gas pipelines

Gas amounts channeled north on decline, projects in doubt

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Market interest for further development of European gas infrastructure appears to be weakening, raising concerns about the success of forthcoming trans-Balkan market tests aimed at increasing regional network capacity, sources have underlined.

Although the level of interest for further development of gas infrastructure in Greece and the wider region was considerable in non-binding phases of market tests, potential users are now holding back as the procedure’s binding phases approach.

This essentially means that market players are avoiding making long-term commitments, which is necessary in order for the network expansion and upgrade plans to proceed.

Gas-order cancellations from Greece to markets further north are being recorded, which, if continued, will cast doubts over gas network expansion plans, or even make them unnecessary, sources told energypress.

A similar trend has taken hold at Greek gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, as market players are cancelling LNG shipments because they have nowhere to channel gas quantities.

Though there is still plenty of time ahead before binding bids are submitted to trans-Balkan market tests, whose results will offer a clear-cut picture of the situation, the level of interest being recorded by operators preparing project proposals is well below that expressed in non-binding market tests. The Greek-Bulgarian IGB gas pipeline, now being gauged for a capacity boost, is one such example.

Gas consumption levels are on a downward trajectory and gas storage facilities in the EU are at high levels for this time of the year, averaging 68.61 percent full.

It is still too early to draw definite conclusions, but latest data is showing a change of scene. It remains to be seen how this shift could influence the investment plans of operators.

Big interest in Greece-North Macedonia gas pipeline tender

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A tender offering a contract for the construction of a gas pipeline linking the Greek and North Macedonian systems has attracted considerable interest, including companies from abroad and the neighboring country, energypress sources have informed. Interested parties had until yesterday to submit offers.

Officials expect work on the gas pipeline’s development to begin this coming spring, while the project’s delivery is anticipated within 2025.

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

The pipeline’s initial capacity will be 1.5 billion cubic meters, annually. It will be built according to technical specifications enabling transportation of renewable gas, entirely.

Greek gas grid operator DESFA and its North Macedonian equivalent, Nomagas, signed an agreement for the project in September, 2023 as a follow-up to a bilateral agreement reached between the Greek and North Macedonian governments in March, 2021.

The European Investment Bank plans to extend funds worth 2.48 billion euros for the Greek-North Macedonian gas pipeline through the EU’s Western Balkans Investment Framework (WBIF).

 

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

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

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

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

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

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

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

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

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

DESFA, Balkan operators to meet January for market test

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

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

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

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

 

EastMed boosted by ENI discovery, Cypriot leader’s comments

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Italian multinational energy company Eni’s discoveries at block 6 of the Cypriot EEZ and favorable comments by Cypriot President Nikos Christodoulides have come as a boost for the development prospects of the natural gas pipeline EastMed, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Cyprus and Greece.

The Cypriot president, in comments made just days ago, linked Eni’s recent findings at block 6 of the Cypriot EEZ with the revival of the pipeline.

According to sources, ENI, which has rights to seven of ten licensed blocks at the Cypriot EEZ, estimates that it will be able to shape a development plan for the field and proceed with its exploitation early in 2024, once drilling confirming the discovery is conducted, most probably in January.

If the plan is confirmed, the block will be the first to be developed in the Cypriot EEZ since 2011, when Aphrodite was discovered, followed by four more discoveries.

In an interview last Thursday with Italian newspaper La Repubblica, the Cypriot president, citing ENI’s discovery, noted that EastMed “has always been one of the strategic options for the implementation of an energy corridor linking the Eastern Mediterranean with Europe, facilitating the export of energy resources through Italy”.

 

EastMed pipeline market test in early 2024, project feasible

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A market test for the EastMed gas pipeline, planned to transport natural gas from fields in the eastern Mediterranean to Italy and central Europe via Greece, will be held in the first quarter of 2024, energypress sources have informed.

Market players are already expressing interest in the project ahead of the anticipated market test, expected to take about one month to complete.

Both producers and suppliers interested in utilizing the prospective pipeline to transport gas quantities from the east Mediterranean to European markets via Greece are expected to submit offers to the market test.

