Next step taken for gas system upgrade’s market test

Gas grid operator DESFA is preparing to take a next step towards a binding stage for a market test concerning an upgrade and expansion of the Greek gas transmission system by putting the procedure’s guidelines to public consultation, energypress sources have informed.

Based on the foreseen procedure, the guidelines, along with all project proposals, will be submitted to RAAEY, the Regulatory Authority for Waste, Energy and Water, for approval ahead of the beginning of the market test’s binding stage, planned for May.

The market test’s overall procedure began last year with a non-binding stage that attracted grid-capacity requests covering 2024 to 2050 from a total of 27 companies.

Seventeen of the 27 requests were submitted by companies from abroad, mainly central and southeast Europe, as well as the USA. This turnout highlights Greece’s upgraded role on the regional energy map. The other ten requests were submitted by Greek companies.

Authorities are less confident of a solid turnout by investors in the binding phase as demand for natural gas has been on the decline.

 

Brussels set to approve state support plan for Prinos CCS

The European Commission is set to approve Greek State funding support for Energean’s Prinos CCS project following the completion of a third round of exchange between Greece’s energy ministry and the Brussels authority on the issue, energypress sources have informed.

Pre-notification of the support scheme was announced last June, but this was followed by three rounds of consultation entailing questions which the Greek ministry was required to answer, in line with the European Commission’s CEEAG procedures concerning guidelines on State aid in the climate, environment and energy sectors.

The Prinos CCS project has been included on the sixth edition of the EU’s PCI/PMI list.

Greek gas grid operator DESFA has already received funding support worth 75 million euros through the REPowerEU program for the development of a pipeline to serve carbon capture units planned to be installed by cement producers Heracles and Titan at their respective facilities in Milaki, on the island Evia, and Kamari, in the Viotia region, slightly northwest of Athens.

DESFA’s pipeline will deliver emissions from the two production plants to a carbon dioxide liquefaction facility, which will also be built by DESFA but will not be supported by REPowerEU funding.

The liquefied emissions of the two cement plants will then be transferred for permanent storage at the Prinos CCS, an underground facility to be developed by Energean.

Talks have begun at a European level, as highlighted in a recent European Commission report, for the establishment of an extensive CO2 transport network by 2050.

According to the report, CO2 transport pipelines in the EU could reach up to 19,000 km by 2050 and will require investments of between 9.3 and 23.1 billion euros.

Greece is considered among the European countries that can potentially contribute to CO2 storage, the Prinos underground storage facility being pivotal to this potential.

Swifter H2 framework action needed to secure EU funds

Procedures to establish a regulatory framework on hydrogen, biomethane and CCS need to be accelerated, otherwise the country risks missing out on crucial EU support funds promoting these sectors through the Energy Transition Fund, market sources have stressed. The regulatory framework needs to be finalized by a June 30 deadline.

Officials at RAAEY, the Regulatory Authority for Waste, Energy and Water, and the energy ministry are currently engaged in talks with market players interested in developing hydrogen-related projects but needing clarity.

The emergence of the hydrogen market as a new market poses regulatory and operational questions. It is not yet clear how these responsibilities will be distributed.

Though final decisions have yet to be taken, the energy ministry appears inclined to appoint RAAEY as the hydrogen sector’s regulatory authority and gas grid operator DESFA as its operator, as the sector will use networks already managed by this operator, energypress sources have informed.

As for distribution, the ministry appears likely to take the course taken in other European markets, where the role of distribution network operator is performed by companies that make the investments, resulting in multiple small distribution systems.

LNG demand in trucking, industrial sectors to rise in ’24

LNG demand in the trucking and industrial sectors, through gas grid operator DESFA’s LNG truck-loading service, enabling refueling of consumption points situated at a distance from the country’s gas network, appears set to rise in 2024, energypress sources have informed.

An increasing interest by market players for more time slots at DESFA’s truck-loading infrastructure, maintained by the operator at its Revythoussa terminal to load tankers, serves as a definite sign of the anticipated rise in LNG demand.

DESFA’s truck-loading infrastructure was launched in October 2022, while a first operational test took place in March, 2022. Three companies, Blue Grid, DEPA Commercial, and Motor Oil Hellas, took part in the testing with LNG trucks. The service has since been operating without issues and offers potential to serve a larger capacity.

Two industrial producers, Fthiotis Papermill, in central Greece, and dairy company Kolios, in Kilkis, northern Greece, have completed developing LNG storage and gasification facilities that are expected to begin operating in March.

At least ten more industrial producers appear interested in following suit by the end of 2024, sources have informed.

LNG appears set to play a bigger role in the heavy-transportation sector, the majority of cargo transfers planned for export to North Macedonia and Bulgaria.

Four refueling stations being prepared by Blue Grid in Athens, Thessaloniki, Patras and Ioannina will help broaden the LNG truck-loading market. The first two of these four stations – in Thriasio, on Athens’ western outskirts, a collaboration with Elin, and in Thessaloniki’s Sindos area, a collaboration with Kolokithas Fuels, are planned to be ready early April.

