Petroleum group Motor Oil Hellas’ intent to further bolster its position in the electricity market is highlighted by its decision to participate, with a 50 percent stake, in a new natural gas-fired power station being jointly developed with GEK Terna in Komotini, northeastern Greece.
More specifically, MOH’s involvement in this project can be linked to three key strategic reasons: vertical integration; market diversification beyond the refining sector; and the market role of the group’s planned FSRU in Korinthos, the Dioryga Gas project.
MOH’s participation in the Komotini natural gas-fired power station, coming as an addition to another such unit, Korinthos Power, in which the petroleum group holds a 35 percent stake, is expected to further bolster its vertical integration in the electricity market.
MOH, in the retail electricity market, is represented by supplier NRG, a company displaying dynamic growth with market share gains.
The group’s acquisition of a 50 percent stake in the Komotini power plant, to offer an 877-MW capacity, will boost its presence in electricity production and creates further opportunities for trade synergies.
The group’s Dioryga Gas project in Korinthos promises to supply large LNG quantities to the Komotini power station.
According to some sources, MOH is also discussing a possible entry, as a stakeholder, into other natural gas-fired power stations that are currently being developed, so that these, too, may be supplied with LNG by the group.
Approval by RAE, the Regulatory Authority for Energy, of gas grid operator DESFA’s ten-year grid development plan, covering 2021 to 2030, with the inclusion of petroleum group Motor Oil’s “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, paves the way for this unit’s actualization.
Motor Oil anticipates the FSRU, promising to offer yet another natural gas entry point to the domestic system, can be launched by the end of 2023.
To accept LNG via sea routes, the floating storage regasification unit’s capacity is estimated at 2-3 bcm per year.
The “Dioryga Gas” FSRU project was incorporated into DESFA’s ten-year development plan following amendments to a preliminary plan, made once an agreement had been reached between the gas grid operator and Motor Oil.
This agreement ended a dispute between the two sides over the project’s absence from the operator’s ten-year plan. Motor Oil protested against the FSRU’s exclusion, expressing its disapproval to DESFA as well as RAE.
The project’s inclusion on DESFA’s ten-year plan will enable Motor Oil to take investment decisions needed for its development.
The petroleum group is currently also examining the regulatory and commercial frameworks concerning the project with the aim of offering optimal services to users. Motor Oil intends to stage a market test in 2021.
The “Dioryga Gas” FSRU project will ease the saturation pressure on Greece’s other FSRU, on the islet Revythoussa, just off Athens, reinforce gas supply to the Greek market as the country’s LNG storage capacity will increase by 80 percent, and also facilitate further penetration of natural gas in remote parts of the country.
Petroleum group Motor Oil wants a prospective FSRU project for Corinth, west of Athens, included in gas grid operator DESFA’s ten-year plan, it has noted in a letter forwarded to RAE, the Regulatory Authority for Energy, as part of a related public consultation procedure.
A floating LNG terminal at Corinth would offer multiple benefits for the natural gas markets of Greece and the wider southeast European region and, therefore, must be included in DESFA’s ten-year plan, Motor Oil supported in its letter.
RAE has already awarded a license for the project but a decision concerning a future capacity commitment at this new national grid entry point has remained pending since last June.
The project is strategically important as a very large proportion of Greece’s current – and near-future – gas imports enter via Turkish territory, Motor Oil pointed out. The Corinth FSRU would further diversify Greece’s supply sources, without geopolitical risks or restrictions, as the facility will be able to absorb supply from anywhere in the world, the petroleum group added.
This FSRU would ease congestion at the existing Revythoussa unit off Athens and contribute to energy supply security, Motor Oil, operating a major refining facility in Corinth, also noted among other factors.
ESAI/HAIPP, the Hellenic Association of Independent Power Producers, has also expressed support for the Corinth FSRU, noting, in its letter, the facility would offer a new gas grid entry point, desaturate Revythoussa and help offer more competitively priced natural gas to the Greek market.