Though the test’s initial round will be non-binding, its outcome will help shape the project’s developments prospects, which have fluctuated for a number of years.

Competent sources note that the technical feasibility of the pipeline – to offer an annual 21 bcm capacity and cover 2,000 kilometers, of which over 1,400 kilometers will run underwater – has been proven and clarified through a number of studies.

However, questions linger over the project’s cost. Its budget, estimated at 6.1 billion euros, is likely to increase as development costs have risen considerably since the previous evaluation.

Discussions on EastMed date back nearly fifteen years. The project has been on the EU’s PCI list since 2013, a status it is expected to retain when the new and revised list is soon officially present, most probably within November.

 

DESFA gas pipeline projects in north progressing as planned

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

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

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

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

Electricity prices projected to rise 15-20% in November

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A recent rise in the Dutch TTF index, a European gas benchmark, as a result of the Middle East crisis and a rupture on the Baltic-connector undersea gas pipeline between Finland and Estonia, which has raised suspicions of Russian involvement, will result in significantly higher November gas delivery contracts, which, in turn, will push up domestic wholesale electricity prices, market officials have projected.

Wholesale electricity prices are seen rising between 15 and 20 percent next month, which suppliers would relay to consumers.

Electricity suppliers are expected to announce monthly nominal tariffs – not including subsidies – of at least 18 cents per KWh for November.

The country’s electricity suppliers, under current law, are required to announce price levels for every forthcoming month by the 20th of each preceding month. This requirement will be terminated at the end of the year, when emergency energy-crisis measures are to be lifted.

The energy ministry is currently finalizing a plan that will introduce – as of January, for 12 months – a single variable tariff formula for all electricity suppliers, who will apply it and then set respective tariff levels depending on their profit-margin strategies.

The plan’s objective being to intensify competition and subdue prices, while also offering consumers price-comparing clarity.

All electricity consumers will be automatically transferred to the new single variable tariff as of January 1, unless they opt, prior to this date, for any other supply deals offered by suppliers.

 

Revised Nabucco pipeline hopes fade, Sofia drops pro-Turkish stance

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A Russian initiative to establish Turkey as a central gas hub, through a revival of a revised version of the old Nabucco project plan, as the transitional government in Bulgaria had attempted to do last spring, appears to have hit an impasse and is unlikely to progress further.

Under the leadership of Bulgarian Prime Minister Nikolai Denkov, who assumed office in June, the new government in Sofia has veered away from the pro-Turkish stance of its predecessor. Instead, it has embraced a more pro-Western orientation in the realm of energy policy.

Also, the European Commission has not shown any interest to financially support the project, dubbed Solidarity Ring.

The ambitious plan had received the backing of certain political circles in Bulgaria keen to exploit Azerbaijan President Ilham Aliyev’s intention to more-than-double his country’s gas exports to the EU from 11 to 27 bcm by 2027.

Bulgaria, Romania, Hungary and Slovakia signed an MoU in Sofia in early May, in the presence of Aliyev, for increased gas supply to central Europe via the Solidarity Ring route.

However, talks in support of this gas pipeline project have ceased, despite its supposed intention to help end Europe’s energy reliance on Russia, EU sources have informed.

Athens, along with other major international energy players, contributed to this impasse. In a letter forwarded to the European Commission in May, Athens noted the project would degrade Greece’s role on the international energy map, upgrade Turkey’s, and serve Russia’s efforts to regain access into the European market, indirectly, by supplying Russian gas as Azeri gas.

This is possible as the Solidarity Ring would bypass Greece and follow a Turkish-Bulgarian-Romanian-Hungarian-Slovakian route into central Europe, meaning Ankara could use Turk Stream, the Russian pipeline running through Turkey, to feed Solidarity Ring.

 

DESFA gas pipeline for west Macedonia approved by ministry

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

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

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

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

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

DESFA tender for gas pipeline to North Macedonia imminent

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

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

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

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

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

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

Athens troubled by Bulgaria’s Solidarity Ring project

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Athens intends to soon raise concerns, to the European Commission, over Bulgaria’s Solidarity Ring project, planned to transport natural gas of ambiguous origins to central Europe through a route bypassing Greece, crossing Turkey and benefiting, it seems, Russia.

