FSU at Revythoussa LNG unit, Italy storage solution advances

An FSU has been licensed and installed at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, boosting the facility’s overall capacity to 370,000 cubic meters.

The new floating storage unit’s installation at the Revythoussa terminal comes as part of the country’s energy security effort for protection should Russia disrupt its gas supply. In addition, it will also be used to serve the needs of neighboring countries.

Other steps are also being taken as part of the national energy security plan.

Greek and Italian officials have reached an advanced stage in talks for maintenance of Greek gas reserves at 1.14 TWh at an underground storage facility in the neighboring country. According to sources, the two sides are set to sign a related Memorandum of Cooperation.

The European Commission requires all EU member states without – or without sufficient – natural gas storage facilities, such as Greece, to store by November 1, gas quantities representing 15 percent of annual consumption at existing storage facilities maintained by fellow member states.

Electricity producers operating generators with dual combustion units (natural gas and diesel) are soon expected to take part in an energy ministry meeting to examine fuel-storage issues. This session could take place tomorrow.

 

 

DEDA awaiting biothemane operator license 7 months on

Gas distributor DEDA is still awaiting a license that would establish the company as a biomethane operator seven months it submitted a related application to RAE, the Regulatory Authority for Energy.

DEDA lodged its license application to RAE on December 6, 2021 as part of its effort to move ahead with the country’s first biomethane distribution pilot projects.

Over the past two years, DEDA has been working on procedures for the establishment of legal and regulatory frameworks needed for commercial utilization of biomethane through the distribution networks it operates.

DEDA has already signed memorandums of cooperation with two biogas producers entailing upgrades of their facilities for production of biomethane, to be injected into networks and distributed as a mix with natural gas.

The first biomethane distribution pilot project is planned for the Nigrita area in Serres, northern Greece, to primarily supply household and business consumers. A second project, in Alexandria, Imathia, also in the country’s north, is planned to supply mostly industrial consumers.

Furthermore, on July 4, DEDA submitted a complete proposal to the energy ministry for the development of a biomethane market in Greece, based on revisions to laws concerning biogas, renewables and natural gas distribution. This proposal puts the price of biomethane below that of natural gas.

Lignite-fired output to double, PPC sets conditions for return

State-controlled power utility PPC will double its lignite-fired electricity generation over the next 12 months for annual production of 10 TWh, from 5 TWh at present, an increase covering 20 percent of Greece’s annual electricity needs, energy authorities have agreed at an emergency meeting chaired by Prime Minister Kyriakos Mitsotakis.

The overall effort, reversing the country’s decarbonization plan in order to make up for dwindling Russian natural gas exports and help counter skyrocketing gas costs, will include the development of new lignite mines.

The government’s recently introduced price caps for power generation, set at different levels for respective production technologies, will be applied to this emergency lignite plan.

A price cap of 208 euros per MWh has been imposed on lignite-fired electricity production, meaning the additional 5-TWh amount to be generated by PPC will be worth roughly one billion euros. This additional 5-TWh in production would have been worth 1.8 billion euros if current energy exchange price levels were applied. The wholesale cost of lignite-generated electricity at present is 341.17 euros per MWh.

PPC, controlling all the country’s lignite facilities, has set a series of conditions for the return of lignite-fired power stations, including the abolishment of a rule requiring the company to commit 50 percent of the previous year’s lignite-based output to the futures market.

The power utility has also demanded a 150 million-euro guarantee from the government  should Russia’s war on Ukraine end and energy prices deescalate, which would end the need for the emergency lignite-fired production boost. In setting this condition, PPC has taken into account investments it will need to make to double its lignite-fired generation over the next year.

The government appears to be willing to satisfy the conditions set by PPC, which has disinvested in lignite over the past couple of years.

 

Lignite units back in full force, 34% of energy mix in June

The country’s return to full-scale, lignite-fired electricity generation, an initiative taken to limit the use of natural gas, whose cost has surged amid the energy crisis, increased lignite’s share of the Greek energy mix to 34 percent in June, up from 19.9 percent in May.

Prior to the energy crisis, Greece’s existing lignite-fired power stations, environmentally unfriendly, were headed for withdrawal by 2023 as part of the country’s decarbonization effort.

The duration of their return will now depend on the length of the energy crisis. Ptolemaida V, a new lignite-fired power station planned to be converted to natural gas in the near future, will soon bolster the country’s lignite initiative. This facility’s launch is planned for October or November.

Many questions remain unanswered. The amount of lignite deposits available for extraction at mines is unclear. Also, Greece’s lignite mines and lignite-fired power stations could be short of personnel following the execution of voluntary retirement programs in recent years, as part of the decarbonization drive. In addition, the ability of these lignite units to operate continuously and fully cover a total disruption of Russian gas supply, including during winter, is questionable.

Continual use of the lignite-fired power stations could lead to technical problems. This, at present, is the biggest fear concerning their return.

Government officials contend current lignite deposits can cover the country’s needs until 2030, while new lignite mines could be created, if needed. Staff levels are also sufficient, the officials added.

 

Brussels report highlights EU’s alarming energy cost increase

The cost of wholesale electricity in the EU rose by over 400 percent in the first quarter of 2022, compared to the equivalent period a year earlier, while gas imports during this period cost the EU a total of 78 billion euros, of which 27 billion euros concerned Russian natural gas quantities, a report published by the European Commission’s Directorate-General for Energy has shown.

Households and businesses across the continent have faced unprecedented natural gas cost increases following Russia’s invasion of Ukraine in February. Consequently, the TTF index skyrocketed to peak at 212 euros per MWh on March 7.

The EU adopted a series of sanctions primarily concerning the energy sector as a result of the Russian attack, the report noted. Also, in May, the EU approved its REPower EU plan, designed to gradually end Europe’s reliance on Russian fossil fuels, bolster the continent’s energy security, and support the green-energy transition.

Imports of Russian gas fell by 71 percent via Belarus and 41 percent via Ukraine in the first quarter of 2022, compared to the equivalent period a year earlier. Gas inflow from the Nord Stream pipeline linking Russia with Germany fell by 60 percent in early June.

Europe’s wholesale electricity price averaged 201 euros per MWh in the first quarter of 2022, 281 percent higher than the equivalent period in 2021, the report noted.

Spain and Portugal registered the highest wholesale electricity price increases during this period, a 411 percent rise, followed by Greece (343%) and France (336%), the report noted.

LNG overtakes natural gas as leading energy source import

LNG overtook natural gas as the country’s primary energy source import in the first half of 2022, capturing a 45 percent share of Greece’s energy-source imports, a result of reduced Russian natural gas imports, data provided by gas grid operator DESFA has shown.

