DESFA pipeline agreement with North Macedonia’s MER in July

Gas grid operator DESFA expects ongoing negotiations with North Macedonia’s energy sources company MER, for a cooperation agreement concerning the construction of a natural gas pipeline linking the two countries, will be successfully completed in July, enabling the staging of a market test for the project, whose Greek segment will run north from Thessaloniki’s Nea Mesimvria area.

DESFA plans to stage a market test for the pipeline in early autumn, assuming its cooperation agreement with MER is signed in July.

The cooperation agreement will commit both sides to the project’s construction, serving as a road map for its development and also specifying responsibilities to be taken on by DESFA and MER.

RAE, Greece’s Regulatory Authority for Energy, has set conditions, demanding a market test, and its successful outcome, in order to give the green light for construction of the Greek segment.

Apart from the cooperation agreement to be signed between DESFA and MER, the governments of Greece and North Macedonia plan to sign a corresponding bilateral agreement concerning the interconnection of the two countries through the project.

The details of this bilateral agreement are just about ready and have already been submitted to the European Commission for approval, Greek energy minister Kostas Skrekas told a recent conference.

Brussels’ approval is needed for North Macedonia to qualify for Western Balkans Investment Framework (WBIF) support funds for its segment of the gas pipeline.

The Greek segment, budgeted at 51.4 million euros, will cover a 57-km distance.

IGB gas pipeline launch delayed by 8 months for late-June, 2022

The commercial launch of the Greek-Bulgarian IGB gas pipeline has been deferred by 8 months, for June 30, 2022, as a result of pandemic-related obstacles faced during the project’s development.

The gas pipeline’s technical work is now expected to be completed by the end of this year, instead of April, 2021, as was originally scheduled.

Two months earlier, ICGB, the consortium developing the project, informed companies that have reserved pipeline capacities through a market test of the unavoidable delay in the commercial launch.

Contractor AVAX, the winning bidder for the project’s construction in an international tender staged by ICGB, began developing the pipeline in May, 2019, prior to the pandemic, whose emergence and impact forced the company to drastically reschedule the IGB project.

International quarantine rules have delayed the IGB project’s progress as many workers needing to regularly cross the Greek-Bulgarian border have been forced to quarantine, each time, for days.

The quarantining rules have also complicated the transfer of equipment needed from one country to the other.

The ICGB consortium is comprised of Bulgaria’s BEH, holding a 50 percent stake, and IGI Poseidon, a 50-50 partnership involving DEPA International Projects and Italy’s Edison.

The IGB gas pipeline, to cover a total length of 182 kilometers, will run from Komotini, northeastern Greece, to Stara Zagora in Bulgaria, offering a second interconnection between the two countries, in addition to the nearby Sidirokastro link.

The project is planned to begin operating at an annual capacity of 3 bcm, which could be boosted to 5 bcm at a latter date.

 

North Macedonia energy business opportunities for local players

Greek companies stand a great chance of gaining further presence in North Macedonia’s energy market through participation in projects and investments promising to contribute to the country’s diversification of energy sources and capture a bigger energy-mix share for green energy, the neighboring country’s Prime Minister Zoran Zaev made clear during comments in Athens yesterday.

North Macedonia appears determined to reduce its dependence on Russian fossil fuels and also cut back on carbon emissions, objectives offering investment opportunities for Greek energy groups, currently eyeing the neighboring market as part of plans to increase their business interests abroad.

The North Macedonian leader said yesterday that an agreement concerning the relaunch of Hellenic Petroleum ELPE’s Thessaloniki-Skopje oil pipeline is nearing finalization.

“The idea is to have reached an agreement with them by the end of May so that this important pipeline can begin operating,” Zaev remarked.

The oil pipeline’s reopening would be combined with the conversion of ELPE’s North Macedonian OKTA refinery into a petroleum products distribution hub covering the western Balkan region.

ELPE currently operates 27 petrol stations in North Macedonia through its OKTA subsidiary. Also active in Bulgaria, Serbia, Montenegro, the Greek petroleum group operates over 200 petrol stations in the wider region.

Zaev added that North Macedonia is involved in negotiations with a Greek company, presumed to be Mytilineos, for the development of a natural gas-fueled power station in the capital, Skopje. These talks, however, still appear to be at an early stage.

Also this week, Greek energy minister Kostas Skrekas told participants of the Delphi Economic Forum that a bilateral agreement for a Greek-North Macedonian gas pipeline interconnection is virtually ready and awaiting the approval of European authorities.

For North Macedonia, this gas pipeline project would end Russia’s monopoly in the country’s gas market, enabling more competitive gas prices and reinforced supply security, while for Greece, the gas pipeline’s development would represent a further step in the country’s objective to transform into a regional gas hub.

EastMed alliance broadens, eight countries express support

Support for the EastMed pipeline, planned to transport natural gas from offshore Levantine Basin gas reserves in the southeast Mediterranean to Greece and further into Europe, is growing in numbers with an initial Greek-Israeli-Cypriot alliance promoting this project now joined by five additional partners, Bulgaria, Romania, Hungary, Serbia and North Macedonia.

Energy ministers representing these eight countries forwarded a letter of support for the EastMed project to the European Commissioner for Energy Kadri Simson late last week, Greece’s energy and environment minister Kostas Skrekas has told local media.

