FSRU

Greek gas hub potential now realistic, DESFA actions show

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Greece, for the first time, has shown true potential to soon establish itself as a regional gas hub and gateway for southeast Europe, judging by the results of gas grid operator DESFA’s recent auctions offering grid capacity reservations, as well as the operator’s non-binding market test for a prospective expansion of the country’s gas transmission network.

DESFA has prepared an extensive ten-year development plan that is fully aligned with the new market conditions taking shape, as well as with the company’s efforts to achieve energy-transition objectives, the operator’s administration has underlined at a news conference.

Greek gas exports increased by 15.09 percent in the first half of 2023, compared to the equivalent period last year, according to DESFA data presented at the news conference.

Also, DESFA’s non-binding market test for a prospective expansion of the country’s gas transmission network drew the participation of 27 companies, 17 of these from abroad, primarily central and southeast Europe, such as Bulgaria, Romania, Austria, Hungary, Slovakia, Germany, Cyprus, North Macedonia, as well as the USA.

Forty percent of the market test’s participants have never before been active in Greece’s natural gas market, DESFA announced.

Participants expressed interest for all the country’s gas grid entry points (Sidirokastro, Nea Mesimvria, Kipoi and Agia Triada), as well as for connections to Greece’s prospective FSRUs (Gastrade, Argo, Dioryga Gas, Elpedison).

Highlighting the Greek natural gas market’s export orientation, exports to Bulgaria totaled approximately 2.4 bcm in 2022, roughly half of Greece’s annual gas consumption last year, 4.9 bcm.

Alexandroupoli FSRU pipeline work in progress, tanker to arrive November

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Development work for the Alexandroupoli FSRU at the country’s northeastern port is in full progress on all fronts, in preparation for the project’s launch early next year.

Besides the project’s floating LNG storage and regasification infrastructure, work is also in progress on the offshore and onshore pipelines to transmit gas to the national grid and, from there, the Greek-Bulgarian IGB pipeline connection for gas quantities to the Balkans.

Officials at Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, offered an on-site presentation of the FSRU’s work in progress to visiting ambassadors. This mission was organized by George Tsounis, the US ambassador to Greece, and included the ambassadors of Bulgaria, Romania, Moldova and Ukraine.

The FSRU’s subsea pipelines, to measure 24 km, and overland pipelines, measuring a further 4 km, have been delivered to the Alexandroupoli port for installation.

The Alexandroupoli FSRU promises to serve as an additional source of gas supply for Greece and other Balkan countries. Quantities will be transmitted through the IGB for delivery to Bulgaria and, by extension, Romania.

The project’s specially equipped floating tanker is expected to arrive at its Alexandroupoli location in late November, while the FSRU facility should start operating early in 2024.

Gastrade has already been granted a further license for an additional FSRU, intended to serve Moldova and Ukraine, if the results of a related market test indicate that such an additional project would be viable.

It remains unknown when Gastrade could make an investment decision on this additional FSRU.

 

Motor Oil reexamining Dioryga Gas FSRU project in Corinth

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Energy group Motor Oil is reexamining its plan for the Dioryga Gas FSRU project in Corinth, west of Athens, over concerns created by a change in market conditions, the group’s management revealed yesterday during its presentation of 2022 financial results to analysts.

Petros Tzannetakis, Motor Oil’s deputy managing director, told analysts the group is taking a closer look at details concerning the project.

“We are not saying that we will not go ahead, but that we are still looking at a lot of details,” Tzannetakis noted.

Results of a market test were favorable but market conditions have changed as it has become costlier and more difficult to find LNG carriers, the Motor Oil deputy explained, noting “we still need time before making an investment decision.”

If the project is deemed feasible, the investment will go ahead, Tzannetakis informed.

In its final market test, the Dioryga Gas FSRU project attracted record slot reservation figures for durations of up to 25 years and quantities totaling up to 2 bcm per year.

Located just 22 km from Greece’s existing Revythoussa islet LNG terminal, the Dioryga Gas FSRU would supply electricity producers in Greece as well as markets in southeast Europe.

Last October, RAE, the Regulatory Authority for Energy, approved a capacity increase for the Dioryga Gas FSRU to between 135,00 and 210,000 cubic meters. Motor Oil aims to launch the FSRU in the first quarter of 2024, if the company decides to go ahead with the project’s development.