Greek government officials are now preparing a letter for the European Commission in which a series of crucial questions regarding the Bulgarian project will be raised, including who stands to be its true beneficiary and whether the use of European funds for the revival of a version of the failed Nabucco pipeline would be appropriate.

The Nabucco pipeline had been planned to bypass Greece for the transportation of Caspian gas along a route running from Turkey to Austria, via Bulgaria. However, the TAP project, which connects with the Trans Anatolian Pipeline at the Greek-Turkish border, crosses northern Greece, Albania and the Adriatic Sea to southern Italy, prevailed in 2013.

Besides sidelining Greece, Bulgaria’s Solidarity Ring project would also exclude Greek gas grid operator DESFA, gas company DEPA, a partner in the Greek-Bulgarian IGB gas pipeline, as well as the TAP project’s shareholders.

The Solidarity Ring project, local authorities suspect, could be used to export Russian gas, disguised as Azerbaijani gas, to the EU via Bulgaria and Turkey.

 

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.

IPCEI support sought by DESFA, Bulgartransgaz for hydrogen projects

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Greek gas grid operator DESFA and its Bulgarian counterpart Bulgartransgaz, which have strengthened ties in recent years, aim to secure development support for two common hydrogen-related projects via IPCEI (Import Projects of Common European Interest) status, which, if obtained, would pave the way for EU funds stemming from the Connecting Europe Facility (CEF).

One of the two projects concerns an upgrade of existing gas infrastructure belonging to the two operators so that – in the future, when the technology is ready – they may also transmit renewable gas, in other words, hydrogen made using renewable energy or biomethane produced from organic waste such as human or animal sewage or food.

The second of the two DESFA-Bulgartransgaz projects eyeing CEF funding support entails developing a brand new main system of pipelines, exclusively for renewable gas transmission, between Greece and Bulgaria.

This project would serve as a key decarbonization tool for the two countries, as well as the wider region, aiding climate-neutrality efforts by incorporating hydrogen into the energy mix.

DEPA Commercial, Moldova’s Energocom nearing gas deal

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Greek gas company DEPA Commercial is close to establishing a gas supply deal with Moldovan state gas and electricity supplier Energocom, sources have informed, noting the two sides are currently discussing gas quantities and prices for what could be a long-term agreement.

Both Energocom and Moldova, as a whole, are looking for alternative energy sources as the Balkan country, neighboring Ukraine, seeks to end its reliance on Russian fossil fuels.

Kostas Xifaras, chief executive at DEPA Commercial and Energom’s general director Victor Binzari have held talks as part of an official visit to Athens by the leadership of Moldova’s energy ministry.

Greek energy minister Kostas Skrekas, who met with his Moldovan counterpart, Victor Parlikov, during this visit, released an announcement about the prospective supply deal.

DEPA Commercial gas quantities would reach Moldova through an eastern corridor, or network of gas pipeline interconnections linking Greece with Bulgaria (IGB), Bulgaria with Romania, and Romania with Moldova.

DEPA Commercial is also looking to broaden its gas trading activities with other Balkan countries ahead of the arrival of the Alexandroupoli FSRU, a floating LNG terminal now being developed in Greece’s northeast.

DEPA Commercial is a member of the five-member Gastrade consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU.

Greek-North Macedonian gas pipeline decisions imminent

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Greek gas grid operator DESFA and its North Macedonian counterpart NOMA Gas are believed to be nearing respective investment decisions for the construction of a natural gas pipeline linking the neighboring countries.

Company officials have been meeting more frequently of late, their most recent session held in Skopje for talks on how to better coordinate funding efforts for the gas pipeline project and to move ahead with tenders concerning its procurement and construction.

DESFA, sources informed, is expected to reach an investment decision by the end of summer, or early September, for the Greek segment of the gas pipeline project, a 55-km stretch starting from Nea Mesimvria in the country’s north.