LNG usage by trucks promises operating cost savings of as much as 30 percent and significantly improved performance in terms of environmental impact.

Gas demand slump prompting LNG shipment cancellations

A significant decline in natural gas demand has prompted a number of gas companies to cancel shipments planned for the Revythoussa LNG terminal on the islet just off Athens, a complete contrast to the frenzy and congestion experienced at the terminal last winter, energypress sources have informed.

Low gas demand, the country’s mild winter weather, so far, and still-full gas storage units around Europe have made many previous orders unnecessary, sources at Greek gas grid operator DESFA, operating the Revythoussa LNG terminal, have explained.

DESFA is monitoring the situation to ensure gas-order cancellations do not impact operations at the Revythoussa LNG terminal, the sources noted.

The decline in natural gas demand, which ended 2023 21.6 percent down year-on-year, according to latest DESFA data, is expected to continue in the first quarter of 2024.

Though last year’s lower gas demand did show signs of a rebound in the final quarter of 2023, this was not enough to make up for weakened demand in the year’s previous quarters.

A year ago and, even more so in the autumn of 2022, high demand for slots at the Revythoussa LNG terminal had resulted in bids of as much as 4 million euros for a slot at DESFA’s related auctions.

At the time, the role of the Revythoussa LNG terminal was upgraded by the EU’s efforts to counter the energy crisis and end Europe’s reliance on Russian natural gas. As a result, Revythoussa became a strategic entry point for European gas imports.

EU support sought for half of Vertical Corridor’s €450m budgeted cost

The Vertical Corridor, a European gas-pipeline system now planned to involve TSOs of seven countries – Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova and Ukraine – will require an estimated 450 million euros in investments, energypress sources have noted.

Greek gas grid operator DESFA’s share of this sum will be minimal as a compressor station at Komotini, northeastern Greece, is all it will need to contribute to the project. All other upgrades to Greece’s gas grid, which, once completed, would enable the country to serve as a Vertical Corridor entry point, are already under development.

Officials of the six other countries participating in the project through initiatives taken by local TSOs believe that 50 percent of the project’s budgeted cost would need to be covered by EU funds if Vertical Corridor is to be materialized.

Project participants will push for political commitment from the European Commission by March as the upcoming European elections and any leadership changes would result in delays.

This issue was raised during a two-day ministerial conference staged by the Central and South-Eastern European Gas Connectivity Group (CESEC) in Athens last week, a gathering attended by European Commissioner for Energy Kadri Simson, but no indications of Brussels’ stance were offered.

Vertical Corridor project members are now expected to intensify their call to the European Commission for political support regarding the project’s development.

Following an initiative taken by Slovakia, an MoU was signed at the CESEC meeting in Athens to bring Moldova and Ukraine into the Vertical Corridor project.

Besides TSOs from the seven participating countries, Gastrade, a consortium established by the Copelouzos group for the imminent Alexandroupoli FSRU at Greece’s northeastern port of Alexandroupoli, and ICGB, the consortium behind the Greek-Bulgarian IGB gas pipeline, are also involved in the Vertical Corridor initiative.

Vertical Corridor meeting to gather project participants

Pivotal European energy infrastructure projects such as a vertical gas corridor, crucial for decoupling the region from Russian gas, an initiative which Ukraine and Moldova will officially join; a Greek-Cypriot-Israeli electrical grid interconnection; as well as hydrogen-related plans, will all be tabled for discussion at a meeting in Athens today between the energy ministers of southeast Europe.

Participants at the CESEC (Central and South Eastern Europe Energy Connectivity) meeting will be focusing on the most mature cross-border and trans-European gas and electricity projects that promise to enhance southeast Europe’s energy autonomy and upgrade its geopolitical importance.

Important remaining priorities concerning the vertical corridor include completion of its  Bulgaria-Romania pipeline segment; and to officially bring Ukraine and Moldova into the project’s picture. As part of the process, Greek gas grid operator DESFA is today expected to sign an MoU will all TSOs involved.

The vertical corridor includes a 182-km Greek-Bulgarian pipeline, the Bulgarian-Romanian section, and its interconnection with the network on the border with Ukraine and Moldova.

This corridor, combined with the imminent launch of the 5.5-bcm capacity Alexandroupoli FSRU, in Greece’s northeast, is expected to accelerate Europe’s effort to decouple the continent’s southeast from Russian energy dependence.

 

DESFA, Balkan operators to meet January for market test

Greek gas grid operator DESFA and Balkan counterparts plan to stage a next meeting in January to discuss the results of a inter-Balkan, first-round market test on the development of infrastructure channeling gas quantities to the Balkans and, by extension, even further north, via a Greek entry point.

Although operators retain autonomy and responsibility for the networks of countries they operate in, market interest, according to sources, is approaching the development of new infrastructure as a whole.