During the equivalent period last year, LNG imports represented less than 25 percent of Greece’s total energy-source imports.

DESFA’s LNG terminal on the islet Revythoussa, just off Athens, is currently the country’s main gateway for gas imports. The facility is operating at 90 percent of full capacity.

Gas exports to Bulgaria increased considerably in the first half of 2022, reaching 3 bcm to cover the neighboring country’s entire demand, according to authorities. Russia has completely cut off its gas supply to Bulgaria.

Russian natural gas supply to Greece fell to 35 percent of overall energy-source imports in the first half, down from 42 percent last year, a trend highlighting LNG’s growing role as a result of Russia’s dwindling natural gas supplies.

Demand for natural gas in Greece increased in the first half, the data showed.

Italian gas storage up to 2 TWh from October for 5 months

Greek authorities are taking steps to prepare for a gas-storage solution ahead of next winter in neighboring Italy, in accordance with EU rules, requiring all member states without – or without sufficient – natural gas storage facilities, such as Greece, to store, by November 1, gas quantities representing 15 percent of annual consumption, based on last year’s level, at existing storage facilities maintained by fellow member states.

Based on this requirement and the country’s consumption level last year, Greece will need to store a total of approximately 900 million cubic meters of gas, or 8 TWh, of which up to 2 TWh will be stored at Italian facilities from October for a five-month period.

Storage costs for such a quantity are expected to reach 250 million euros, under favorable conditions.

A related proposal forwarded by RAE, the Regulatory Authority for Energy, will undergo consultation before final decisions on the country’s gas storage plan are made.

 

Nord Stream I maintenance closure sparks unrest in Europe

Europe today enters a ten-day period of heightened energy-crisis suspense as Moscow’s real intentions over the Nord Steam I gas pipeline, just closed for annual maintenance, will not be known until July 21, when the subsea pipeline, running from Russia to Germany, is scheduled to reopen.

European leaders are worried the pipeline’s ten-day closure could develop into an indefinite closure, the worst-case scenario. Natural gas prices, as a result, are continuing to escalate.

In France, the country’s power utility EDF will be nationalized to help the company ride out the European energy crisis and invest in atomic plants. In Germany, the emergency effort includes electricity consumption restrictions as well as rescue plans for beleaguered companies, among them the Uniper energy group.

All is possible should the Nord Steam I pipeline not reopen on July 21, from a deep recession in Germany, an intensified energy crisis throughout Europe, company bankruptcies, electricity and natural gas rationing, and further cost-of-living increases.

Two in ten enterprises around Europe are currently battling to stay afloat, according to the European Investment Bank.

DEPA Chief: ‘Holistic approach to energy matters needed more than ever’

Mr. K. Xifaras, CEO of Public Gas Corporation of Greece (DEPA) SA., writes for International Energy Exhibition of Greece 2022

DEPA Commercial is Custodian of Greece’s energy security and of the smooth operation of the domestic energy market. Today, the energy sector, both in Greece and worldwide, is faced with a series of challenges and unforeseen factors which highlight, now more than ever, the need for a holistic approach to energy matters. The need to contain energy costs and support the society, on one hand, and the process of energy transition, on the other, have created a situation in which the market needs to find a balance which will ensure both the country’s energy efficiency and its survival in sustainable terms.

While trying to solve this difficult equation, the role of natural gas, as a bridge, fuel proves to be decisive for shaping the future of the energy market, given the diversification of energy sources and routes of supply and transport, as well as the expansion of storage capacity. DEPA Commercial, which consistently serves these strategic priorities, has been developing a multi-level strategy for the last three years that has proven to be particularly effective. A strategy with double focus: the verticalization and expansion of corporate activities, and the seamless transition to “green” energy, both of which are national goals described in the National Energy and Climate Plan and the European Green Agreement, enhancing our country’s role as a regional energy hub for the wider Southeast European region.

In order to cover the country’s immediate energy needs and to shield its energy security, DEPA Commercial is increasing the supply of LNG either through current contracts or through the spot market, while having already secured long-term agreements on more favorable terms. At the same time, the company is investing in important infrastructure projects and programs, which are drastically reshaping the energy status quo of the region and are contributing decisively to the process of Europe’s independence from Russian gas, such as the Greek-Bulgarian pipeline – IGB and the offshore LNG terminal (FSRU) in Alexandroupolis. Both, projects which will significantly increase the capacity of supply and storage of both Greece and the neighboring countries it serves.

TAP, Poseidon and EastMed are equally important pipeline projects, with the latter returning dynamically to the forefront as a result of the energy crisis, since it will enable the transport of natural gas from the fields of the Eastern Mediterranean to Europe. To that direction, DEPA Commercial is currently in advanced discussions with trading companies from Israel and Egypt.

In this way, a safety net is established regarding the security of supply in the wider region, which upgrades Greece’s geopolitical status by transforming it into a regulatory factor in the energy landscape.

Simultaneously, given the enhanced importance of natural gas, we have designed a comprehensive strategy aiming, on the one hand to expand the use of natural gas, both geographically and in terms of uses, and on the other hand to create the conditions for the development and utilization of renewable and alternative forms of energy. Keeping this in mind, DEPA Commercial is leading the developments towards the transition to a greener economy by designing and implementing initiatives that promote the further penetration of natural gas in the country’s energy mix, as a transitional fuel on the way to cleaner energy forms. The company also contributes substantially to the promotion of gas mobility and the use of cutting-edge technologies, such as Small-Scale LNG and CNG, thus expanding even further the natural gas network and ensuring distribution even in the most inaccessible areas. At the same, time, emphasis is placed on the development of a sustainable and efficient LNG supply chain for maritime transport that will increase the growth prospects of the Greek shipping sector.

With its sights on the future, DEPA Commercial is already active in the field of Renewable Energy Sources by creating a “green” portfolio that exceeds 200 MW of photovoltaic parks, and is also developing projects, infrastructure and technologies which will be able to serve in the future even “greener” energy such as hydrogen and biomethane.

Moreover, at DEPA Commercial we have proven that we operate always considering pertinent societal issues and, for this reason, with a true sense of responsibility we are contributing decisively to the absorption of a significant percentage of the rise in international gas prices, through the implementation of targeted market interventions aimed at supporting households and businesses, in full cooperation with the Ministry of Environment and Energy.

With a solid vision and through hard work, DEPA Commercial is today an integrated energy company, with strong bases, operating vertically and according to modern corporate governance terms. We are meticulously planning our next steps and we are creating the conditions to successfully meet the ever-changing needs of the market and the economy.

 

IGB moves close to launch, ICGB consortium certified

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.