 

Dioryga Gas FSRU investment decision by Motor Oil in 3Q, clarity needed

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Energy group Motor Oil is expected to wait until the end of summer or early autumn before making an investment decision on the development of its Dioryga Gas FSRU project in Corinth, west of Athens, budgeted at approximately 340 million euros, sources have informed energypress.

Though a market test, staged recently by the petroleum group, proved successful, unclear factors still need to be considered before Motor Oil makes decisions, the sources noted.

Motor Oil requires further clarity on gas grid operator DESFA’s plans for an upgrade of a high-pressure gas pipeline segment from Patima to Livadia, mainland Greece.

During recent consultation on DESFA’s ten-year development plan covering 2023 to 2032, Motor Oil disagreed with this upgrade’s timing, scheduled by DESFA for October, 2027, pointing out the Dioryga Gas FSRU, if developed, is planned to be launched prior to this date, in May, 2025.

Doubled pipeline capacity at the Patima-Livadia segment, unjustifiably delayed, according to Motor Oil, will be needed by the company’s Dioryga Gas FSRU in Corinth.

Furthermore, Motor Oil has reacted against DESFA’s doubled cost, to 19.5 million euros, for the development of a related metering station required for the FSRU’s connection to the gas pipeline network. Motor Oil submitted a request, to the consultation procedure, for this part of the project to be taken on by Ellaktor – a construction company in which Motor Oil holds a stake – under the supervision of DESFA.

Last January, state authorities classified the Dioryga Gas FSRU project as an investment of strategic importance, status offering fast-track licensing.

RAE approvals steps towards new FSRUs off Corinth, Thessaloniki

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RAE, the Regulatory Authority for Energy, has approved Elpedison’s Thessaloniki FSRU project as well as the final phase of a market test for Motor Oil’s FSRU plan, Dioryga Gas, off Corinth, west of Athens.

For Elpedison, the authority’s approval essentially signals the go-ahead for the Thessaloniki FSRU (floating storage unit) as the decision awards a 50-year project license until 2072.

A 50-50 joint venture involving Elpedison’s two partners, Edison and HELLENiQ, formerly known as Hellenic Petroleum (ELPE), the Thessaloniki FSRU will be developed at the Thermaic Gulf, just a few kilometers from Dock 6 at Thessaloniki port.

The Thessaloniki FSRU, planned to consist of four storage tanks offering a total of 170,000 cubic meters, is scheduled to be launched in 2025.

Besides approving guidelines for the final phase of Motor Oil’s market test concerning the Dioryga Gas FSRU project off Corinth, RAE also approved a capacity boost for this project, to 210,000 cubic meters from 170,000 cubic meters, as had been specified in the project’s original license, as well as Diorygas Gas’ transfer to Motor Oil’s MORE subsidiary, also hosting the petroleum group’s RES projects.

 

IGB moves close to launch, ICGB consortium certified

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The Greek-Bulgarian IGB gas pipeline has moved a step closer towards its launch, expected around the end of this month, following the completion of a certification procedure for the ICGB consortium behind the project.

The European Commission, according to information made available, has approved a certification application submitted by the Greek Regulatory Authority for Energy, RAE, and its Bulgarian counterpart, EWRC.

Greek Prime Minister Kyriakos Mitsotakis and Bulgarian leader Kiril Petkov will both attend the project’s inauguration ceremony in Komotini, northeastern Greece, this Friday, ahead of the project’s commercial launch towards the end of the month.

The two leaders are expected to highlight this project’s contribution to the EU’s ongoing effort to end the continent’s reliance on Russia’s Gazprom.

The IGB gas pipeline will offer an alternative natural gas route into Bulgaria, initially via the TAP route and, from autumn onwards, through Greece’s gas grid. From 2023, the IGB will serve as a gateway for LNG imports from coastal FSRUs in the region. LNG quantities will reach Bulgaria, Romania, even Ukraine, through pipeline interconnections.

Europe on edge, tested by Putin’s ruble payment demand

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Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.

 

 

 

Motor Oil aims to start ‘Dioryga Gas’ development at end of ‘22

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Petroleum group Motor Oil aims to begin development of its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by the end of the year. The project’s completion would offer a second southern LNG entry point for Greece.

The ongoing energy crisis throughout Europe highlights the importance of such infrastructure, promising supply diversification and energy security.