The Greek gas grid operator is also preparing for tenders concerning pipeline procurement and the project’s construction.

This gas pipeline project promises to diversify the gas supply sources of North Macedonia, currently entirely dependent on its Bulgarian interconnection, experiencing congestion. It will also offer new gas supply routes to the western Balkans.

Greek-US energy agenda focused on 3 projects

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Three energy infrastructure projects, the Alexandroupoli FSRU in Greece’s northeast, an oil pipeline running from the Alexandroupoli port to Burgas, on Bulgaria’s Black Sea coast, and a Greek-Egyptian grid interconnection, were focal points in talks yesterday between Greek and American officials, as part of US Secretary of State Anthony Blinken’s official visit to Athens.

The two sides, meeting for the 4th round of a Greece-US Strategic Dialogue, appeared determined to push ahead with the three projects, propelled by Russia’s war on Ukraine, which has prompted Europe to move in a direction ending its reliance on Russian fossil fuels.

It was agreed that Athens and investors need to accelerate efforts for the aforementioned projects to further marginalize Russian energy supply to Europe.

Besides offering full support for the three energy infrastructure projects, US officials also expressed satisfaction about the recent launch of the Greek-Bulgarian IGB gas pipeline as well as ongoing plans for a pipeline to run from Greece to North Macedonia.

However, the US officials kept a distance from the discovery of gas deposits by Israel, Cyprus and Egypt in the east Mediterranean, as well as the East Med gas pipeline plan – which would connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline – presumably to avoid upsetting Turkey, despite problems that have weighed down US-Turkish ties of late.

 

Analysts expect new round of gas price increases this year

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Analysts are projecting an eventual rise in gas prices over the next few months as a result of the combined effect of several factors, the main one being Europe’s almost entire dependence, these days, on imported LNG.

This LNG dependence, following Europe’s drift away from Russia, along with Europe’s limited LNG gasification infrastructure, until at least 2025, will inevitably lead to price increases at some point in 2023, analysts have noted.

Natural gas prices have been falling in recent times and are expected to, once again, drop below the price level of coal. This price descent, analysts believe, will reignite industrial activity in Europe, boosting gas demand.

Also, Chinese production, currently operating at below full capacity as a result of the country’s strict adherence, until recently, to a zero-Covid policy, is also expected to get back into top gear within 2023.

In addition, if Europe avoids recession, then global gas orders will skyrocket.

Taking these factors into account, Europe needs to maintain links with pipeline gas supply if energy security is to be ensured on the continent, analysts have noted.

This highlights the significance of projects such as the East Med gas pipeline plan, now seeming to be back in favor. It promises to connect Israel, Cyprus and Greece, over a total distance of 2,000 kilometers, before crossing to Italy via the Poseidon pipeline, a 210-kilometer stretch.

Israel injecting new life into East Med gas pipeline project

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The newly elected Israeli government appears set to inject new life into the prospective East Med gas pipeline, its interest emerging one year after the US had announced it would no longer support the project, a stance now likely to be revised.

Israeli foreign minister Eli Cohen expressed the country’s interest in the project to his Greek counterpart Nikos Dendias during the latter’s official visit to Israel earlier this week.

The prospective pipeline is planned to cover a total distance of 2,000 kilometers, of which over 1,400 kilometers will run underwater, to connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline, a 210-kilometer stretch.

“We agreed to the exportation of Israeli gas through Greece and Cyprus, which will reach all of Europe. At a time of global energy crisis, it will strengthen our international position and bring a lot of money to the country,” Cohen, Israel’s foreign minister, announced following his meeting with his Greek counterpart.

Reiterating this interest, Israeli prime minister Benjamin Netanyahu, who has returned to the country’s top post after his Likud party formed a coalition with ultranationalist and ultra-Orthodox Jewish allies, announced that he instructed the head of Israel’s National Security Council to initiate a trilateral meeting of the leaders of Greece, Israel and Cyprus for energy-related talks.

Tel Aviv is seeking to reimpose itself as a force in eastern Mediterranean energy matters.