Energean license for South Kavala gas deposit set for further extension

The government has submitted a draft bill to parliament for a further extension to an agreement, from 1999, between the Greek State and Energean Oil & Gas for exploitation of the “South Kavala” natural gas field in the Aegean Sea’s north.

According to the draft bill, the license, expiring on November 23, 2022, can be further extended either through a ministerial decision following an agreement with the license holder, or, once again, through a ministerial decision, up to and including the starting date of a license granting investors the right to use, develop and exploit the “South Kavala” natural gas field, almost depleted, as a prospective underground natural gas storage facility (UGS).

A tender staged by Greece’s privatization fund TAIPED for this latter license has reached the final round. Energean and a partnership bringing together gas grid operator DESFA and construction company GEK Terna are the final-round qualifiers.

 

 

Gov’t faces fiscal battle for manageable energy bill costs

The government faces a tough fiscal battle to keep energy bill costs within the reach of consumers, a continuously growing challenge given the persistent rise in the price of natural gas, a key source for electricity generation, as a result of escalated tensions between the West and Russia over the latter’s war in Ukraine.

The continual rise in energy prices threatens to derail the government’s support plan for energy consumers and producers.

Last Friday, the price of wholesale natural gas ended trading just under 150 euros per MWh. Its cost rose by 70 percent between June 1 and July 1, from 87 euros per MWh to 147.5 euros per MWh.

The government is searching for fiscal leeway to limit energy prices, compensate producers and subsidize consumer energy bills.

As part of the effort, energy minister Kostas Skrekas has pledged to raise close to 6 billion euros over the next 12 months by taxing windfall profits of producers. This sum is expected to be boosted further by contributions from the Emissions Trading System (ETS), budget and European funding programs.

It remains unclear if the overall amount to be raised will be enough. The cost of electricity and gas bill subsidies in 2022 could exceed 6 billion euros. The cost in the first half of the year reached 2.4 billion euros, while 3.6 billion euros have been budgeted for the second half of the year.

 

Strategic reserve mechanism application to be withdrawn

The energy ministry intends to withdraw its application submitted to the European Commission for a strategic reserve mechanism as a result of the government’s recent decision to revise its withdrawal plan for the country’s lignite-fired power stations in order to permit operations until 2028 instead of 2025, as was planned.

Under the original plan, the strategic reserve mechanism would have been introduced to maintain lignite-fired power stations under the control of power grid operator IPTO for energy contributions during periods of high demand.

Within the framework of these developments, the government is also considering to withdraw a compensation application for power utility PPC’s premature withdrawal of lignite-fired power stations.

PPC’s plan entailed shutting down all existing lignite-fired power stations by the end of 2023.

However, the government is being forced to delay its decarbonization strategy as a result of the steep rise in gas prices prompted by Russia’s war on Ukraine.

Natural Gas Infrastructure at the core of the Energy Transition

The General Manager of EDA THESS, Mr. Leonidas Bakouras, answers  whether the energy crisis marks the end of Natural Gas.

 Interview of the General Manager, Mr. Leonidas Bakouras, to energypress.gr 

Recent geopolitical developments do not affect the role of natural gas, since in all the realistic scenarios that have been put on the table, gas will continue to be the fuel delivering reliability to the energy system of Greece and Europe for the coming years. This is what the General Manager of EDA THESS, Mr. Leonidas Bakouras pointed out in his interview, adding that the role of natural gas will therefore be sustained and will not be relegated by the RePowerEU plan for reducing energy dependence on Russia.

According to Mr. Bakouras, an important reason is that – taking into account the increasing penetration of RES in the power generation mix  – natural gas is the most efficient solution for power adequacy,  while at the same time it is a reliable source of energy for industries, providing multiple advantages. As a result, along with its increasing use in the residential sector, it will continue to catalyze the achievement of targets set for climate change mitigation (fit-for-55).

In this context and given that Greece has received gas late compared to the rest of Europe, there is an urgent need to increase its penetration throughout the country, through the investments for the development of new distribution networks that are in progress. Moreover, he added, the same distribution networks that are currently accommodating natural gas, will in the future act as multipliers for the penetration of renewable gases into the final energy mix, accelerating its decarbonization.

The General Manager of EDA THESS also pointed out that along with the investments in new networks, there should be incentives in order for the citizens in the new areas to switch to the use of natural gas. Also, energy saving programs for existing consumers (such as household condensing boilers that reduce consumption by 25-30%), could partially offset high prices. 

  1. After three months of warfare in Ukraine and following the “response” of the EU through the REPowerEU plan, is the role of gas relegated in your opinion?

 The transitional role of gas will be sustained and will not be relegated by the RePowerEU. On the contrary, in all the realistic scenarios that have been put on the table, natural gas will be the fuel that will offer reliability to the energy system of Greece and Europe for the coming years.

The REPowerEU plan provides for a number of actions to diversify gas supply sources, save energy and further develop renewable energy sources. Natural gas is the cleanest fossil fuel, its CO2 emissions amounting to only half of the emissions from coal combustion. Replacing coal with natural gas reduces total emissions by hundreds of millions of tonnes annually in Europe.

There is no question of relegating the role of gas but it is necessary to replace polluting fuels such as lignite and coal. Νatural gas will support the country’s power generation with alternative supply sources (LNG), covering peak loads and helping to meet the demand that RES are unable to address due to intermittent production and the lack of large-scale storage.

Especially for industry, gas is a reliable form of energy that is always available as it is continuously supplied through the grid, without need for storage tanks and without supply outages. It thus allows industries to plan and manage their productive activity in the optimal way. At the same time, the supply and combustion of natural gas can be regulated with high precision, which makes it an ideal solution for immediate adaptation to the various operational needs of the production process.

The transitional role of natural gas in our country is reflected on the total consumption, which has increased by 10% from 2020 to 2021 and by 6.18% in the first quarter in 2022 compared to the corresponding period last year.

The critical importance of natural gas is reinforced by the large infrastructure projects currently implemented in the country, securing and diversifying energy supply. Projects such as the upgrade of the Revythousa Terminal, the construction of floating LNG storage and regasification units (FSRU), the underground gas storage facility in South Kavala and the cross-border pipelines that have been put into operation (TAP) or will be put into operation soon (IGB), safeguard the adequacy of supply and at the same time, turn Greece into a Liquefied Natural Gas Hub for the Balkans (as supplies are already directed to Bulgaria and Romania) but also for the whole of Europe.

 Emissions reduced by 50% in cities supplied by gas 

  1. Do you believe that the recent geopolitical developments will negatively affect the deployment of new distribution networks in Greece? 

To achieve RePowerEU’s energy goals and aspirations, one must consider the different starting point and maturity of each EU Member State.