Motor Oil officials are now working on the next steps leading to the project’s development following a recent successfully completed non-binding market test, which attracted capacity slot offers well over the group’s target of two billion cubic meters.

A binding second-round market test is currently being prepared by Motor Oil officials, according to sources. The procedure is expected to commence towards the end of the second quarter, once it has been approved by RAE, the Regulatory Authority for Energy.

According to the company plan, an investment decision will follow, either late in the third quarter or early in the fourth quarter, paving the way for the beginning of construction towards the end of the year and an estimated launch in the final quarter of 2023.

The “Dioryga Gas” FSRU project has been included in gas grid operator DESFA’s ten-year development plan covering 2021 to 2030.

Its total capacity is planned to reach 210,000 m3, while regasification is planned at 132,000 MWhs per day and 2.5 bcm annually.

Motor Oil aims for ‘Dioryga Gas’ FSRU market test by November

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Petroleum group Motor Oil aims to launch a market test for its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by November, as just one pending issue, approval of project guidelines by RAE, the Regulatory Authority for Energy, now remains before the test can be staged.

The market test will be staged to measure the level of utilization interest in this floating unit by potential users.

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.

The market test will be conducted over two stages, an initial round of non-binding offers reserving FSRU capacities, followed by a second round of binding offers.

Besides the project’s commercial matters, progress is also being made on the technical front. The project’s Front End Engineering Design (FEED) plans are expected to be completed early next year, while the infrastructure’s environmental licensing procedure is in progress.

The FSRU is planned to feature four LNG storage tanks with a total capacity of between 130,000 and 180,000 cubic meters, as well as a regasification unit with a capacity of 300-500 cubic meters per hour for an annual regasification capacity of 2-3 bcm.

The unit is also planned to be hydrogen-compatible.

Motor Oil ‘Dioryga Gas’ FSRU on DESFA 10-yr plan, set to roll

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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.

RAE renews call for ministry’s help on Crete sufficiency plan

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RAE, the Regulatory Authority for Energy, has reiterated a request for energy ministry support needed for the execution of a plan that is expected to resolve energy sufficiency concerns on Crete until the island’s major-scale interconnection with Athens is completed.

The authority, which has resent a package of Crete-sufficiency proposals to the energy ministry, is essentially seeking permission from the ministry to recruit consultants so that it can proceed with necessary tenders.

The RAE plan, comprised of four basic actions, is based on a related study conducted by the National Technical University of Athens. Besides ensuring energy sufficiency for the island, the proposals also meet environmental standards.

The conversion of a diesel-fueled power station into a 100-MW natural gas-fueled facility is one of the four RAE proposals.

Another entails the installation of a new 100-MW power station, preferably natural gas-fueled.

A third action involves a RES capacity addition of roughly 200 MW, evenly split between wind and solar facilities.

RAE’s fourth proposal concerns the installation – and introduction to the Greek grid – of energy storage systems, or high-tech batteries, representing a capacity of between 30 and 40 MW.

The first and second proposals depend on LNG supply to Crete. Subsequently, a tender will need to be staged for the installation of an FSRU as well as a 100-MW power station.

The additional RES capacity will also require tenders. In addition, RAE proposes a tender for the energy storage systems it envisions for the island.

These batteries could also be used on other Greek islands in the future if they are eventually no longer needed on Crete.

 

DESFA’s Cretan FSRU proposal troubles RAE, considering tender

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The board at RAE, the Regulatory Authority for Energy, needs to determine whether a proposal by gas grid operator DESFA for a floating storage and regasification unit at Atherinolakkos, Crete, is fit to be added to its national gas grid development plan for 2020 to 2029.

The investment plan, budgeted at 175 million euros, has been widely criticized by companies and market authorities through a public consultation procedure as DESFA wants national grid users to cover its cost. This demand has also troubled RAE, heading towards staging a tender.

According to sources, the authority will most likely ask DESFA to not include the FSRU project in its development plan this year and call for specific prerequisites that would give the investment social dimension.

RAE officials have reiterated the need for the development of the authority’s proposals to help cover Crete’s energy needs until a major interconnection project, to link the island with Athens, is completed. This intermediate period may exceed three years, it is believed. An FSRU will need to contribute to the overall effort.

