while a powerful US fund, already prominently placed in the Greek market, is expected to add the group’s wind energy units to its portfolio.

Interestingly, Euroenergy, the group’s company handling renewable energy investments in Europe, has spent the past three to four years working to strengthen its portfolio through acquisitions of developed wind parks and project licenses.

In 2016, Euroenergy bought three wind parks possessing a total capacity of 120 MW from French group EDF.

The Libra Group is expected to use the proceeds of the sales to cover loans.

Euroenergy maintains a prominent RES portfolio in Greece, Romania and Latvia. The Libra Group’s  investments in Greece also include the Grace boutique hotel chain as well as a series of investments held  independently and with partners.

China announces plan to free electricity trading market

The National Development and Reform Commission (NDRC) of China and National Energy Administration (NEA) have issued a document called “Pilot Plan for Wholesale Distributed Generation Electricity Market”, outlining a plan for free electricity trading in China.

This move signals that the Chinese Central Government is committed to electricity reform as the document provides guidance for wholesale DG market reforms as well as instructions on how provinces not within the scope of the pilot program should gradually make the transition towards a more market-based approach of electricity generation.

The provisions set forth by NDRC and NEA calls for the expansion of long-term market-based “direct trading”. This will enable major-scale electricity consumers such as factories, retailers, and offices to directly buy electricity from electricity generators through bilateral agreements and a centralized auctions mechanism called “direct trading.” It is the first time that the market pilots have focused almost entirely on implementation of renewable electricity direct trading.

Direct trading will mean less dependency on subsidies for PV as PV would compete head-to-head with coal-fired power plants. PV manufacturers will thus have no choice but to accelerate the decrease in cost of production.

Photovoltaics manufacturers are now looking into how to make solar competitive when directly competing with coal, or how to increase industry’s share of industrial solar electricity consumption.

At JinkoSolar, a Chinese manufacturer of photovoltaics and developer of solar projects, the focus is on bringing the most appropriate technologies to the market. Providing technology that balances module price and performance, this company is focusing on promoting half-cell technology.

Half-cell modules deliver an additional 5-10Wp per panel compared to their non-half-cell conventional counterparts, without adding much cost. Also, half-cell modules have enhanced shade tolerance due to their optimized circuit design and decentralized junction boxes. The combination of increased output performance at a lowered marginal cost with enhanced shade tolerance promises rapid growth for half-cell modules over the next five years.

A global leader in the solar industry, JinkoSolar distributes its solar products and sells its solutions and services to a diversified international utility, commercial and residential customer base in China, USA, Japan, Germany, the UK, Chile, South Africa, India, Mexico, Brazil, the United Arab Emirates, Italy, Spain, France, Belgium, and other countries and regions.

JinkoSolar has built a vertically integrated solar product value chain, with an integrated annual capacity of 6.0 GW for silicon ingots and wafers, 4.5 GW for solar cells, and 7.5 GW for solar modules, as of June 30, 2017.

JinkoSolar has over 15,000 employees across its 8 productions facilities in China(5), Malaysia, Portugal and South Africa, 16 oversea subsidiaries in Japan (2), Singapore, India, Turkey, Germany, Italy, Switzerland, USA, Canada, Mexico, Brazil, Chile, Australia, South Africa and United Arab Emirates, and 18 global sales offices in China (2) , the UK, Bulgaria, Greece, Romania, United Arab Emirates, Jordan, Saudi Arabia, Kuwait, Egypt, Morocco, Ghana, Kenya, Costa Rica, Colombia, Brazil and Mexico.

 

 

IPTO head expresses interest for more Chinese partnerships

The strategic partnership recently established between IPTO, Greece’s power grid operator, and SGCC (State Grid Corporation of China), which acquired a 24 percent stake in the operator, has so far proved exceptional, IPTO chief executive Manos Manousakis told Chinese news agency Xinhua.

The results of this partnership are already apparent in IPTO’s improved performance, which is why the operator plans to seek further collaborations with Chinese partners, Manousakis noted.

IPTO recently signed a Memorandum of Understanding with CDB, the China Development Bank, one of the world’s biggest banking institutions. CDB has expressed an interest to finance companies and projects in Greece. IPTO hopes that CDB financing will provide impetus to the operator’s ambitious growth plan.

“We signed a very important memorandum of understanding with China Development Bank to explore the possibilities of financing our new projects and for the company’s capital,” Manousakis told the Xinhua agency. “Major interconnection projects on the Greek mainland and islands, as well as international interconnection projects in the Mediterranean all lie ahead,” he added.

Japan’s Hitachi widens Asian interest in PPC unit sale plan

Though European interest in the main power utility PPC’s bailout-required unit sale package, until now a lignite-only offer, has remained limited to investors from the continent’s east, Asian interest is broadening, as suggested by Japanese consideration following Chinese.