Greece, unlike other European countries, welcomed natural gas late. At the moment, a large investment program in new distribution networks is underway, in order to supply natural gas to 70% of the territory, which to date does not have access to gas. It is worth noting that with the distribution network covering the rest of the country, the number of gas delivery points (meters) – which today exceeds 500 thousand – is expected to double, reaching 1 million by 2030.

The same networks, being widely dispersed, will in the future act as multipliers for the penetration of renewable gases into the final energy mix, accommodating and circulating renewable gases (biomethane, hydrogen, synthetic methane) to end consumers currently connected.

If our country really wants to drastically reduce greenhouse gas emissions and achieve the NECP targets, natural gas must first penetrate all areas and replace conventional fuels – namely fuel oil in industries and heating oil in households. This will lead to the immediate reduction of the carbon footprint and the improvement of the environment throughout the country. As I have pointed out in the past, in every new city where gas penetrates, greenhouse gas emissions are reduced by 50%.

The main transitional fuel in Greece for at least another 25 years 

  1. In the context of revised National Plan for Energy and Climate, do you think that the geographical expansion of natural gas in our country will remain a priority?

Europe’s ambition to zero carbon emissions must ensure that the transition to climate neutrality is financially sustainable, socially just and that it safeguards the countries’ security of supply. Existing and planned energy infrastructure are important assets that policy makers must utilize to avoid huge investments that will disproportionately burden end consumers. In the same context, the EU financial tools should be used to the maximum, taking into account the know-how of the Operators, who are the connecting links between consumers and the energy market.

The revision of NECP, in addition to the frontloaded goals it will set for the increase of RES and the production of renewable gases, should strengthen the role of natural gas as the main transitional fuel of our country for at least the next 25 years. Both the NECP and the financial programs and tools should convey the appropriate signals to the market in order for the networks to be deployed throughout the territory, and on the other hand, for the infrastructure to enhance the adequacy of supply and the resilience of the country’s energy system, strengthening the role of Greece as a “gateway” of natural gas for the wider region.

In this regard, the quantified target set for the 50% increase of natural gas use in the end consumption sectors by 2030 compared to 2017 should be preserved in the revised NECP. Funding for the development of gas infrastructure should remain as the top priority; dual-benefit infrastructure, which on the one hand will contribute to achieving the goals of tackling climate change (fit-for-55) and on the other hand, will accelerate the transition to RES and the carbonization of the energy mix.

  1. How do you assess the measures that the Commission has taken to diversify sources of supply and to strengthen security of supply and price competitiveness? Do you think that more drastic measures could be taken to decelerate prices? 

The diversification of the gas import routes achieved in our country through the infrastructure I mentioned, guarantees the resilience of the energy system and the adequacy of supply for all consumers.

In the same context, the obligation to fill gas storage facilities by 90% throughout the EU by next winter, will further enhance security of supply.

With regard to price formation, the voluntary joint procurement mechanism (EU Energy Platform) can enable Member States to jointly negotiate more competitive prices. However, the most drastic measure proposed by both the Greek State and several other European states is the price cap on the wholesale market at least until the end of the war. A measure that will decouple prices from the upstream reference markets (TTF), in order to reduce the effects of price pressures and to adjust the price charged to end consumers according to the fluctuation of supply and demand.

If this proposal is adopted by the European Commission, prices charged to end consumers are expected to gradually decelerate. Let us not forget that, despite the fact that we are in the middle of the summer season and household consumption is limited, energy-intensive industries are still faced with high energy prices affecting their sustainability, competitiveness and the implementation of planned investments.

Triple benefit from biomethane injection

  1. Going back to the changes in the energy mix that are promoted for the coming years, what should be the role of biomethane in the NECP? In countries like Greece, what is the potential for creating a biomethane supply chain?

The injection of biomethane in the distribution networks is a challenge that will bring a triple benefit for our country. Initially, it will help achieve the 35 bcm biomethane target set under REpowerEU. Furthermore, it will contribute to the decarbonisation and greening of the distribution networks, while strengthening the country’s circular economy.

The biggest advantage of biomethane is its full compatibility with the existing distribution networks; networks which, due to their geographical dispersion in urban and interurban areas, will allow the cost-effective connection of production and injection facilities. Therefore, biomethane is a “key” asset for the country, as it will directly help reduce over-reliance by replacing part of Russian gas, while also making distribution networks sustainable.

Today in our country there are about 40 biogas production units which – due to the lack of regulatory framework – are used exclusively for power generation. However, injecting biomethane into the grid is more energy efficient than using biogas to generate power. About 90% of energy is preserved when injected into the grid, compared to only 65-70% when biogas is burned to generate electricity. The first step is to submit proposals for the introduction of the appropriate legal and regulatory framework in line with the European directives, to support appropriate incentives for business initiatives to thrive. In particular, the NECP targets on the production of renewable gases in line with the REpowerEU plan should be made binding. In this regard, it is advisable to apply Feed-in Tariff / Premium mechanisms for producers as well as to establish a framework for Guarantees of Origin.

Energy saving as a “counterweight” to cost

  1. 6. As a measure to reduce reliance from Russian gas imports, REPowerEU also includes energy savings to reduce consumption. What measures could be implemented? 

Together with the REPowerEU plan, the Commission presented the EU communication to promote immediate energy saving by citizens and businesses through changes in consumer behavior and strengthening medium- to long-term structural energy efficiency measures.

The key strategic question for Europeans is what we should do to stop wasting energy. Especially for heating, solid and coordinated efforts by all involved bodies are required in order to take full advantage of the benefits delivered by natural gas as well as the various technological solutions available.

In this context, the State should continue to provide incentives for potential consumers to switch to natural gas, by introducing subsidy schemes for replacing oil heating systems with natural gas systems. These schemes should be granted in all Regions throughout the territory.

For existing residential consumers using Natural Gas, funding should be provided for the replacement of the old burner – which in many cases dates back to 2000 – with modern natural gas condensing boilers; a measure that will directly contribute to energy savings by at least 25-30% while improving the environmental footprint of consumers.

In the same context, the competent bodies that manage the municipal and public buildings should raise their awareness, so that saving programs such as “Electra”, include actions to modernize the installations and the boilers that have been used for more than 20 years and are now considered obsolete, their energy efficiency being lower than 60%. Modern gas boilers with compensation control systems can achieve an efficiency of up to 100%.

Similar programs should be introduced for the upgrading of industrial facilities with technologically advanced equipment that will result in higher energy efficiency and the rationalization of resource management while ultimately promoting their competitiveness and environmental sustainability. It is therefore obvious that energy savings can offset some of the high energy prices.