The East Med gas pipeline plan is likely to be on the agenda when US secretary of state Antony Blinken visits Athens on February 21 and 22.

East Med has gained renewed significance as Europe is looking for alternative sources of natural gas and major oil companies, especially US firms such as ExxonMobil, focusing on a venture south of Crete, are involved in hydrocarbon exploration efforts in the eastern Mediterranean.

Given the strained Israeli-Turkish ties, Israeli officials know well that the development of a gas pipeline across Turkey is not a viable option.

DESFA development of west Macedonia pipeline set to start

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Gas grid operator DESFA is set to begin its development of a gas pipeline in northern Greece’s west Macedonia region next month, an official ceremony for the start of work slated for end of February or early March, energypress sources have informed.

According to the operator’s ten-year development plan covering 2022 to 2031, the gas pipeline, a project budgeted at 147 million euros, is scheduled to be completed in autumn, 2026.

The gas pipeline project’s financing will be covered by DESFA capital as well as a syndicated 505 million-euro bond loan agreement reached by the operator with the country’s four main banks for its ten-year development plan from 2021 to 2030.

The pipeline will cover a total distance of 147 kilometers, running from Trikala in the Imathia region to Ptolemaida. It will branch off at four points for distribution to the region’s urban centers, namely Edessa, Skydra, Naoussa, Veria, Florina Amynteo, Ptolemaida and Kozani, and will be equipped for a prospective extension to the Kastoria area.

This pipeline, it is worth noting, will be totally compatible to carry and transport hydrogen, making it Greece’s first and one of Europe’s few pipelines fully supporting transportation of renewable gases.

It will make up part of the European Hydrogen Backbone (EHB), a plan shaped by European operators and companies for the development of a European pipeline network hosting hydrogen. Their objective is to have developed a network covering a total distance of 40,000 kilometers by 2040.

 

West Macedonia gas pipeline development starting February

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Preparations leading to the construction of a new gas pipeline in northern Greece’s west Macedonia region, including licensing for land to host the project, are on the final stretch, and should enable the project’s development to commence by February, 2023.

According to gas grid operator DESFA’s ten-year development plan, the gas pipeline, which will connect the west Macedonia region with the country’s gas network, also represents part of the decarbonization strategy for the lignite-dependent region, as well as its fair transition into the post-lignite era.

The new pipeline is scheduled to begin operating in August, 2023 before being integrated into the grid a month later.

The project, budgeted at 147 million euros, is planned to be co-financed by DESFA capital as well as a portion of a 505-million bond loan agreement reached by the operator with the country’s four main banks, National Bank, Eurobank, Alpha Bank and Piraeus Bank, to finance its ten-year development program.

The pipeline is planned to cover a total distance of 156 kilometers, running from a point roughly two kilometers east of Trikala to an area north of Ptolemaida, close to Komnina in the Kozani region.

 

 

IGB gas pipeline nearing launch, doubts dismissed

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The prospective IGB gas pipeline linking Greece and Bulgaria is believed to be almost ready for its commercial launch, scheduled for October 1, despite recent doubts that were cast over the entire project.

Certain analysts recently questioned whether American LNG supply to Bulgaria, through the IGB pipeline, would go ahead, claiming the new Bulgarian government wants to renegotiate a supply agreement with Russia’s Gazprom.

ICGB AD, the consortium behind the IGB project has announced, in what is seen as a response to the scare, that an auction offering pipeline capacity to users will be held this Thursday through the online platform BALKAN GAS HUB EAD, from 9am to 12pm (Sofia time).

Greek construction company AVAX, developing the project, has set itself an end-of-August objective, which could be stretched to September 8, the latest, to complete pending work and obtain required permits from the Bulgarian authorities.

If all this goes according to plan, the IGB gas pipeline will be ready to operate on October 1.

Northern pipeline’s environmental permit paves way for development

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The energy ministry has approved environmental terms for gas grid operator DESFA’s natural gas pipeline project covering northern Greece’s west Macedonia region, a decision that paves the way for work to commence in autumn.