Market players are expressing interest in the development of gas pipelines from Greece to Romania, though this needs to be confirmed during a binding follow-up market test scheduled for next summer. Greece is being viewed as an entry point for transportation of gas deeper into the Balkans and then further north to major European markets.

Operators have completed demand assessment reports and are now proceeding to design projects ahead of the January meeting, the sources noted.

 

Wider interest for Greece-to-Germany hydrogen pipeline

Greek gas grid operator DESFA and operators in Bulgaria, Romania, Hungary, Slovakia and the Czech Republic are interested in developing a hydrogen pipeline running from Greece to Germany via these countries and intend to sign a Memorandum of Agreement early in the new year, energypress sources have informed.

Though the initial idea emerged in Germany and has been encouraged by the German system operator, it is also compatible with broader plans and initiatives undertaken by DESFA, particularly its staging of a market test for an upgrade of Greece’s national gas transmission system that would also serve future hydrogen transmission needs.

The prospect of a vertical hydrogen corridor has been embraced by all Balkan countries, as highlighted by the results of a work group staged in September and those of ensuing meetings.

The Greek gas grid operator is in constant communication with neighboring operators and operators of the wider European region as it is determined to take on an active role in regional developments, especially ones concerning the construction of a hydrogen network serving the continent, sources noted.

Germany, it is worth noting, is set to become the largest – by far – hydrogen import market in Europe in the coming decades, with plans to buy around 70 percent of the hydrogen needed to meet its targets.

REPowerEU: €75m for DESFA pipeline serving Prinos CCS

Gas grid operator DESFA stands to receive funding support worth 75 million euros through the REPowerEU program for the development of a pipeline to serve carbon capture units planned to be installed by cement producers Heracles and Titan at their respective facilities in Milaki, on the island Evia, and Kamari, in the Viotia region, slightly northwest of Athens.

The pipeline will deliver emissions from the two production plants to a carbon dioxide liquefaction facility, which will also be built by DESFA but will not be supported by REPowerEU funding.

The liquefied emissions of the two cement plants will then be transferred for permanent storage at the Prinos CCS, to be developed by Energean.

The liquefaction facility will be located at a coastal area in the wider Athens area, one possibility being the islet Revithoussa. The choice of the location will be made once technical studies have been carried out by DESFA.

The project is planned to be developed concurrently with Energean’s Prinos CCS. The pipeline is planned for launch in 2026 following its completion late in 2025.

DESFA gas pipeline projects in north progressing as planned

Major infrastructure projects being developed by gas grid operator DESFA as part of links with North Macedonia are progressing as scheduled in the operator’s ten-year development plan covering 2023 to 2032, energypress sources have informed.

A gas pipeline running from Nea Mesimvria in the country’s north to Gevgelija in North Macedonia’s southeast, as well as a metering station concerning the grid interconnection linking the Greek system with that of the neighboring country, North Macedonia, are progressing as planned and expected to be launched in 2025, the sources noted.

Furthermore, a high-pressure gas pipeline covering Greece’s west Macedonia region is expected to be operational within 2024, they added.

These projects, being developed as part of the Greek State’s decarbonization plan, comprise gas pipelines covering a total distance of 157 kilometers.

DESFA launches LNG truck loading service, suppliers keen

Gas grid operator DESFA launched its LNG truck-loading service at Megara, 45 kilometers west of Athens, earlier this week, finally enabling refueling of consumption points located at a distance from the country’s gas network.

The launch, on Monday, was preceded by an extensive performance test of the LNG truck-loading infrastructure last March. Three companies, Blue Grid, DEPA Commercial, and Motor Oil Hellas, took part in the testing with LNG trucks.

Interest in the new service is already strong as gas suppliers appear keen to utilize its flexibility to expand their customer base.

Transportation of LNG via specially designed trucks promises gas supply to industrial consumers, vehicle refueling stations selling gas, areas not connected to Greece’s gas network within Greece, as well as neighboring countries.

Plans are already underway for LNG delivery to distribution networks being developed by gas distributor DEDA in western Greece – in Patras, Agrinio and Pyrgos.

The first LNG station designed to facilitate gas distribution to remote areas was installed in September, 2022 by gas distributor EDA THESS at Elassona, towards Greece’s north. It will supply the local network. The DEPA Infrastructure subsidiary plans to do likewise for gas supply covering other areas, including the Greek islands Skiathos, Skopelos, and Alonissos.

DESFA’s LNG truck-loading initiative represents the first segment of a small-scale LNG supply chain, to be complemented by a small-scale LNG jetty under development at DESFA’s Revithoussa LNG terminal.

This infrastructure will enable bunker vessels to supply LNG-powered vessels, such as cargo ships and container ships, at Piraeus port. It will also allow for ship-to-ship refueling, supporting larger vessels, such as cruise ships.

Greek pavilion for first time at upcoming COP28 conference

Greece will have its own national pavilion at a UN climate change conference for the very first time when officials meet for a 28th edition, COP28, in Dubai November 30 to December 12, sources have informed.