Distribution networks are also key for the decentralized production of “green” hydrogen

                         It is said that the final answer for the decarbonization of hard-to-electrify activities will be given through the development of a “green” hydrogen economy. What is your opinion? 

Greece has recognized the role of hydrogen in the green transition, highlighting the strategic position of our country as a future producer of green hydrogen for European markets. Moreover, Greece’s potential in RES energy production paves the way for the development of large green hydrogen production projects such as the White Dragon that is expected to be completed in 2029 with a planned production amounting to 250,000 tons of hydrogen / year.

Despite the promising potential, there is currently no production of “green” hydrogen in Greece. The main challenges concern the development of hydrogen demand both for existing uses (heavy industry, refineries) and for new uses (electricity, residential heating). The development of a hydrogen value chain will also depend on the successful completion and connection of production, transmission, distribution, storage and end-use infrastructure. This requires coordinated investment by all actors along the value chain.

As evidenced by other European projects (Ready4H2) that have been piloted, gas distribution networks – with appropriate modifications – will be able to accommodate quantities of hydrogen mixed with natural gas and biomethane in the future. This means that hydrogen will be incorporated in the mixture supplied to the end consumer, utilizing the existing infrastructure and the already implemented investments.

In the future, the biomethane production model I mentioned can be replicated for “green” hydrogen, where Gas Distribution Network Operators will collect and circulate the decentralized production of hydrogen from “small-scale” electrolytes to their networks, utilizing local RES power surplus; a surplus that, in fact, if not converted to hydrogen and introduced into the gas distribution system, will not be exploited. This is a cost that Europe cannot bear if it wants to meet its target of 20 million tonnes of hydrogen annually by 2030 to regain its energy independence and achieve its environmental ambitions.

In this context, we plan long-term investments for the upgrading, repurposing and digitization of infrastructure with new technologies and automatic control systems, so that the networks are ready for the future injection and accommodation of renewable gases.

Realistic goals for a just and smooth energy transition 

  1. What do you think should be done to promote your proposals at National and Community level?

It is easily understood that distribution networks and Operators now play a pivotal role in accelerating the achievement of the RepowerEU goals for energy independence, diversification of resources and the protection of the right of consumers to access affordable energy, which is now one of the key challenges to address.

In this context, we, the Operators, should be able to participate in the Energy Committee – as is the case in the rest of Europe – as through our experience and familiarity with market conditions, we can highly contribute to the drafting of policies and plans that will link the theoretical objectives with realistic and readily applicable solutions for the benefit of end consumers, of the society and the environment.

One of the key issues for energy transition is the revision of the 3rd energy gas package. In this context, the Gas Distributors for Sustainability GD4S – of which EDA THESS is a member -, actively participate in the consultations for the shaping of a framework on the biomethane, hydrogen and decarbonated gases market (Gas Decarbonization Package). To this end, it is appropriate to incorporate the binding objectives of REpowerEU into the Community Directive under consultation and to set the horizontal and vertical separation rules for Operators, to enable them to operate renewable gas networks, supplying initially biomethane and in the distant future, hydrogen.

By raising its voice at Community level, GD4S rightly advocates the creation of a separate EU Gas DSO Entity for natural gas, biomethane and later hydrogen, in order to achieve the objectives I mentioned, utilizing existing Natural gas infrastructure. Thus, the role of Distribution Network Operators is taking hold in the context of European planning.

In a transitional period with intense ambiguity, where on the one hand the gas market tends to stabilize, while on the other, the long-term goal at Community level is to reduce and finally eliminate the use of fossil fuels, it is obvious that realistic objectives for a just and smooth energy transition should be set at both European and national level. In this sense, not only has the end of Natural Gas not come but now its momentum is at its highest, as the role of Natural Gas is being upgraded and acting as a catalyst, it can be the bridging fuel for the achievement of Community goals.

 

 

 

RAE delivers grid emergency action plan, listing 16 dangers

RAE, the Regulatory Authority for Energy, has forwarded, for consultation, an emergency action plan for Greece’s electricity sector, listing a total of 16 possible danger scenarios, two of which, a disruption of Russian natural gas supply and cyberattacks at crucial energy infrastructure, are regarded as highly probable and intolerable.

The aforementioned dangers, along with natural disasters, such as extreme weather conditions, would prompt extended outages, putting lives at risk and resulting in a leakage of information crucial for national security, according to the action plan, which RAE prepared with support from power grid operator IPTO.

Other dangers included in this list include equipment failure, floods, heat waves, snow storms, forest fires and human error.

The action plan’s proposed responses, to avoid grid collapse or even destruction, include load reductions, pumped storage station and electricity export disruptions, activation of reserve solutions and consumption-reduction mechanisms, and, as a last resort, electricity supply disruptions for businesses and households.

DG Energy chief in Athens for talks on range of key projects

The European Commission’s Director-General for Energy Ditte Juul-Joergensen will be discussing a range of issues with the energy ministry’s leadership at a meeting in Athens today, including Greece’s role in the Balkans, western Balkan interconnection projects, natural gas reserves ahead of next winter, as well as Greece’s list of projects related to REPower EU, Europe’s plan for an end to the continent’s reliance on Russian energy sources.

Athens’ plan for wholesale electricity market intervention through a mechanism designed to subdue price levels is also expected to be discussed. It still needs to be approved by the European Commission, according to government sources.

The energy ministry is confident this mechanism will be approved by Brussels following a related agreement reached by its leadership during a visit to Brussels in late May. Market officials have remained uncertain.

Greece is expected to seek funding support estimated between 7 and 8 billion euros through the REPower EU initiative for a total of 14 projects supporting energy efficiency and security.

These projects include an upgrade of the gas grid; installation of a new floating storage unit at the islet Revythoussa, just off Athens; the Dioryga Gas FSRU in Corinth, west of Athens; an FSRU at Alexandroupoli, in Greece’s northeast; the Blue Med hydrogen project; the prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north; IGB and TAP capacity boosts; as well as Greek-Egyptian and Greek-Bulgarian electricity grid interconnections.

PPC awaits Brussels energy strategy to decide on Ptolemaida V

Power utility PPC will wait for the European Commission’s finalized decisions on a strategic plan intended to end the EU’s reliance on Russian fossil fuels before it decides on the operating and conversion details of its prospective Ptolemaida V power station in northern Greece, to be launched as a lignite-fired facility before being converted to natural gas.

The PPC board is now expected to decide on Ptolemaida V’s conversion date towards the end of this year, according to sources.

Ptolemaida V, expected to undergo a trial run in the second half of the year before being launched late in the year or early in 2023, will be introduced as Greece’s last lignite-fired power station.