The project, budgeted at 110 million euros, promises to extend the national gas grid’s coverage, contribute to the country’s decarbonization plan and support the transition of the west Macedonian region, until now a lignite-dependent local economy.

The pipeline is planned to run from a location two kilometers east of Trikala to a point north of the provincial town Ptolemaida in the Kozani region, a 93.56-km distance.

The project, already fully certified to transport hydrogen, will offer a capacity of 388,000 Nm3/h.

The pipeline’s completion is scheduled for the first half of 2023.

 

 

 

Talks in progress for Italy’s East Med gas pipeline entry

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Talks are in progress for Italy’s official entry into the East Med gas pipeline project, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, energypress sources have informed.

Greece, Cyprus and Israel signed an agreement for the project’s development in 2020, without Italy’s participation, as the country’s government at the time, citing environmental issues, had reacted against the project reaching its shores.

Italy’s current Prime Minister, Mario Draghi, recently stressed that the East Med gas pipeline needs to be pursued as a result of Russia’s invasion of Ukraine.

The project has now gained political support in Italy, through a resolution issued in parliament urging the government to co-sign the transboundary agreement, energypress sources informed.

Italy has revised its stance on the East Med project as a result of a recent EU-27 decision to drastically reduce Europe’s reliance on Russian natural gas.

Italy could officially announce, in May, its intention to co-sign the East Med agreement, sources informed.

Egypt appears keen to accelerate plan for natural gas pipeline to Greece

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Egypt’s minister of petroleum and mineral sources Tarek El-Molla (photo, right) has underlined the potential of energy-sector collaboration between Cairo and Athens and the significance of an MoU signed by Egypt and Greece for joint development of energy infrastructure.

The Egyptian minister was speaking at the annual Egypt Petroleum Show, Egypts, before 2,000 attendants from 65 countries, among them top-ranked officials from multinational energy giants.

Agreements already signed between Egypt and Greece pave the way for the development of a subsea natural gas pipeline linking the two countries, El-Molla noted.

According to diplomatic sources, this special mention by the Egyptian minister highlights his country’s interest to push ahead with the natural gas pipeline project, which, on the one hand, would facilitate Egyptian natural gas exports to the EU and, on the other, help the continent further diversify its energy sources.

A further increase in activity between Athens and Cairo for an acceleration of procedures leading to the gas pipeline project’s development has not been ruled out by the diplomatic sources.

In addition, the potential of a subsea electricity grid interconnection between the two countries also seems to be gaining momentum, the diplomatic sources noted. Greek power grid operator IPTO and Egyptian counterpart EETC are collaborating on this latter project.

The current Russia-Ukraine problem once again highlights Europe’s need for further energy source diversification. Russia, through gas giant Gazprom, covers approximately one third of European natural gas consumption in the household and business sectors.

 

DESFA market test for North Macedonia gas pipeline link in March

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A DESFA gas grid operator market test for a gas pipeline project to link the Greek and North Macedonian systems is set to begin following the launch, by the Regulatory Authority for Energy (RAE), of a related public consultation procedure, ending February 7, the authority has announced.

The project’s market test will follow and is expected to be launched by March, the latest.

Towards the end of 2021, DESFA signed a 25 million-euro loan agreement with the European Investment Bank for the project’s Greek segment. This loan had been approved by the EIB more than a year earlier, in August, 2020.

At the time its approval was announced, EIB noted the project promises to further optimize Greece’s gas grid and also promote supply security and competition in the neighboring country through gas source and route diversification.

The project’s Greek segment, budgeted at 67 million euros, is planned to run from Nea Mesimvria, on the western outskirts of Thessaloniki, to the Evzoni area on the northern border.

Late in December, the EIB also approved a 28.9 million-euro loan agreement for the project’s North Macedonian segment. An agreement for this loan is expected to be signed within the next few weeks.

The EIB has also extended a 12.4 million-euro loan to North Macedonia from the Western Balkans Investment Framework (WBIF) for technical support and development of the project.

The gas pipeline, whose overall cost is estimated at 110 million euros, is planned to cover a total of 123 kilometers.