Over 25 events are planned by the energy ministry to promote Greek energy projects contributing to the energy transition, the sources noted.

The country’s presence at the conference with an independent pavilion comes following intensive efforts since last year. The Greek pavilion will provide a platform for crucial Greek energy projects.

At the preceding event, COP27, the then-Secretary General of Energy and Mineral Resources, Alexandra Sdoukou, now the deputy energy minister, had presented a GR-Eco Islands initiative, involving small islands that can serve as examples, models and case studies for green sustainability as a whole.

At COP28, the energy ministry will be organizing – with Sdoukou at the helm – a series of events showcasing, internationally, the country’s initiatives on sustainable development, green energy and energy transition. DESFA, the gas grid operator, IPTO, the power grid operator, and SEV, the Hellenic Association of Industrialists, will be involved, as will Enterprise Greece, the official investment and trade promotion agency of the Greek State.

Prinos CCS state aid talks with European Commission begin

Prinos CCS, a carbon capture and storage project being promoted by upstream company Energean as Greece’s first CCS facility, at a depleted underwater Prinos field, south of Kavala, is approaching the stage of development.

The Greek ministry has pre-notified the European Commission on a relevant support scheme, within the framework of Climate, Energy and Environmental Aid Guidelines, allowing exceptions to an EU ban on state aid in the climate, environment and energy sectors.

The ministry’s pre-notification is expected to initiate consultation between the two sides for the formation of a support scheme that will need to be appraised and approved by Brussels.

Greek officials have also submitted a funding request for 50 million euros through the REPowerEU facility.

Prinos CCS has been included in a sixth edition of a PCI/PMI list, which was given the green light yesterday by a relevant Brussels committee but still needs to be approved by European Parliament and the European Council.

PCI/PMI status would facilitate financing for the CCS project’s development plans through the Connecting Europe Facility, the EU fund supporting infrastructure investments in transport, energy, digital and telecommunication projects. This status could also lead to favorable borrowing terms for the project.

Greek gas grid operator DESFA is supporting the effort to secure PCI/PMI status for the Prinos CCS project.

DESFA’s role in the project’s development would entail constructing a network for collecting CO2 quantities. Industries operating in the wider Athens area would be connected to this network.

CO2 amounts would be liquefied and temporarily stored at a facility near the port of Elefsina, west of Athens, then loaded onto CO2 tankers and shipped out to the Prinos CCS.

Energean holds a license for the Prinos facility, currently running until August, 2024. As a next step, the company will need to secure a social and environmental impact study. Its approval would enable Energean to take a next step and apply to EDEYEP, the Hellenic Hydrocarbons and Energy Resources Management Company, for a CO2 storage license, which would make the company its operator.

Energean plans to start operating the Prinos CCS in late 2025 or early 2026 at a first-phase level for storage of up to 1 million tons of CO2 per year.

 

Revythoussa LNG terminal slot demand strong for 2025, 2026

Gas grid operator DESFA’s ongoing auctions for slots at its Revythoussa islet LNG terminal just off Athens, currently offering slots for 2025 and 2026, are continuing to attract strong bidding interest, as was the case with a preceding session offering slots for 2024.

This year, DESFA is, for the first time, staging LNG slot reservation auctions offering capacities for the next 15 years, from 2024 to 2038, triple the five-year extent offered up until last year.

The strong interest in the Revythoussa slots has been attributed to a projected increase in gas demand over the next few years. A number of new gas-fueled power stations are planned to be launched between 2024 and 2026.

Participants have fully booked all 41 LNG slots offered for 2025. Of these, 25 had already been secured during last year’s cycle of auctions. The remaining 16 slots were all taken up by domestic users.

The 41 LNG slots offered for 2025 were secured by a total of 7 users of which six are domestic players.

Bidding interest remains just as firm for 2026, with just one of 45 slots offered still vacant. Of these, 21 were secured by bidders at auction last year, drawing bidders from Greece and abroad.

It should be pointed out that, even if slots are all taken, the terminal’s rules permit other users to store quantities for shorter in-between periods if slots are temporarily emptied or any LNG load cancellations arise.

 

DESFA slot auction for 2024 successful, premia levels drop

Gas grid operator DESFA auctions staged last week for LNG cargo slots in 2024 proved successful, as had been anticipated. Just five of a total of 45 slots were available as 40 slots had already been reserved by bidders during a previous round.

This year, DESFA is, for the first time, staging LNG slot reservation auctions offering capacities for the next 15 years, from 2024 to 2038, triple the five-year extent offered up until last year.

Slot commitment by bidders beyond five years constitutes a significant qualitative leap for both the natural gas market and gas infrastructure as, on the one hand, long-term capacity agreements are bolstered, and on the other, infrastructure development visibility is improved through the expression of definite interest, market officials noted.

Latest auction premia have fallen to much lower levels, compared to last year, a development attributed to two key factors, reduced gas demand and the forthcoming launch of the Alexandroupoli LNG facility in Greece’s northeast, DESFA sources noted.