Japan’s Hitachi corporate group, which has taken on constructing the utility’s Ptolemaida IV, a project budgeted at 1.4 billion euros, is also eyeing the PPC units sale, sources have informed.

It is believed the Japanese company’s buying interest is combined with an interest to upgrade ageing PPC units and construct new ones, key activities at Hitachi Power Europe. Interestingly, Japanese investors are extremely selective in their investment choices, as is highlighted by the country’s limited Greek market presence.

Meanwhile, Greek officials, including government and PPC authorities, are continuing their negotiations with the European Commission’s Directorate-General for Competition over the units to be included in the utility’s sale package.

Certain sources are claiming that Brussels authorities have eased up on previous objections concerning the inclusion of a Meliti unit license into the sale package. DG Comp authorities have questioned whether the sale of a permit to build represents a disinvestment move. This Meliti license is now seen as an asset by DG Comp officials, sources noted.

It remains to be seen whether PPC’s Amynteo or Megalopoli lignite-fired facilities will be included in the package. Greek officials believe the Amynteo unit proposal fully satisfies the procedure’s requirements, rendering any talk of Megalopoli’s inclusion into the sale package as unnecessary. Even so, Greek officials are fully aware of the fact that Brussels, not yet convinced of the local PPC unit sale proposal, has kept Megalopoli on the negotiating table.

Brussels sees the inclusion of the Amynteo facility as a costly option as this unit is ageing and requires an 80 million-euro revamp. Of course, if performed, the facility’s lifespan would be extended to 2035.

 

 

 

 

EBRD: China capitalizing on Greek energy market openings

A European Bank for Reconstruction and Development (EBRD) report monitoring China’s investments in Europe, whose findings on Greece were presented in Athens yesterday, notes that China, sensing market opportunities, has been able to enter the Greek market after being permitted to do so by European authorities, However, the country is now facing tightening conditions being engineered by the EU, the report mildly suggests.

The EBRD report, authored by Dr. Jens Bastian and funded by the Central European Initiative, an intergovernmental forum committed to supporting European intergration through cooperation among member states, details China’s aggressive investment approach in Greece and places particular emphasis on the local energy sector.

Attention is paid to Greece’s role in China’s wider plans. The report describes Greece as a gateway for Chinese investments in the wider Balkan region. China’s strategy, continuously bolstering the country’s standing abroad, has cultivated aspirations for the Balkan and central European markets, the EBRD report notes.

It also notes that Chinese investors, contrary to other interested parties, have made the most of the subdued investment activity in Greece and shown a willingness to take risks and pursue long-term business strategies.

The EBRD report also points out that reliable ties have been established between Chinese investors and Greece’s political and business communities. As a result, Chinese investors are now placed in the pole position for Greek projects, it notes.

Reference is made to two major Chinese energy-related moves in Greece. One concerns the interest of the China Development Bank (CDB) to reinforce its presence in Greece, primarily through financing energy sector projects, as has been pointed out by the bank’s chief, Hu Huaibang. CDB and the Bank of Greece recently signed a memorandum of cooperation.

The recent entry of SGCC (State Grid Corporation of China) into IPTO, Greece’s power grid operator, as a strategic partner with a 24 percent, is also presented in the report. This agreement ranked as the second largest investment to be made in Greece in 2016. Another Chinese investment, Cosco’s takeover of the Piraues Port Authority (OLP), topped the list.

 

 

PPC units sale interest limited to east Europe, China investors

Investor interest in main power utility PPC’s approaching bailout-required sale offer of lignite units is restricted to east European firms, especially Polish and Czech, as well as China, all of which are expected to seek the backing of local partners, sources have informed.

Greek officials, who will discuss the PPC unit sale plan at the Directorate-General for Energy and Directorate-General for Competition in Brussels on Monday, will present these expressions of interest made so far as part of the effort to examine the level of attractiveness of Greece’s lignite-only offer.

The Greek sale plan will need to be deemed as attractive for investors if the European Commission is to endorse it. The offer will also need to represent 40 percent of PPC’s lignite capacity and also permit the utility to remain sustainable.

PPC officials contend their sale package plan was prepared with genuine intentions and does not aim to undermine and delay the sale procedure. Even so, it does not seem capable of luring central European investors, as was highlighted by the absence of EdF representation in French President Emmanuel Macron’s delegation assembled for an official two-day visit to Athens last week.

France’s EdF, which already maintains a Greek market presence through Italian energy firm Edison, ought to have been represented in Macron’s visiting delegation if the PPC sale plan was viewed favorably by European investors.