RAE has asked the energy ministry to make legislative revisions needed ahead of tenders concerning the development of projects for energy sufficiency on Crete.

One of these entails a conversion of power utility PPC facilities totaling 100 MW from diesel-fueled to gas-fueled units. Another project concerns the construction of a new 100-MW gas-fueled power station, plus an FSRU. RAE also wants new wind and solar energy units installed for a total capacity of 100 to 150 MW, as well as energy storage batteries with a capacity of between 40 to 50 MW.

DESFA, responding to the criticism, explained that it does not intend to construct a gas-fueled power station, noting such a task is beyond its realm.

Also, its FSRU proposal for Crete purely represents a solution to secure energy sufficiency on the island, DESFA officials told energypress. The project already carries social dimension as it aims to supply gas to a non-interconnected area, they added.

East Med, IGB, Alexandroupoli FSRU upgrading Greek role

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Three major energy projects of international dimension, the East Med and IGB natural gas pipelines, as well as the Alexandroupoli FSRU (Floating Storage Regasification Unit), all once seeming distant prospects, are now gradually turning into a close reality.

Their development promise to transform Greece into an energy hub and upgrade the country’s geopolitical standing in the fragile southeast Mediterranean and Balkan regions.

The leaders of Greece, Cyprus and Israel are set to sign a trilateral agreement for East Med, to carry natural gas to Europe via these countries and Italy, at a meeting in Athens on January 2. The transmission capacity of this project, measuring 2,000 km, will range between 10 to 20 billion cubic meters. Italy is also expected to eventually join the partnership for this project.

Its development prospects have been further propelled by a decision from Poseidon, a 50-50 joint venture involving Greek gas utility DEPA and Italy’s Edison, to accelerate the completion of all pending issues needed for the project’s maturity.

The trilateral agreement promises to further bolster ties between Greece, Cyprus and Israel amid a period of heightened regional intensity. Turkish provocation has escalated. An East Med Gas Forum to take place in Cairo January 15 and 16 with participation from the energy ministers of Greece, Cyprus, Israel, Egypt, Jordan and the Palestinian Authority should help expand the alliance.

The Greek-Bulgarian IGB gas pipeline is expected to have begun operating far sooner, in July, 2021. DEPA holds a 25 percent stake in ICGB, the consortium overseeing the IGB project, whose initial capacity will be 3 bcm. Through this pipeline, DEPA plans to supply the Bulgarian market with Azeri gas hailing from the TAP route, and, as a result, break, for the first time, the existing Russian monopoly in the neighboring market.

The IGB will not only be fed by TAP, running westwards across northern Greece for Azeri supply to Europe. The Alexandroupoli FSRU to be anchored off coastal Alexandroupoli, northeastern Greece, will also feed the IGB, enabling an alternative gas supply source for Bulgaria, other east European countries, and Ukraine.

DEPA is also involved in this project. The gas utility has just decided to acquire a 20 percent stake in Gastrade, the company developing the FSRU project in Alexandroupoli.

Leading Washington officials have expressed their support for the East Med, IGB and Alexandroupoli FSRU projects. Prime Minister Kyriakos Mitsotakis will be seeking confirmation of this backing on an upcoming official trip to the US from President Donald Trump himself.

 

ENI’s FSRU proposal latest Crete energy sufficiency idea

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Italian energy giant ENI has come up with the latest proposal for a role in resolving Crete’s energy shortage threat, ascertaining it is ready to provide an FSRU unit for LNG storage and gasification that could be moored off the island.

High-polluting diesel generators operating on Crete, Greece’s biggest island, must cease operating by the end of this year, according to European Commission requirements.

The ENI proposal could cover the energy supply needs of power utility PPC diesel-fueled generators planned for conversion to natural gas, as well as a 100-MW gas-fired facility.

Prior to this interest from ENI, energy firms forwarded a series of proposals, all different, to counter the Cretan matter.

GEK Terna was the first to emerge with a recommendation entailing the transfer to Crete of Heron I, a power plant in the Viotia prefecture, northwest of Athens, offering a 150-MW capacity. Qatar’s Powerglobe followed with its Power4Crete proposal, an FSRU for electricity generation. Greek power utility PPC proposed an upgrade of its facilities on the island.

Also, Greek gas grid operator DESFA has included the establishment of a gas terminal at Atherinolakkos, southeastern Crete, into its development program.