Early in April, prime minister Kyriakos Mitsotakis announced extensions to withdrawal dates for older lignite-fired power stations that were originally headed for closure prior to 2025. At the time, the prime minister also informed that Ptolemaida V could now operate as a lignite-fired unit until 2028.

Revisions to the country’s decarbonization plan have been prompted by energy security concerns following Russia’s invasion of Ukraine and the exacerbation of the preceding energy crisis as a result of this war.

The Greek government has decided to increase lignite mining output as a safety measure should Russia interrupt its natural gas supply.

A year ago, PPC had announced it intended to convert Ptolemaida V into a natural gas-fired facility as of 2025, but the latest energy security concerns froze this plan.

 

DEPA Infrastructure sale certification obstacles cleared

Italgas, the Italian buyer of gas company DEPA Infrastructure, a deal yet to be finalized, has accepted certification terms set by RAE, Greece’s Regulatory Authority for Energy, for the gas company’s three subsidiaries, the gas distributors EDA Attiki, EDA THESS and DEDA, a development that paves the way for the finalization of the sale, worth 733 million euros.

RAE has forwarded its decision on certification conditions for publication in the government gazette after clarifying terms, accepted by Italgas, Europe’s second largest gas distributor.

Italgas officials have been in Greece since December, when the sale and purchase agreement was signed by the sellers, the Greek State and Hellenic Petroleum (ELPE), holding a stake, and the Italian buyer.

During this period, the Italgas officials have been collecting financial and other data concerning DEPA Infrastructure’s subsidiaries.

NECP officials at odds over future gas role in Greece

Local authorities are at odds over the role of natural gas in the country’s National Energy and Climate Plan, to be revised, as well as on the decarbonization road map for the coming decades.

A second session just held by an energy ministry working group assembled for the NECP revisions has revealed contrasting views on the future plans for natural gas in Greece, energypress sources have informed.

One side of the working group’s members wants an end to the expansion of natural gas in Greece and containment of investments for new natural gas infrastructure, especially networks.

At the other end, a second group of officials supports that Europe’s intention to end the continent’s reliance on Russian natural gas highlights the need for diversification of energy sources in Greece, as the country’s system is designed based on the assumption of Russia being a key supplier of natural gas.

This group also noted that Greece, based on the new European energy plan, stands to become a main gateway for natural gas to the wider region and, as a result, is favorably positioned for related gas infrastructure investments worth 10 billion euros, through the REPowerEU plan, prompted by Russia’s invasion of Ukraine.

 

Electricity producer tax for windfall profits in parliament

A draft bill proposing an extraordinary 90 percent tax on windfall profits earned by electricity producers – primarily operators of natural gas-fueled power stations – as a result of sharply higher natural gas prices over the past nine-month period, has been submitted to parliament for discussion and ratification following talks on the matter between the finance and energy ministries.

The draft bill is planned to legislate this extraordinary tax as well as a formula to be used for calculating respective company amounts to be taxed.

Discounts offered by companies to customers will be reduced from sums to be taxed, along with any returns resulting from bilateral contracts.

Once the draft bill is legislated, RAE, the Regulatory Authority for Energy, will calculate amounts for each company to be subject to the extraordinary tax.

According to a related report prepared by RAE and delivered to the government and parliament, power utility PPC represents 729.91 million euros of the market’s total of 927.44 million euros in windfall profits amassed over a six-month period between October, 2021 and March, 2022.

The country’s independent producers, Mytilineos, Elpedison and Heron, along with RES producers participating in the market, represent the remaining 197.53 million euros in windfall profits, the RAE report determined.

Key energy infrastructure included in new recovery fund

The government, intending to make the most of its favourable geographic location for diversified natural gas supply in the wider region, plans to seek EU funding support, through the REPowerEU package, for a series of natural gas and electricity grid projects awaiting development.

These projects are planned to be included in the country’s revised EU Recovery and Resilience Facility, to be submitted to by the government to the European Commission by early July.

The investments will aim to end Greece’s reliance on Russian energy sources by 2027, as planned by the REPowerEU package.

Besides the addition of natural gas infrastructure, absent from Greece’s existing recovery plan as a result of the European Commission’s unfavorable view on funding support for projects concerning natural gas, seen as a transitional energy source towards zero emissions, the country’s revised plan will also seek to incorporate electricity transmission projects that will contribute to the reinforcement of renewable energy sources in Europe’s energy mix.

The government is believed to have already prepared its catalogue of electricity and natural gas infrastructure project proposals to seek funding through the REPowerEU initiative.

An electricity grid interconnection project to link the Greek and Egyptian systems and transmit green energy, exclusively, to Greece and the EU has been included in the Greek catalogue, sources informed.

An additional central gas pipeline, to run 650 km from Komotini, northeastern Greece, to Elefsina’s Patima area, west of Athens, has also been included in the Greek catalogue, following a request by DESFA, the gas grid operator.

PM discusses Greek regional gas supply prospects in talks with US president

The crucial role to be played by northeastern Greece’s prospective Alexandroupoli FSRU as a project that promises to help reduce and eliminate the reliance of the Balkans and, by extension, east Europe on Russian gas was stressed during talks between Greek Prime Minister Kyriakos Mitsotakis and US president Joe Biden in Washington yesterday.

The Greek leader, who stressed that the Alexandroupoli FSRU will be installed at a port just 500 km from the Ukraine border, added the facility, discussed extensively between the two leaders, will play a pivotal role in Europe’s decision to end its reliance on Russian gas.

Mitsotakis also discussed Greece’s ambitious yet not unattainable objective of becoming an energy hub in the Balkans, as a first step, as well as a key player in eastern Europe.

Three prospective LNG terminals – Alexandroupoli FSRU I and II, as well as Dioryga Gas, close to Korinthos, west of Athens – combined with the existing LNG terminal on the islet Revythoussa, just off Athens, that will soon acquire a fourth storage unit, could elevate Greece’s regional role as a main gas supplier in the Balkans and eastern Europe.

 

 

 

Russian gas payments by Greek companies due next few days

Greek companies that have imported Russian natural gas supplied by Gazprom and face installment payment deadlines expiring between May 20 and 25 are expected to accept Moscow’s ruble-currency demands as part of a wider EU approach that still remains unclear.

Even so, the European Commission, appearing set to revise EU directives concerning payment procedures by member states for Russian gas, is believed to be adjusting to Moscow’s ruble-currency demands.

Greek companies that have imported Russian gas believe the dispute will soon be resolved and are awaiting EU directives and related signals from the Greek government before proceeding with installment payments, sources informed.

The Greek government and the country’s energy players are continuing to observe emergency plans as energy supply security remains a threat as long as Russia’s war on Ukraine continues.