The pipeline, to be developed by IGI Poseidon SA, a 50-50% joint venture between Greek gas utility DEPA and Italian gas utility Edison, is planned to cover a 1,470-km distance.

IGI Poseidon plans to develop EastMed all the way to Italy via Cyprus, Crete, the Peloponnese, mainland Greece and Epirus, the country’s northwestern flank.

This latest move, bringing the eight energy ministers together for the joint letter, was initiated by Skrekas, Greece’s energy minister, sources informed, following an initiative taken two months earlier by his Israeli counterpart Yuval Steinitz to organize a joint virtual conference involving ministers of all eight countries.

In their letter to Simson, the EU energy commissioner, the eight ministers highlight the importance of EastMed, noting the project promises to contribute to the wider region’s energy security and offer benefits to consumers as a result of increased competition and reduced natural gas price levels.

Regional gas interconnections, including the Greek-Bulgarian IGB, Bulgarian-Serbian IBS, Bulgarian-Romanian IBR and the Romanian-Hungarian IRH would be utilized to extend EastMed’s reach, the letter notes.

Greece and North Macedonia are currently planning a new gas pipeline interconnection whose Greek segment is being promoted by gas grid operator DESFA.

DESFA 2021-30 plan endorsed, west Macedonia, Patras pipelines included

Gas grid operator DESFA’s ten-year development plan for 2021 to 2030, featuring projects budgeted at over 500 million euros in total, including pipelines in the country’s west Macedonia and Patras regions, has been approved by RAE, the Regulatory Authority for Energy.

Speaking at the 2nd Power & Supply Forum, on online event staged earlier this week by energypress, DESFA’s chief executive Maria Rita Galli pointed out that this amount is double that of the previous plan and includes 54 projects through which the company will strive to contribute to strengthening Greece’s role as a regional energy hub.

The west Macedonia pipeline, a new entry to the ten-year plan, is budgeted at 110 million euros and planned to cover a 130 km distance in northern Greece.

Despite not being included in the national recovery plan for subsidy support, DESFA is prepared to develop this project with company reserves and loans.

Even if developed without subsidy support, the eventual cost of the west Macedonia pipeline for gas consumers will be spread out into limited amounts if gas demand in the region is high, as is anticipated.

Power utility PPC’s chief executive Giorgos Stassis, another energypress forum participant, informed that the company’s prospective Ptolemaida V lignite-fired power station will have converted to natural gas by 2025.

The conversion promises to boost the facility’s capacity, which will increase its consumption and add to the west Macedonia gas pipeline’s feasibility.

The gas pipeline planned for Patras, budgeted at 85 million euros, will cover a distance of approximately 140 km, from Megalopoli, in the central Peloponnese, to the western city’s industrial zone. Patras’ industrial sector is expected to ensure strong demand for natural gas.

The Patras project could, in the future, be extended to reach other cities on Greece’s west side, such as Pyrgos, western Peloponnese, and Agrinio, in the northwest.

 

Ministry seeks recovery fund aid for west Macedonia gas pipeline

Development of a high-pressure gas pipeline in west Macedonia, in the country’s north, which would enable the country’s gas grid to be extended to the area, is among the energy ministry’s proposals for EU recovery fund inclusion.

Though still too early to tell if this project will become eligible for financial support through this fund, it should be pointed out that the European Commission is generally hesitant about backing natural gas-related projects.

The project’s inclusion, or not, in a national recovery and resilience plan being prepared by a special energy-ministry committee, currently filtering proposals by this ministry and other ministries, stands as a crucial test that could determine whether the west Macedonia gas pipeline project will become eligible for EU recovery fund support.

A national plan’s finalized list is expected within the next few days before it is forwarded, by early April, to the European Commission, whose approval will be needed.

The energy ministry is also seeking 300 million euros through the recovery fund for the redevelopment of the power utility PPC’s mining areas in west Macedonia, a lignite-dependent economy.

Regardless of whether the west Macedonia high-pressure gas pipeline plan will qualify for EU recovery fund support, gas grid operator DESFA appears determined to move ahead with the project, budgeted at 110 million euros and constituting part of the country’s decarbonization strategy.

The new National Strategic Reference Framework (NSRF) could serve as an alternative financing source, while DESFA will also consider company cash reserves and a bank loan if necessary.

 

DESFA to push ahead with west Macedonia gas pipeline

Gas grid operator DESFA is determined to push ahead with the development of a natural gas pipeline in northern Greece’s west Macedonia region, a project budgeted at 110 million euros, either with financial support from the EU’s current National Strategic Reference Framework or other financing solutions, including bank loans, if the project is ultimately excluded from EU recovery fund support.

Though a finalized decision on the list of projects to receive EU recovery fund support has not been reached, DESFA, according to energypress sources, will proceed with this pipeline project, part of the operator’s ten-year development plan for 2021 to 2030, totaling 545.5 million euros.

In examining its financing options for this gas pipeline project, DESFA will take decisions based on containing network usage fees to be paid by consumers.