Reduced gas demand and the imminent launch of the new Alexandroupoli LNG facility, along with other gas-sector infrastructure, has led to a better supply-demand balance in terms of capacity commitment at the Revythoussa terminal – Greece’s only LNG unit at present – and  prevented conditions for high premiums, as was the case last year.

Heightened gas demand last year pushed slot prices well above auction starting prices. As a result, premia, or windfall earnings, generated at the Revythoussa slot auctions and the Greek gas grid’s other entry and exit points reached 65 million euros.

DESFA’s windfall earnings, according to domestic gas market regulations, need to be utilized to benefit grid users. The 65 million-euro amount accumulated last year will go towards supporting the country’s latest supply security effort, as part of a 160 million-euro preventive action plan.

This initiative will lessen, by 65 million euros, the supply security effort’s collection target through various surcharges on consumer bills.

DESFA plans to use blockchain technology, pilot project in 2024

Gas grid operator DESFA plans to strive for improved management of its facilities and strengthened liquidity in the secondary gas market by applying blockchain technology to its systems.

DESFA is currently conducting a feasibility study in cooperation with the Aristotle University of Thessaloniki in order to examine the prospect of integrating this technology into its systems.

Blockchain technology, an advanced database mechanism that allows transparent information sharing within a business network, is used by energy companies to create peer-to-peer energy trading platforms and streamline access to renewable energy.

DESFA’s interest in using blockchain technology has a dual objective. On the one hand, the company will seek to optimize the use and management of its facilities and, on the other, to develop tools that will enable grid users to carry out transactions more easily and automatically.

As for the secondary gas market, the system’s ability to simplify transactions is expected to directly impact market liquidity.

DESFA, making use of the ongoing feasibility study’s results, is expected to present an initial plan to RAAEY, the Regulatory Authority for Waste, Energy and Water, by the end of the year.

If the authority approves this plan, DESFA intends to launch a pilot project in 2024.

 

Revythoussa LNG terminal still vital despite lessened activity

Capacity increases at the TAP pipeline, facilitating the delivery of Caspian gas to destinations in Europe, and the IGB gas pipeline linking Greece and Bulgaria, plus the scheduled launch, early in 2024, of the Alexandroupoli FSRU at the country’s northeastern port, will lessen the number of LNG tankers delivering quantities to the Revythoussa LNG terminal, just off Athens, for eventual distribution to the Bulgarian market, but the terminal remains vital for Greece’s energy security and supply.

In addition, an agreement signed last January by Turkey and Bulgaria’s respective state-owned energy companies, Botas and Bulgargaz, for Turkish supply to Bulgaria of 1.5 bcm of natural gas, annually, over a 13-year period, also promises to further decongest activity at the Revythoussa LNG terminal.

The Bulgarian-Turkish agreement had prompted a number of questions in the domestic and European markets regarding its terms and conditions, as well as its impact on Greece’s gas infrastructure.

However, as was recently highlighted by Sotiris Bravos, Senior Commercial Services Manager at DESFA, Greece’s gas grid operator, the Revythoussa LNG terminal’s commercial role will only be limited in trade concerning the Bulgarian market.

In 2022, the Revythoussa LNG terminal covered two-thirds of Bulgaria’s natural gas needs, a performance not expected to be repeated this year given the increased number of facilities – TAP, IGB, and, slightly later on, the Alexandroupoli FSRU – serving the Bulgarian market.

Even so, the Revythoussa LNG terminal remains a crucial part of the country’s gas grid, especially regarding supply security and the grid’s balance, Bravos, the DESFA official, noted.

At present, the Revythoussa LNG terminal is Greece’s only LNG entry point and one of the country’s four natural gas entry points.

DESFA’s administration believes new gas infrastructure will not compete against the Revythoussa LNG terminal as it remains a facility of major importance for the Greek gas grid and the significantly increased needs of central Europe.

Milder, lower-cost gas storage measures planned for winter

This winter season’s Preventive Action Plan for natural gas supply security in Greece is expected to be significantly lower in cost as it will be limited to a basic set of milder precautionary measures, energypress sources have informed.

The Preventive Action Plan will be determined by the outcome of a risk study currently being conducted for the upcoming winter, deputy energy minister Alexandra Sdoukou recently informed.

Though the study’s results are not yet out, it has already become apparent that drastic energy security measures such as those taken for last winter – among them the rental of an additional FSU at the Revythoussa LNG terminal just off Athens – will not be necessary, well-informed sources have contended.

This winter, gas grid operator DESFA, running the Revythoussa LNG terminal, does not intend to hire an additional FSU, which, along with gas-storage facility rentals abroad last winter season by electricity producers operating gas-fueled power stations in Greece, ended up costing 160 million euros.

In the lead-up to last winter, Greece’s gas-fueled electricity producers were required to store natural gas at underground storage units of other EU member states, as domestic gas storage facilities did not suffice to cover precautionary-measure needs.