 

 

Brussels crisis plan presented to EU leaders next week

The European Commission will present a short-term intervention plan for the electricity and natural gas markets at a council meeting of EU leaders next week, the validity of the measures to run through next winter, until May 1, 2023, according to sources.

It remains unclear if this set of measures, intended to subdue exorbitant energy prices, has been finalized or will undergo revisions.

The package is believed to contain new measures as well as older ones that have already been discussed at national and European level.

The plan includes an initiative for the establishment of an EU Energy Platform, whose aim will be to ensure energy supply at fair prices as well as greatly reduced, even eliminated, reliance on Russian natural gas.

EU member states will be given a specific period of time to regulate prices in the retail gas market. Emergency cash-flow measures offering relief to traders will also be made available.

Electricity market measures are expected to include taxation or regulation of excess earnings, energy price regulation in the retail market, as well as price regulation for small and medium-sized enterprises.

 

 

Biomethane a priority for DESFA, pilot project in the making

Gas grid operator DESFA, placing biomethane interests among its priorities, intends to forward a related proposal to the energy ministry by the end of June as part of ongoing consultation for regulatory framework revisions that will enable the Greek market to incorporate biomethane as a new commercial activity.

DESFA, supported by consultants, is preparing a related study on amendments needed to existing laws – covering domains such as environmental and building matters – for the development of a biomethane market in Greece.

Biomethane could replace natural gas for the operation of a compressor station in Thessaloniki’s Nea Mesimvria area and another in Abelia, Thessaly, central Greece, now being developed.

Both locations are situated close to areas offering considerable waste quantities, which makes biomethane projects viable solutions that will significantly limit DESFA’s environmental footprint.

The biggest part of DESFA’s transmission network is relatively new and could, as is, or with minor revisions, host green gases, namely biomethane and hydrogen. New network sections now being developed would be ready to transmit green gases from the start.

DESFA is currently holding preliminary talks with market players for possible partnerships in a pilot biomethane project. However, the operator intends to finalize its biomethane business plan before deciding on any partnerships.

 

Energean plc announces Athena gas discovery, offshore Israel

London, 9 May 2022 – Energean plc (LSE: ENOG, TASE: אנאג) has announced a commercial gas discovery by the Athena exploration well, offshore Israel.

Highlights

  • Commercial discovery made by the Athena exploration well, Block 12, in the A, B and C sands. Preliminary analysis indicates that the Athena discovery contains recoverable gas volumes of 8 bcm (283 bcf / (51 mmboe) on a standalone basis.
  • This discovery is particularly significant as it de-risks an additional 50 bcm (1.8 tcf / (321 mmboe) of mean unrisked prospective resources across Energean’s Olympus Area (total 58 bcm / 372 mmboe including Athena).
    • The Olympus Area is Energean’s newly defined area which includes Athena, plus the undrilled prospects on Block 12 and the adjacent Tanin Lease.
  • Athena can be commercialised in the near-term via tie-back to the Energean Power FPSO, enhancing the profitability of the Karish-Tanin development. Alternatively, it could form part of a new Olympus Area development.
  • Energean is therefore actively pursuing development options for the commercialisation of the wider Olympus Area, (potentially including Athena), such as:
    • Further domestic Israeli gas sales:
      • New Gas Sales and Purchase Agreements (“GSPA”) underpinned by the continued growth of the Israeli power market
      • Spot sales
    • Export options:
      • Developing the Memorandum of Understanding (“MoU”) signed with The Egyptian Natural Gas Holding Company (“EGAS”) for the supply of up to 3 Bcm/yr into a binding agreement
      • Exports to other regional and European markets via pipeline and LNG via Cyprus and/or Egypt
  • The economics of gas produced and sold from Block 12 are not subject to royalties payable to the original sellers of the Karish and Tanin leases, leading to an approximate 8% increase in revenue for the same volumes sold, when compared with the Karish and Tanin discoveries

Mathios Rigas, Chief Executive of Energean, commented: 

“We are delighted to announce this new gas discovery at Athena and the potential of the wider Olympus Area. We are considering a range of strategic commercialisation options both for a standalone and wider Olympus Area development, including domestic and multiple export routes.

“This discovery and the broader de-risking of a number of prospects in the Olympus Area reaffirms the role of the East Mediterranean as a global gas exploration hotspot. It strengthens our commitment to provide competition and security of supply to the region, enables the optimisation of our Israel portfolio and fulfils one of our key milestones for 2022.”

Athena Gas Discovery

Athena Well Results

The Athena exploration well was drilled on Block 12 (Energean Israel, 100%), located 20 kilometres from Karish and 20 kilometres from Tanin A, in a water depth of 1,769 metres. It was drilled in 51 days and came in below the budget of $35 million. The Athena exploration well is the fifth well in a row that has been drilled successfully by Energean in Israel.

A gross hydrocarbon column of 156 metres was encountered in the primary target (the A, B and C sands). Preliminary analysis indicates that the Athena discovery contains recoverable gas volumes of 8 bcm (283 bcf / (51 mmboe) on a standalone basis. Additional analysis will now be undertaken to further refine the full resource potential (including volumes contained within thinner sands between the main reservoir units) and to confirm the liquids content of the discovery.

The Athena well has been suspended as a future production well.

Commercial hydrocarbons were not discovered in the deeper secondary target (22% Probability of Success, D sands).

Multiple Commercialisation Options Under Consideration

Athena can be commercialised in the near-term via tie-back to the Energean Power FPSO, enhancing the profitability of the Karish-Tanin development. Alternatively, it could form part of a new development called the Olympus Area.

Energean’s Olympus Area consists of Block 12 and the prospects on the Tanin lease. The discoveries and prospects in this area lie along the same geological trend and Athena was drilled on the same direct hydrocarbon indicator (shown in the seismic analysis) as Tanin. As such, Energean is confident that the Athena discovery has de-risked the A, B and C sands in the remaining prospects of the Olympus Area, estimated to be 50 bcm (1.8 tcf / (321 mmboe) of mean unrisked prospective resources (total 58 bcm / 372 mmboe including Athena). This estimate excludes the liquids component as well as any gas upside in the thinner sands between the main reservoir units.

Energean has identified multiple commercialisation options for the Athena discovery and potential future Olympus Area development, including both domestic customers and export routes. These options include:

  • Further domestic Israeli gas sales:
    • New GSPAs underpinned by the continued growth of the Israeli power market
    • Spot sales (spot contract signed with the Israel Electric Corporation (“IEC”) in March 2022)
  • Export options:
    • Developing the MoU signed with EGAS into a binding agreement. The MoU was signed in December 2021 for the sale and purchase of up to 3 bcm/yr of natural gas on average for a period of 10 years, commencing with initial volumes of up to 1 bcm/yr.
    • Exports to other regional and European markets via pipeline and LNG via Cyprus and/or Egypt

Block 12 (including Athena) benefits from an absence of any seller royalties on production or constraint on export from the lease, improving the economics versus the Karish and Tanin leases.