The European Commission and European Investment Bank (EIB) no longer finance conventional gas-based infrastructure projects, unless eco-friendly hydrogen is incorporated into their plans. Even so, the west Macedonia gas pipeline has been included in the recovery fund catalogue as the project is linked to the post-lignite era.

Possessing a clearly developmental role with multiple benefits for the wider region, the pipeline represents part of the energy transition plan for west Macedonia, a lignite-dependent local economy, as it will help replace lignite-based energy, contribute to growth, and support the region’s industry.

The pipeline, to stretch 130 km, could be swiftly licensed, DESFA officials believe, as long as its financing plan is settled and municipal and regional authorities acknowledge the region’s gas penetration need. The pipeline’s delivery was forecast for within 2023 before questions concerning the project’s financing emerged.

DESFA focusing on gas pipeline for west Macedonia network

Gas grid operator DESFA and energy ministry officials are currently discussing financing options that could be sought for the operator’s plan to develop a gas pipeline needed to facilitate a gas network expansion in northern Greece’s west Macedonia region, energypress sources have informed.

DESFA is awaiting approval by RAE, the Regulatory Authority for Energy, for its ten-year development plan, worth more than 545 million euros, including the gas pipeline project.

The talks between DESFA and the energy ministry officials are focused on public funding possibilities, primarily European, to cover part of the cost of the gas pipeline, which would ultimately help contain the level of network usage tariffs to be covered by consumers.

Local officials anticipate this network expansion plan should qualify for EU development fund support, even though EU policy generally does not favor gas projects, as it clearly represents a development project that promises multiple regional benefits, including replacement of lignite-based energy, on the way out as a result of the country’s decarbonization strategy.

Besides the EU recovery fund, officials in Greece are also considering the prospects of financial support from the EU’s National Strategic Reference Framework or a number of regional development programs.

The gas network expansion plan in the country’s west Macedonia region will require the development of a 130-km gas pipeline from Trikala, in the mainland’s mid-north, a project budgeted at 110 million euros.

According to sources, DESFA has revised an original pipeline route plan, bringing the pipeline closer to cities where medium and low-pressure networks for households and businesses are to be developed by gas distributor DEDA.

North Macedonia pipeline market test by September

Gas grid operator DESFA has begun preparations with the energy ministry to stage a market test by September for the Greek segment of a gas pipeline interconnector to run to North Macedonia.

RAE, the Regulatory Authority for Energy, requested a market test, to ensure sufficient capacity reservation by users, for the project when it endorsed DESFA’s development plan covering 2017 to 2026.

North Macedonian authorities are also working on preparations for the project’s development. Just days ago, the country’s transport and communications minister Blagoj Bocvarski noted that all will be ready by the end of 2021 for the announcement of a tender concerning the construction of the project’s North Macedonian segment.

All licensing requirements will have been resolved earlier, by the middle of this year, Bocvarski added.

DESFA and its North Macedonian counterpart MER signed a Memorandum of Understanding in October, 2016 for the pipeline project.

Its Greek segment, budgeted at 51.4 million euros, will cover a 57-km distance, beginning from Thessaloniki’s Nea Mesimvria area.

The pipeline will be linked to Greece’s prospective Alexandroupoli FSRU in the northeast. North Macedonia currently fully depends on Russian gas supply through a Balkan pipeline.

Bulgaria gas pipeline explosion highlights need for local projects

Yesterday’s Bulgarian gas pipeline explosion in Bulgaria, prompting a supply cut into Greece from a northern route, yet again highlights how vital it is for Greece to develop two gas infrastructure project plans in Alexandroupoli, northeastern Greece, and Kavala, in the north.

The explosion of this pipeline, carrying Russian gas into Greece via Bulgaria, has not affected Greece’s energy security as supply from the alternate Kipoi route remains uninterrupted, while the contribution of high LNG reserves at the Revythoussa terminal, just off Athens, has also been crucially important.

However, a Greek energy crisis could have resulted if this accident were more serious, or if the Revythoussa facility did not exist, or, worse still, the accident coincided with even greater Greek-Turkish tensions than at present, which could have meant a cut in gas supply from Turkey, hosting one of Greece’s key gas import corridors.

The intensifying geopolitical instability of the wider region, which includes Turkey, an extremely troubling neighbor, makes imperative the existence of sufficient gas storage facilities to safeguard Greece’s energy security. Despite the precarious conditions in the region, Greece remains one of the European countries without sufficient energy storage infrastructure.

In addition to the existing Revythoussa LNG terminal, Greece’s infrastructure definitely needs to be reinforced by projects such as the Alexandroupoli FSRU and an underground gas storage facility at a virtually depleted offshore deposit south of Kavala.

 

Long-standing DESFA northern Greece pipeline plan scrapped

Gas grid operator DESFA has scrapped plans for a natural gas pipeline that had been envisioned to run across northern Greece, from Komotini in the northeast to Thesprotia in the northwest, after maintaining the project in the company’s business plans for about a decade.

DESFA reached this decision as Russian President Vladimir Putin is supporting Gazprom’s development of a second branch for the wider Turkish Stream gas project, deviating Ukraine, to supply the Balkans and central Europe via Bulgaria, not Greece, as was initially considered.

A first Turkish Stream branch supplying Russian gas to Turkey is already operating.