The country’s electricity producers have, this autumn, remained far more subdued on gas-storage action at facilities in fellow EU member states. Some of Greece’s major electricity producers have reached agreements to use gas storage facilities, primarily in Italy, if needed, sources informed.

Gas amounts involved in these agreements are believed to be well below levels foreseen by EU regulations and RAAEY, the the Regulatory Authority for Waste, Energy and Water.

Last winter, RAAEY, aligning itself with EU Regulations, which require all member states to store gas amounts equivalent to 15 percent of national annual consumption, set a 7.5 TWh storage requirement.

Market officials have expressed concerns as to whether this requirement still needs to be maintained, noting the Revythoussa LNG terminal could cover extraordinary needs through additional LNG shipments.

Romania’s Transgaz taking on 15% stake in Volos’ Argo FSRU

Romanian gas grid operator Transgaz has agreed to take on a 15 percent stake in the Mediterranean Gas consortium, promoting the Argo FSRU project at Volos, on the mainland’s east coast, a move that further boosts the LNG terminal’s development prospects as it promises the terminal a gas supply route to Balkan and central European markets.

Mediterranean Gas has lodged an application to Greek authorities for an equity make-up revision facilitating Transgaz’s entry into the consortium with the 15 percent share.

Mediterranean Gas is also holding discussions with other potential partners to further expand its shareholder base, while developments on the matter are expected soon, sources informed.

A recent first-phase market test conducted by Greek gas grid operator DESFA to gauge a capacity increase for the country’s gas grid highlighted Volos’ prospective FSRU as one of the interconnection points of greatest interest for users.

Romania’s natural gas market is one of considerable size as it can absorb up to 13 bcm. Also, the country’s gas network offers interconnectivity with neighboring countries as well as with central European markets, and, as a result, offers potential for transportation of significant gas quantities to the north.

Transgaz operates a gas network totaling 25,000 km, has acquired the Moldovan network, and manages 7 bcm in gas storage facilities.

The Argo FSRU, which will be designed to supply up to 4.6 bcm of natural gas, annually, is planned to begin operating in early 2024.

Alexandroupoli FSRU on track for early-2024 launch

Development of the Alexandroupoli FSRU at the country’s northeastern port is progressing steadily and set for an on-schedule launch by the end of January, 2024, energypress sources have informed.

Tanker conversion work being conducted for the FSRU at Singapore’s Keppel Shipyard was 87.1 percent ready at the end of August, meaning all basic equipment, including burners and gasifiers, has been installed, the sources added.

Representatives of Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, visited the Keppel Shipyard just days ago.  The consortium’s chief executive, Kostis Sifneos, headed the visiting group.

The consortium’s members – the Copelouzos group’s Elmina Copelouzou, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz and Greek gas grid operator DESFA, all holding 20 percent shares – plan to soon hold a meeting to discuss the project’s steps leading to its launch, the sources added.

The FSRU vessel is expected to be ready to set sail for Alexandroupoli in mid-November, before reaching its destination in early December.

The Alexandroupoli FSRU, to offer a 153,500-m3 LNG capacity, will be connected to Greece’s gas network via a 28-km pipeline, through which gasified LNG will be distributed to the domestic market, Bulgaria, Romania, Serbia, North Macedonia, Hungary, Moldova and Ukraine.

The project will serve as a new energy gateway promising to play a key role in the energy security and independence of Greece as well as central and southeast Europe.

ICGB concludes non-binding phase for expansion of IGB’s technical capacity

The independent transmission system operator ICGB has announced a successful completion of the non-binding phase of the incremental capacity process launched in July to assess the market interest in increasing the IGB pipeline’s total technical capacity.

“The market interest for a few consecutive gas years is nearly two times higher than our initial expectations. While for now these indications are non-binding for the shippers, this is a great first step towards a potential expansion of the IGB pipeline’s capacity from 3 bcm/y to 5 bcm/y”, said ICGB Executive Officers George Satlas and Teodora Georgieva. The two discussed updates on the plans for the interconnector’s development with other TSOs in the region during an event dedicated to the Vertical Gas Corridor held in Thessaloniki, Greece.

“In less than a year of commercial operations, the interconnector Greece-Bulgaria became an essential part of Bulgaria’s path towards energy diversification, enhanced security of supply and energy independence. Over 82% of the total capacity for the upcoming gas year is already booked and we’re looking ahead towards plans for expansion, further strengthening Bulgaria and Greece’s roles on the region’s energy map”, Georgieva noted.

According to her, gas traders have expressed interest for up to 4 bcm/y additional capacity for the next few gas years in the interconnection points of IGB with the Greek national operator DESFA and the Bulgarian national operator Bulgartransgaz.

George Satlas highlighted IGB’s synergy with the LNG terminal in Alexandroupolis and the pipeline’s key role as part of the Southern Gas Corridor and the Vertical Gas Corridor. “With the changed security environment in the region and the change of gas flow from south to north, Bulgaria is becoming a gas transit country. Together with Greece and its growing efforts towards developing LNG projects, our two countries are showing an excellent cooperation model in the energy sector”, he noted.