Remaining Drilling Campaign

The Stena IceMAX has now moved to the Karish Main-04 appraisal well, of which the top hole has already been drilled. The rig will then complete the Karish North development well. A decision on whether to drill the previously communicated optional wells (Hermes and/or Hercules) is expected to be made by the end of Q2 2022.

 

Alexandroupoli FSRU development launch today, pivotal project

Development of the Alexandroupoli FSRU in Greece’s northeast, a project promising to boost energy security by broadening energy source diversification for Greece and the wider Balkan region, is scheduled to officially commence today.

The prime ministers of Greece and Bulgaria, as well as Serbia’s president, will attend today’s official ceremony. The leaders will highlight the need for energy source diversification in the Balkans and reduced reliance on Russian natural gas.

The Alexandroupoli FSRU promises to establish Greece as a gas hub for transportation of LNG into the EU.

Natural gas consumption in southeast Europe totals between 10 and 11 bcm annually, half this amount provided by Russia.

The Alexandroupoli FSRU, expected to be ready to operate by the end of 2023, is planned to offer a capacity of approximately 5.5 bcm, greatly diversifying gas supply to southeast Europe.

The project is budgeted at 380 million euros, of which 166.7 million euros will be provided through the National Strategic Reference Framework (NSRF).

The Alexandroupoli FSRU will be linked with Greece’s gas grid via a 28-km pipeline, enabling gas supply to Greece, Bulgaria and the wider region, including Romania, Serbia, North Macedonia, Moldavia and Ukraine.

 

Energean Israel signs new Gas Sales and Purchase Agreement

London, 3 May 2022 – Energean plc (LSE: ENOG, TASE: אנאג) is pleased to announce that Energean Israel has signed a new Gas Sales and Purchase Agreement (“GSPA“) for up to 0.8 bcm/yr.

Mathios Rigas, Chief Executive of Energean, commented:

“We are delighted to have signed a new GSPA of up to 0.8 bcm/yr for our flagship assets in Israel, delivering on one of our key milestones for 2022. This is the third in a row for us from the Israel Electric Corporation (“IEC“) power plant privatisation programme and I want to thank Edeltech and Shikun & Binui Energy for their continued trust and confidence. I’m pleased to also confirm that the Energean Power FPSO has sailed-away and we look forward to delivering first gas from Karish, which remains on track for Q3 this year.”

East Hagit Power Plant Limited Partnership commented:

“This is another important step in the completion of the East Hagit acquisition, and a further stage of the joint process by Edeltech and Shikun & Binui Energy to increase competition and efficiency of the electricity market, for the benefit of Israeli consumers.”

New GSPA signed with the East Hagit Power Plant Limited Partnership

Energean has signed a new GSPA, representing up to 0.8 Bcm/yr, to supply gas to the East Hagit Power Plant Limited Partnership (“EH Partnership“), a partnership between the Edeltech Group and Shikun & Binui Energy. EH Partnership was the winning bidder in the IEC East Hagit tender process, the third IEC power plant in the current series of four to be privatised. Energean is also a supplier of gas to Ramat Hovav and Alon Tavor, the first two power stations privatised in the series.

The GSPA is for a term of approximately 15 years, for a total contract quantity of up to 12 bcm.  The contract contains provisions regarding floor pricing, offtake exclusivity and a price indexation mechanism (not Brent price linked). The GSPA has been signed at levels that are in line with the other large, long-term contracts within Energean’s portfolio. The agreement has the potential to generate revenues of up to $2 billion over the offtake period and is subject only to buyers’ completion of the privatisation process, including lenders’ consent.

Combined with the spot sales agreement signed in March 2022 with IEC, the agreements have enhanced Energean’s gas sales portfolio towards filling the 8 bcm/yr of capacity on the Energean Power FPSO.

Operational update – Karish Project

The Energean Power FPSO has sailed-away from Singapore and Energean remains on track to deliver first gas from Karish in Q3 2022.

 

 

Unclear EU stance on Moscow’s ruble payment demand for gas

The European Commission appears to be deliberately maintaining an unclear stance on Moscow’s demand for natural gas supply payments in the ruble currency, an in-between position that presently enables European companies to abide by Russian President Vladimir Putin’s related decree without breaching EU sanctions imposed on Russia.

Yesterday’s EU council meeting of energy ministers for a common European stance on Russia’s ruble-currency payment demand for Gazprom natural gas failed to produce an agreement, instead maintaining the ambiguity that has hovered in recent weeks.

European Commissioner for Energy Kadri Simson reiterated that payments for Russian natural gas in the ruble currency would represent a violation of European sanctions on Russia, and, as a result would not be accepted. However, she did not offer specific advice on how European companies should make their payments for Russian natural gas when the next round of payments are due. Simson ascertained that clearer directions would soon be issued, without specifying when.

Italian minister for Ecological Transition Roberto Cingolani has allegedly supported that European companies must be given the ability, at least temporarily, to conform to Russia’s payment demands, according to a Politico report.

However, the Italian government has denied that Rome is preparing to make ruble-currency gas payments to Russia, describing the Politico reports as misleading.

 

 

 

REPower EU plan overambitious, ‘an objective, not a specific strategy’

The European Commission’s REPower EU transition plan, aiming to greatly reduce Europe’s reliance on Russian gas, is overambitious and should be regarded as an objective rather than a set of specific measures, officials taking part in the recent annual Gas Infrastructure Europe conference, an authoritative sector event, have concluded.

The calculations offered by the REPower EU plan are incorrect, Torben Brabo, GIE’s president, has told the Euractive agency, adding that a closer look at the figures concerning Russian natural gas supply, LNG supply, as well as biomethane projections, renders the European plan as overambitious.

LNG availability and purchase projections in the REPower EU plan are possibly too high, the GIE president stressed.

Officials linked with LNG infrastructure told the GIE conference that the LNG market’s actual conditions will prevent the EU plan’s lofty targets from being achieved. Anything beyond 50 percent of the target set will be difficult to attain, these officials contended.

American current gas liquefaction capacity does not suffice for supply of an additional 15 bcm of LNG to Europe, as specified in the EU plan, officials taking part in the GIE conference contended.

Qatar and other LNG exporters in the Middle East have already committed amounts to non-EU buyers, while the REPower EU plan’s 35-bcm biomethane objective appears to be too optimistic, they added.