“The project remained on the business plan for approximately ten years without progressing to the construction stage, while there is no sign of conditions leading to its construction in the immediate future,” DESFA announced.

The Komotini-Thesprotia pipeline project was budgeted at 1.8 billion euros.

The total cost of projects included in DEFSA’s development plan for 2021-2030 is now budgeted at 545.5 million euros.

DESFA considering west Macedonia pipeline expansion

Gas grid operator DESFA’s next ten-year development plan, for 2021 to 2030, may include gas network extension projects in areas that have not featured in previous plans, including northern Greece’s west Macedonia region.

The shape and extent of the pipeline network expansion plan will depend on the development, or not, of regional natural gas-fired power stations by electricity producers.

Preliminary considerations for DESFA’s new ten-year development plan come just weeks after a delayed approval by authorities of the operator’s ten-year plan covering 2020 to 2029.

A prospective decision by power grid operator PPC on whether its Ptolemaida V power station will operate as a natural gas-fired unit will be instrumental in shaping DESFA’s investment decisions for pipeline network expansions in the west Macedonia area.

DESFA also intends to develop metering stations at TAP project corridor points as the capacity to be offered by the TAP project will not suffice to cover regional needs if natural gas-fired power stations are developed in the west Macedonia region.

DESFA plans to construct three new metering and regulating stations in the Eordea, Kastoria and Aspros (Edessa, Naoussa, Giannitsa) areas, their budget totaling 8 million euros. These stations, whose completion is expected by the end of 2022, will enable the development of a mid and low-voltage network for natural gas transmission to these areas.

 

DEPA International Projects, EDEY, the hydrocarbon company, to merge

An amendment permitting a prospective merger between DEPA International Projects – a new entity resulting from a split at gas utility DEPA – and EDEY, the Greek Hydrocarbon Management Company, is now being prepared at the energy ministry, energypress sources have informed.

A number of DEPA-related projects have been added to the DEPA International Projects portfolio, including the Greek-Italian IGI interconnection, EastMed and the Greek-Bulgarian IGB pipeline interconnection.

In addition, any future DEPA-related projects – directly or indirectly – concerning development, construction or management of interconnection infrastructure linking Greece with neighboring countries will also be added to the DEPA International Projects portfolio.

EDEY, the hydrocarbon project licensing authority in Greece, has assets of approximately 12.5 million euros. The company reported a post-tax profit of 4.3 million euros in 2019.

EDEY’s range of activities will be broadened as a result of the company’s merger with DEPA International Projects.

Special categorization for the new company that would exempt personnel remuneration packages and hiring policies from strict state monitoring is likely, sources noted.

The merger plan’s legal details could be attached to an energy ministry draft bill on environmental matters that is expected to be submitted to parliament following the Greek Easter break.

 

Alexandroupoli FSRU market test offers total 2.6 bcm, viability assured

Binding capacity reservations for the prospective Alexandroupoli FSRU in northeastern Greece, whose second-round market test expired on Tuesday afternoon, amounted to 2.6 bcm, a tally that secures the project’s sustainability and paves the way for a finalized investment decision, energypress sources have informed.

Two Greek utilities, gas company DEPA and power company PPC, are among the participants who have reserved capacities, for long-term periods, the sources noted.

Bulgaria’s Bulgartransgaz and a Serbian company also confirmed earlier requests for capacity reservations.

Romania’s Romgaz did not turn up for the market test’s second round after expressing interest for a considerable capacity covering a lengthy period in the first round. Instead, two private-sector Romanian trading companies ended up submitting binding offers for Alexandroupoli FSRU capacities.

The Bulgarian, Serbian and Romanian interest highlights the potential of the Alexandroupoli FSRU to serve as a new natural gas gateway for southeast European markets, via the Greek-Bulgarian IGB pipeline, now under construction, as well as other existing and planned gas pipelines in the region.

Alexandroupoli FSRU project sustainable, reservations show

A second-round market test offering capacity reservations for the prospective Alexandroupoli FSRU in northeastern Greece has drawn enough interest to ensure the project’s sustainability ahead of a final business decision, energypress sources have informed.

The deadline for this market test, a binding procedure, expires today following a ten-day extension granted in order to give Romania’s Romgaz more time to confirm the duration and quantity of its offer.

Romania has entered a period of political crisis after interim prime minister Ludovic Orban’s Liberal Party government was toppled in a no-confidence vote called by the main opposition last month. The coronavirus crisis has worsened the situation. Orban and his entire Cabinet have quarantined themselves after coming into contact with a senator who was later confirmed to have the coronavirus.

Greek gas utility DEPA and power utility PPC have reserved Alexandroupoli FSRU capacities for lengthy periods, the sources added.

Bulgaria’s Bulgartransgaz and a Serbian company are also believed to have confirmed earlier requests for capacity reservations.

The Bulgarian, Serbian and Romanian interest highlights the potential of the Alexandroupoli FSRU to serve as a new natural gas gateway for southeast European markets, via the Greek-Bulgarian IGB pipeline, now under construction, as well as other existing and planned gas pipelines in the region.