 

 

DESFA reaches FID for west Macedonia region gas pipeline

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Gas grid operator DESFA has reached a final investment decision for the development of a natural gas pipeline covering the country’s northern region of west Macedonia, paving the way for the project’s development in 2022 and  completion by the end of 2023.

The bulk of the project is expected to be ready sooner, by January, 2023, which will enable swifter natural gas distribution to many areas.

DESFA chief executive Maria Rita Galli, commenting on the gas pipeline project during a recent session of parliament’s standing committee on production and trade, informed that solutions are being sought for natural gas supply to areas even sooner, by October, 2022.

The gas pipeline project, measuring 157 km, will connect the west Macedonian region with the country’s natural gas grid. Its cost is budgeted at 147 million euros. Financing has already been assured from the grid operator’s own capital as well as a 505 million-euro loan agreement reached with the country’s four main banks, National Bank of Greece, Eurobank, Alpha Bank, and Piraeus Bank.

Galli, the chief executive, noted that an effort will be made to have the project inducted into the new National Strategic Reference Framework in order to minimize network usage costs.

DESFA forced to revise project budgets as metal prices rise

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Gas grid operator DESFA is being forced to reevaluate its budget for projects included in its existing ten-year development plan and set for inclusion in its forthcoming updated plan as a result of rising metal commodity prices in international markets, which have impacted the cost of gas pipelines and other equipment.

Metal price levels are projected to remain elevated in the foreseeable future. As a result, DESFA officials are striving for solutions that may prevent the transfer of increased project costs to consumers, and also subdue, to the greatest degree possible, additional project costs for the company.

DESFA is expected to deliver its updated ten-year development plan, covering 2022 to 2031, in September, according to sources.

The updated plan will not unveil any surprises in terms of the projects included, the sources added. A gas pipeline project linking the Epirus region in Greece’s northwest with the country’s grid is expected to be added to the DESFA list.

Two options for this project are being considered. One option entails the development of a pipeline from Ptolemaida, northern Greece, to Ioannina, in the northwest, and the other, the construction of a storage facility at the northwestern port of Igoumenitsa, from where a pipeline would run to Ioannina.

 

 

DESFA: NER North Macedonia pipeline agreement, market test next month

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Two further important steps in the lead-up to the construction of a natural gas pipeline linking the Greek and North Macedonian grids are expected to be made in September.

DESFA, Greece’s gas grid operator, and North Macedonia’s energy sources company NER are expected to sign an agreement next month as a follow-up to an agreement signed a month ago by the energy ministers of the two countries in Lagonisi, east of Athens.

The latest agreement will stipulate technical issues, as well as guarantees, concerning the new pipeline, paving the way for tenders concerning the project’s development.

In addition, also in September, DESFA and NER also plan to stage a market test that will determine the commercial feasibility of the project. The two sides want to ensure the existence of a sufficient number of buyers for gas quantities planned to be transported through the pipeline.

The Greek section of the gas pipeline, budgeted at 51.4 million euros, is planned to stretch 54 kilometers. The North Macedonian section will cover a 100-km distance.

A September 13 registration deadline has been set for a tender concerning the procurement of steel pipelines for the project. Also, a draft of the tender concerning the project’s construction has been forwarded for public consultation until August 16.

 

DESFA considering 2 options for gas transportation to Epirus

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Gas grid operator DESFA is examining two alternative solutions for the transportation of natural gas to Greece’s northwestern region of Epirus, one of the company’s most important projects of its ten-year development plan covering 2022 to 2031, still not finalized.

One option being considered by DESFA is an extension of a gas pipeline in west Macedonia, northern Greece, from Ptolemaida all the way to Ioannina, the Epirus prefecture’s capital.

The other solution being considered entails the development of an LNG terminal at Igoumenitsa port, from where a 50-km gas pipeline would be constructed into the Epirus region.

The options will undergo public consultation for comments and observations by market players before RAE, in conjunction with DESFA, decides which of the two will be implemented.

DESFA aims to finalize its ten-year development plan covering 2022 to 2031 within the summer before delivering it to RAE in September.