IGB is the first route for diversified supplies of natural gas to Bulgaria, guaranteeing increased security of supply and diversity of sources. The gas pipeline enables the transportation of natural gas from new sources to other countries in the region as well, including Moldova and Ukraine.

The IGB (Greece-Bulgaria Gas Interconnector) project is being implemented by the joint venture company ICGB AD, registered in Bulgaria in 2011 with shareholders BEH EAD (50%) and IGI Poseidon (50%). The co-shareholder IGI Poseidon is a company registered in Greece, with shareholders the Greek company DEPA International Projects (50%) and the Italian energy group Edison S.p.A (50%).

In accordance with its charter, ICGB AD is the owner of the IGB gas pipeline, financing its implementation, distributing its transmission capacity and receiving revenues from the transmission of natural gas.

The IGB gas pipeline connects with the Greek national gas transmission system (DESFA S.A.) and the Trans-Adriatic gas pipeline (TAP AG) in the area of Komotini (Greece), and with the Bulgarian gas transmission system (Bulgartransgaz EAD) in the area of Stara Zagora. The total length of the gas pipeline is 182 km, the diameter of the pipe – 32” – and a design capacity of up to 3 billion m3/year in the direction Greece – Bulgaria. Depending on the market interest for larger capacity and the possibilities of the neighboring gas transmission systems, the capacity of IGB is designed with the option for increase up to 5 billion m3/year with additional construction of a compressor station.

 

 

DESFA sees Revythoussa LNG regasification in 2024 at 3 bcm

Gas grid operator DESFA estimates that an LNG quantity of just over 3 bcm will undergo regasification at its Revythoussa terminal, just off Athens, in 2024 for subsequent delivery to the country’s grid.

The projection, resulting in 35.7 terawatt-hours (TWh) of natural gas, is slightly lower than the 38.08 TWh of natural gas delivered to the grid in 2022, when the level rose sharply year-on-year, by 54 percent.

 

Just two shipments scheduled for LNG terminal next month

Just two LNG cargoes are scheduled to make their way to gas grid operator DESFA’s Revythoussa terminal, just off Athens, in September, just a fraction of shipments ordered for the islet terminal a year earlier, when the energy crisis had peaked, the operator’s finalized unloading schedule for next month has shown.

The first of the two shipments, a 147,710-m3 order placed by Mytilineos, is scheduled to arrive at the LNG terminal on September 17, while a second LNG order, placed by Elpedison for a 90,000-m3 quantity, is planned to reach the Revythoussa terminal on September 30.

In September, 2022, a total of 10 LNG shipments totaling 514,435 m3 had reached DESFA’s LNG terminal.

DESFA forecasts gas demand increase of 25% by 2029

Gas grid operator DESFA expects a sharp rise in domestic gas demand over the next few years, seen rising 25 percent by 2029, according to company data.

Natural gas usage in Greece is projected to rise to 7.3 bcm by 2029, a 25 percent increase compared to 2022, when consumption reached 5.8 bcm. according to DESFA’s data.

DESFA anticipates domestic gas demand will reach 6.7 bcm by 2027 and approximately 15.5 percent over the next two years.

The anticipated rise in domestic gas demand by DESFA is closely linked to the development of new gas-powered electricity stations being established in Greece.

GEK-Terna and Motor Oil Hellas have teamed up for the development of an 877-MW gas-fueled power station in Komotini, northeastern Greece. This project is now under construction and slated for a commercial launch in early 2024.

In addition, power utility PPC, gas company DEPA Commercial and the Copelouzos group have established a partnership for the development of an 840-MW gas-fueled power station in Alexandroupoli, also in the country’s northeast. It is expected to be completed at the end of 2025.

DESFA forwarded its gas-demand data to ACER, Europe’s Agency for the Cooperation of Energy Regulators, for an analysis concerning network fees proposed by the gas operator in consultation staged by RAAEY, the Regulatory Authority for Waste, Energy and Water.

ACER has described the amount of data provided for DESFA’s network fees proposal as insufficient.

The European agency wants RAAEY to clearly set the duration of the new formula for network fees, based on planned investments intended to stabilize gas network flow.

 

DESFA posts significant revenue, profit gains for 2022

Gas grid operator DESFA has posted impressive financial results for 2022, including a 37.6 percent year-on-year revenue increase to 278.3 million euros from 202.6 million euros, as well as a 29 percent rise in profit, to 81.6 million euros from 63.1 million euros a year earlier.

Analyzing its financial results, DESFA’s administration mainly attributed last year’s significant revenue increase, up by over 75 million euros, to higher regulated earnings, which grew by 69.2 million euros.

In her message to shareholders, DESFA’s chief executive officer Maria Rita Galli, made note of the business model followed by the company. “In conditions of great instability and huge volatility, DESFA’s business model has proved resilient, with the company occupying a strong position at the forefront of initiatives launched at national and European level to enhance security of supply in Greece and southeastern Europe,” DESFA’s CEO noted.