DESFA wants key role in country’s infrastructure projects

Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

DESFA set for Greece-North Macedonia pipeline market test

Gas grid operator DESFA is preparing to launch a required market test for the development of a Greek-North Macedonian gas pipeline interconnection running from Nea Mesimvria, on Thessaloniki’s western outskirts, to Gevgelija, in the neighboring country’s southeast.

RAE, the Regulatory Authority for Energy, expected to soon be informed by the operator, will need to approve the terms of this preliminary procedure.

Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev, which, in the past, has expressed interest for a rival project, has yet to emerge with any new action.

An alternative project from Windows International Hellas would be developed as an independent gas system, whereas the DESFA proposal is planned to be incorporated into the national gas grid.

RAE approved both project plans at the beginning of this year following two years of processing and consideration.

However, DESFA was asked to conduct a market test as the cost of the project, if developed by the operator, would, as a national grid project, be passed on to users.

The project, budgeted at 48.7 million euros and planned to stretch 120 km for a 3 bcm capacity, is seen as a source-diversifying initiative.

 

Balkans-focused energy forum on eve of Thessaloniki fair

Two key regional gas pipeline projects involving Greece and backed by the US, the Greek-Bulgarian IGB gas grid interconnection and a pipeline to link Greece and North Macedonia, will be at the center of attention in talks between energy minister Costis Hatzidakis and peers at the Southeast Europe Energy Forum in Thessaloniki on September 6, a day ahead of the opening of this year’s Thessaloniki International Fair.

Hatzidakis and the US Ambassador to Greece, Geoffrey R. Pyatt, will be key speakers at the forum, where speeches will also be delivered by the energy ministers of Bulgaria, Cyprus, Israel, North Macedonia, Romania and Serbia.

Besides the prospective gas pipeline from Greece to North Macedonia, the talks between Hatzidakis and his North Macedonian peer will also focus on an upgrade of the electricity grid interconnection linking the systems of the two countries, as well as an upcoming relaunch of the Okta oil pipeline, stretching from an ELPE (Hellenic Petroleum) facility in Thessaloniki to the company’s Okta refinery and storage facility in North Macedonia.

The gas pipeline is the most important project of the three as an interconnection of the Greek and North Macedonian gas systems does not exist.

The Greek-Bulgarian IGB gas interconnection, along with TAP, to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to central Europe via Italy, are Greece’s two most significant international energy projects.

They promise to further diversify Europe’s energy sources and weaken Russia’s dominance in the region.

Meanwhile, Russia is promoting its own energy and geopolitical interests in the region. Last month, Greece was excluded from Turkish Stream, a Russian-Turkish gas pipeline plan whose second segment is now planned to run through Bulgaria, not Greece.

The first segment of this gas pipeline project is planned to supply Russian natural gas to the Turkish market and the second to Europe’s south and southeast.

 

Greek, Cypriot, Israeli officials seeking Italy’s East Med return

Greek, Cypriot and Israeli officials are working on details of a plan aiming to win back Rome’s support for the East Med pipeline, an ambitious 1,900-km pipeline to carry southeast Mediterranean natural gas from Israel to Europe via  Italy.

Efforts by Washington and Brussels to lure back Italy, whose coalition government has withdrawn the country’s support for the project, are pivotal.

Part of the overall diplomatic effort may be unveiled at an Athens energy summit today.

The Greek, Cypriot and Israeli energy ministers, Costis Hatzidakis, Giorgos Lakkotrypis and Yuval Steinitz, respectively, as well as US Assistant Secretary Francis Fannon, are taking part in the summit.

Fannon held successive meetings in Athens yesterday with Greece’s energy minister and the deputy foreign minister Konstantinos Fragogiannis. The East Med project’s promotion was a key subject of these meetings, especially Fannon’s talks with Hatzidakis, Greece’s energy minister.

Last May, Italian Prime Minister Giuseppe Conte, heading Italy’s right-wing populist coalition, declared Rome does not want the East Med pipeline to land on Italian territory. Instead, he proposed the pipeline’s link to TAP, another gas pipeline project being developed to carry Azerbaijani natural gas to Europe, via Italy.

East Med is envisioned to primarily carry deposits from Cyprus’ recently discovered “Aphrodite” gas field and the Israeli-controlled block “Leviathan” along a route stretching from Israel to Europe, also via Italy.

In response to Italy’s stance, Israel now appears to favor an alternate route for East Med that would avoid ending up on the Italian coast. Experts regard this prospect as difficult but not impossible as the pipeline project is still at the planning stage. Greece and Cyprus prefer Italy’s incorporation into the pipeline route.

 

 

New investments worth €132.2m included in DESFA 10-year plan

New investments worth 132.2 million euros have been included in gas grid operator DESFA’s updated ten-year development plan covering 2017 to 2026, which was approved by RAE, the Regulatory Authority for Energy, in February but has only just been released. The plan was forwarded for consultation by RAE back in October, 2017.

RAE’s approval was delayed by a number of projects, including a gas pipeline plan to link Greece and North Macedonia, as a result of a rival project proposal supported by Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev.

RAE needed to decide on whether to endorse the DESFA or Windows International Hellas investment plan for this pipeline project. The authority ended up approving both. Windows International Hellas and DESFA will now need to contest the project’s contract.

A plan for a small-scale dock envisioned for the Revythoussa LNG terminal on an islet close to Athens, to service small vessels with LNG capacities of 1,000 to 20,000 cubic meters, has been deferred for inclusion into the 10-year program at a latter stage. RAE has requested a full plan from DESFA for this project’s development.

 

DESFA, Windows International to battle for northern pipeline

Respective applications submitted by Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev, and Greece’s gas grid operator DESFA for the development of a gas pipeline interconnection running from Greece’s north into North Macedonia have both been approved by RAE, the Regulatory Authority for Energy, viewing  the proposals as rival initiatives.

Windows International Hellas and DESFA will now need do to battle for the project’s contract.

RAE had approved the Windows International Hellas application in December, but the news was not disclosed until now, according to sources.

DESFA has been granted conditional approval for its ten-year development plan covering 2017 to 2026, which includes the gas pipeline interconnection, a project budgeted at 48.7 million euros. Full approval remains pending and depends on the results of a required market test.

Windows International Hellas intends to develop the pipeline as an independent natural gas system, which would not burden users, whereas DESFA wants to develop the project as part of the national natural gas system, which explains why RAE has called for a market test. The test will determine if sufficient demand exists to avoid burdening users.

Windows International Hellas wants to utilize the pipeline for coverage of North Macedonia’s domestic needs. The Lebedev-led firm plans to construct a gas-fueled power station, it has been rumored.

DESFA is aiming to connect with networks in other Balkan countries through the prospective gas pipeline.

It is planned to run from Nea Mesimvria in Thessaloniki to Gevgelija in North Macedonia.

 

DESFA, Snam also considering Greek-Italian pipeline crossing

Greek gas grid operator DESFA and Italy’s Snam, heading an all-European gas operator consortium set to acquire a 66 percent stake of the former, are conducting preliminary research to determine whether an interconnection project linking the Greek and Italian grids would represent a viable plan.

Russia’s Gazprom is seeking to establish a Greek-Italian route for Russian natural gas supply to the EU. The plan being considered by DESFA and Snam essentially constitutes an extension of the Turkish Stream, a gas pipeline project being developed by Russia and Turkey.

The project considered by DESFA and Snam would utilize an existing pipeline running from Kipoi, Evros, on Greece’s northeastern tip, by the border between Greece and Turkey, to Komotini, slightly westward. In addition, a new 613-km section would be constructed from Komotini to coastal Florovouni, Thesprotia, in northwestern Greece, along with a submarine pipeline crossing to Italy.

In another preceding action, Greek gas utility DEPA and Italian energy company Edison have already taken licensing initiatives and are seeking national and EU approval for a corresponding project through their ITGI Poseidon partnership. Gazprom support would be needed.

The DEPA-Edison plan is seen as a purely commercial venture whereas the DESFA-Snam alternative is regarded as a bilateral project that would link the national gas grids of Greece and Italy.

 

DESFA, MER resume talks for Greece-Fyrom pipeline link

Greek gas grid operator DESFA and Fyrom (Former Yugoslav Republic of Macedonia) state-run energy company MER Skopje have resumed talks for the development of a pipeline interconnection intended to link the gas grids of the neighboring countries.

Highly ranked MER Skopje officials have been in Athens over the past week for talks with DEFSA officials focused on technical and financial aspects, energypress sources have informed.

DESFA and MER Skopje signed a Memorandum of Cooperation in 2016 for the project, but progress was slow before eventually stalling.

Less than a fortnight ago, MER Skopje and Albagaz signed a Memorandum of Understanding to promote a gas grid interconnection plan linking Fyrom and Albania, at a ceremony in Tirana that was attended by ministers of both countries.

Greek licensing procedure delays have been cited as a key reason behind the country’s lack of action in the Greece-Fyrom pipeline interconnection project.

The matter has been further complicated by an initiative taken last year by Russian entrepreneur Leonid Lebedev’s Windows International Hellas for a license to construct a natural gas pipeline from Thessaloniki to Fyrom.

RAE, Greece’s Regulatory Authority for Energy, has yet to deliver licensing decisions on either project.

Skopje is continuing to support the DESFA-MER Skopje project despite the recent MoU signed by MER and Albagaz, according to sources.

Fyrom turns to Albania for gas supply amid Greek delays

The Former Yugoslav Republic of Macedonia (Fyrom) has turned to Albania to cover its natural gas needs as a result of Greece’s failure to deliver on an agreement reached between the country’s gas grid operator DESFA and MER Skopje two years ago for the development of a pipeline interconnection linking the gas grids of the neighboring countries.

Local licensing procedure delays have been cited as a key reason behind Greece’s lack of action. RAE, Greece’s Regulatory Authority for Energy, has yet to offer its approval for the project. Also, the matter has been further complicated by an initiative from Russian entrepreneur Leonid Lebedev’s Windows International Hellas for a license to construct a natural gas pipeline from Thessaloniki to Fyrom.

Last week, Albagaz and MER Skopje signed a Memorandum of Understanding, intended to promote a gas grid interconnection plan linking Fyrom and Albania, at a ceremony in Tirana that was attended by ministers of both countries.

The bilateral pipeline plan entails branching off gas quantities from the TAP line – running through Albania and northern Greece – into the Fyrom market. Though a Fyrom-Albania investment plan is still a long way off, both sides have agreed to seek financing through EU funds.