“The speed with which DESFA reacted to the interruption of Russian gas flow to Bulgaria, transforming the Greek gas grid into a transit corridor, led to a gas exports increase of approximately 300 percent compared to the previous year, supported by 78 LNG cargoes unloaded at the Revythoussa terminal, whose storage capacity increased by more than 60 percent in record time with the installation, in June 2022, of a floating storage unit,” she continued.

DESFA also announced it is currently looking to separate regulated and non-regulated activities, through the formation of a new company, following a request by RAAEY, the Regulatory Authority for Waste, Energy and Water.

DESFA gas pipeline for west Macedonia approved by ministry

Gas grid operator DESFA has received a five-year installation approval to construct a gas pipeline network in northern Greece’s west Macedonia region, a project to run a total of 158.34 kilometers, from the Imathia, Pella and Florina regions to the Kozani region, north of Ptolemaida.

Just over one-third, or 35 percent, of the gas pipeline project has already been constructed. Its completion is slated for autumn next year.

The section of the pipeline now under construction will be equipped to accommodate and transport a mixture of natural gas and hydrogen, while a planned second parallel pipeline will be able to transport hydrogen exclusively.

The gas pipeline network’s main branch, a 93.64-kilometer section with a 30-inch diameter, will run from Trikala (Imathia) to Komnina.

It will branch off towards Aspro (3.37 km), Naousa-Veria (21.27 km), Perdika (9.12 km), and Kardia (30.95 km).

DESFA calls for comprehensive hydrogen market plan

Gas grid operator DESFA has underlined the need for a clearer strategy concerning the development of a comprehensive hydrogen and renewable gas market with specific policy initiatives, in comments forwarded to the energy ministry as part of a wider effort for revisions to the National Energy and Climate Plan, energypress sources have informed.

DESFA officials, responding to questions on the matter, highlighted the crucial role to be played by hydrogen in the energy transition.

The operator’s line of thinking is not merely limited to the utilization of excess energy resulting from renewables, but stretches out further and includes a whole value chain that would enable the utilization of hydrogen in all its possible applications.

Such a prospect, it was pointed out to energypress, requires a more holistic approach at a political level that would include political actions and measures enabling the development of the hydrogen sector, as opposed to the current approach, focusing on excess electrical energy.

It is worth noting that prospective hydrogen production – given announcements made and the anticipated expansion of the country’s electricity system – will far exceed the needs of the country itself, making necessary infrastructure enabling exports to other markets.

DESFA’s approach, therefore, not only concerns the use of hydrogen in certain sectors as a replacement for natural gas in the context of the decarbonization process.

The gas grid operator is awaiting further clarification from the ministry so that it can draw up its infrastructure development plan taking into account renewable gas and hydrogen as a factor.

 

RAAEY reaches decisions on WACC levels for IPTO, HEDNO

Following months of deliberation, RAAEY, the Regulatory Authority for Waste, Energy and Water, has reached decisions on WACC levels for power grid operator IPTO and distribution network operator DEDDIE/HEDNO, setting the former’s at 7.51 percent, for 2023 to 2025, and the latter’s at 7.66 percent for 2023 and 2024, energypress sources have confirmed.

Based on these decisions, IPTO’s average WACC level for the four-year regulatory period, covering 2024 to 2027, works out to 7.16 percent, while the four-year regulatory period average for DEDDIE/HEDNO is 7.11 percent.

The discrepancy in WACC levels resulted from different borrowing-cost coefficients applied to a WACC formula used by RAEEY. All other factors that were taken into account, including country risk and cost of capital, were identical.

IPTO initially sought a higher WACC rate, pushing for its cause from as far back as last year, citing unfavorable changes in the economic environment, including inflation and interest rate increases.

Just recently, RAAEY set a WACC rate of 7.85 percent for gas grid operator DESFA, covering the entire four-year regulatory period (2024-2027), and an 8.57 percent WACC rate for DEPA Infrastructure, limited to 2023.

DESFA tender for gas pipeline to North Macedonia imminent

Greek gas grid operator DESFA is set to announce a tender offering an EPC contract for a natural gas pipeline linking Greece and North Macedonia within the next few days, no later than the end of this month, energypress sources have informed.

DESFA aims to complete the tender by the end of September so that it may reach a final investment decision before the year is out, the sources noted.

In addition, the operator plans for work on the project to begin mid-way through next year and be completed in the second half of 2025, the sources added.

Corinth Pipeworks has been appointed provisional contractor for the project’s pipes. A tender for their procurement was held in May.

The gas pipeline will cover a total distance of 125 kilometers. Its Greek segment will stretch 57 kilometers, beginning from Nea Mesimvria in the country’s north, while the North Macedonian segment’s 68 kilometers will reach Negotino.

DESFA has also taken on the project management role for the pipeline’s North Macedonian segment, after emerging victorious from a tender staged by the neighboring country’s state-run NOMA Gas company.