Pundits and investors in Greece have warned that the country now stands a big chance of missing out on a major opportunity to supply gas to the Fyrom market.

Supreme Court rejects TAP block in Kavala, clearing way for completion

The Greek segment of the TAP natural gas pipeline appears to have cleared one last hurdle obstructing its development following the rejection by the Council of State, Greece’s Supreme Administrative Court, of a case filed by the municipality of Kavala, northern Greece, and other local authorities seeking a revision of the project’s route in the Kavala area.

The disputed Kavala segment concerns a 10-kilometer stretch, from the pipeline’s 195th kilometer to the 205th kilometer. Construction work at this stretch was scheduled to begin in autumn, 2016 but has been delayed as a result of the local reaction.

Highlighting the pipeline’s problem in the Kavala area, construction work has progressed, or even been completed, at all other segments.

The TAP project is planned to run through northern Greece, Albania and across the Adriatic Sea to Italy.

The energy ministry, local government officials and the TAP consortium recently signed an agreement for the construction of a water supply pipe system to handle water-shortage problems that have affected the Kavala area over many years. This project is budgeted at nearly 20 million euros.

The TAP consortium is set to receive a 1.2 billion-euro loan from the EBRD following a positive appraisal of the project by the bank, it was revealed yesterday. This loan’s extension is expected to be confirmed at an EBRD meeting on July 4.

 

 

Snam, DESFA weighing their regional pipeline options

Italy’s Snam and DESFA, Greece’s natural gas grid operator, are examining their options for transportation of gas from the Greek-Turkish border to Italy’s Salento peninsula in the southeast.

Currently staging a public consultation process to gather observations and proposals – it expires on December 18 – Snam and DESFA, brought closer by an ongoing international tender offering 66 percent of DESFA in which Snam is participating, are looking at developing a plan that would enable them to use both TAP and the IGI Poseidon so as to transport both Azerbaijani and Russian gas to Europe via Turkey, Greece and Italy.

The TAP pipeline, now under construction, is designed to transport gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing Greece, Albania and the Adriatic Sea, before coming ashore in Southern Italy. The IGI Poseidon, a plan by Gazprom, Edison and DEPA (Public Gas Corporation) is intended to transport natural gas from the Caspian and Russia towards Europe.

Snam and DESFA are also examining the construction of a new gas pipeline should the aforementioned combination not work.

This other gas pipeline would include include compressor stations in Evros and Komotini in Greece’s northeast, a 613-km submarine crossing from Greece to Italy, aand interconnection with the existing network on Italy’s mainland. The project’s budget has been estimated between 2.5 and 4 billion euros.

Snam is part of a consortium also including Spain’s Enagas, Belgium’s Fluxys and Dutch operator Gasunie that has submitted a bid for a 66 percent stake in DESFA, offered through a renewed tender.

Snam, which holds a 20 percent stake in the TAP (Trans Adriatic Pipeline), appears to be eyeing the wider region, not just the local market. The Italian company seems to believe in the promise offered by the southeast European market, until recently not a key part of plans set by major European corporations.

A recent article published by Italian newspaper Nuovo Quotidiano di Puglia explained that between three and four different pipelines could reach the Salento peninsula within the next two to three years and, from there, serve the entire continent. This is an important part of Snam’s planning.

The approval of an EU term permitting cross-boundary gas transportation has encouraged the Italian firm to further develop its plans.

TAP pipe deliveries complete to Greece, Albania and Italy

The last shipment of steel line-pipes for the construction of the Trans Adriatic Pipeline (TAP) arrived in Thessaloniki, marking the completion and final delivery of all line-pipes to TAP’s host countries, the TAP consortium announced in a statement released today.   

The transport of 55,000 TAP pipes and bends was completed in approximately one year and a half. The first pipes arrived in Durres, Albania in April last year and deliveries to Greece started one month later.

Approximately 55,000 pipes are being used to build TAP (32,000 in Greece; 13,000 in Albania; 9,150 offshore and 670 in Italy).

The weight of all pipes amounts to 520,000 tonnes: or approximately 71 Eiffel towers. The weight of a single 18-metre pipe ranges from 9.3 tonnes to 16.3 tonnes, depending on the wall thickness.

The pipes were transported to TAP’s main marshalling yards in 79 sea vessel shipments of various sizes and 158 block trains within Greece. The offloading of the largest ships took five days on average.

The pipes were manufactured by Corinth Pipeworks (Greece) and Salzgitter Mannesmann International (Germany).

John Haynes, TAP Project Director, noted: “This is yet another key milestone towards successful realisation of the project. The entire logistics delivery process was carried out in line with the project schedule and to the highest safety standards. Considering that each pipe has been lifted approximately seven times from production at the mills until reaching our main marshalling yards, we are proud that this massive operation has been completed without any safety incidents within our host countries. I would like to thank our contractors and sub-contractors responsible for shipping, offloading and transporting TAP pipes for their professionalism, hard work and commitment to safety.”

From the main marshalling yards, the pipes are transported further to the local pipe yards near the construction sites, along the pipeline route.

TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The 878km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

TAP’s routing can facilitate gas supply to several South Eastern European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others. TAP’s landfall in Italy provides multiple opportunities for further transport of Caspian natural gas to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria.

The TAP project promises to promote economic development and job creation along the pipeline route; it will be a major source of foreign direct investment and it is not dependent on grants or subsidies.

With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow in 2020.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Snam S.p.A. (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

 

TAP announces new Greece Country Manager, joining from BP

Trans Adriatic Pipeline AG (TAP) has appointed Katerina Papalexandri as its new Greece Country Manager as of September 1, the consortium announced in a statement released today. Papalexandri will replace Rikard Scoufias, the current Country Manager.

Papalexandri brings almost 20 years of experience in the energy industry with her expertise being in gas markets and projects, commercial negotiations and stakeholder management. She joins TAP from BP in London, where, since 1998, she has held numerous senior positions throughout her career.

From 2006 to 2012, Papalexandri worked for BP based in Athens as Senior Market Advisor for Gas Europe & Africa, as well as Business Developer for Caspian Gas. She also has extensive experience of the Southern Gas Corridor value chain, working as Transportation Manager for Caspian Gas and as Strategic Risk Manager for the Southern Corridor.

Most recently, in November 2015, Papalexandri took up the position as Senior Commercial Manager for the Southern Corridor, where, amongst her responsibilities, she managed the commercial aspects of the whole gas value chain.

“I’m very pleased that Katerina has joined us as our new Country Office Manager in Greece. As Greece’s largest direct foreign investment, the construction of the Trans Adriatic Pipeline will be a major contribution to supporting Greece in becoming a key hub in the energy map of southeastern Europe,” commented Luca Schieppati, Managing Director at TAP.As a project of such strategic importance for Greece, we are now entering the final phase as TAP prepares for commercial and operational readiness in order to receive first gas. I am confident that Katerina’s many years of experience and deep expertise and knowledge of the energy industry, of Greece and of the Southern Gas Corridor will be instrumental in successfully and safely delivering our project in Greece.”

TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The 878-km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.

TAP’s routing can facilitate gas supply to several southeast European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others. TAP’s landfall in Italy provides multiple opportunities for further transport of Caspian natural gas to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria.

TAP has promised to promote economic development and job creation along the pipeline route. A major source of foreign direct investment, the project is not dependent on grants or subsidies.

With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow in 2020.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Snam S.p.A. (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

TAP consortium announces new management team

Trans Adriatic Pipeline AG (TAP) announced today the appointment of Luca Schieppati as Managing Director and Walter Peeraer as President. Both officials assume their respective posts as of today.

Schieppati, who is replacing the current Managing Director Ian Bradshaw, joins TAP from Snam, Europe’s largest natural gas utility, where he has worked since 1991. His most recent position was chief industrial assets officer of Snam as well as managing director at Snam Rete Gas S.p.A, the Group’s subsidiary managing 32,500-kilometre natural gas pipeline network in Italy.

Schieppati brings 26 years of experience in the development and management of pipelines, plant construction, and the operation and maintenance of gas transmission and distribution companies in Italy and Europe.

Peeraer joins TAP as the former Managing Director and Board Member of Fluxys S.A, the Belgian-based European gas transmission assets management company. Within Fluxys, Peeraer also held various senior positions including Chief Executive Officer of Fluxys Belgium.

Having left Fluxys in 2016, Peeraer brings more than 30 years of experience in the European utilities and gas sector and has extensive knowledge of European gas markets, regulations and infrastructure. He is also a former TAP Board Member.

Joe Murphy, Chairman of TAP’s Board of Directors, commented: “I’m very pleased to have Luca and Walter leading TAP at this critical phase. With construction continuing across all three countries, the project is entering an important new phase and I’m confident that their many years of experience and deep expertise will be essential in safely and successfully delivering this project for the European gas customers.”

“I would also like to take this opportunity on behalf of the entire TAP Board to thank Ian for his leadership and stewardship of the project over the past years. We recognize all the hard work and accomplishments of Ian and his team, which have brought us to this next phase in realizing TAP.”

TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The 878-km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) at the Turkish-Greek border at Kipoi, cross northern Greece and Albania and the Adriatic Sea, before coming ashore in southern Italy.

TAP’s routing can facilitate gas supply to several southeast European countries, including Bulgaria, Albania, Bosnia and Herzegovina, Montenegro, Croatia and others.

TAP’s landfall in Italy provides multiple opportunities for further transport of Caspian natural gas to some of the largest European markets such as Germany, France, the UK, Switzerland and Austria.

TAP intends to promote economic development and job creation along the pipeline route; it will be a major source of foreign direct investment and it is not dependent on grants or subsidies. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow in 2020.

TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Snam S.p.A. (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

 

 

 

DEPA, Gazprom, Edison agree on Russian supply to Europe

The head officials of Gazprom, Edison and DEPA, Greece’s public gas corporation, today signeda cooperation agreement envisaging joint efforts aimed at establishing a southern route for Russian gas supplies from Russia to Europe, the three companies announced in a statement.

The document was signed by Alexey Miller, Chairman of the Management Committee of Gazprom, Marc Benayoun, CEO of Edisonand Executive Vice President of EDF forGas and Italy,and Theodoros Kitsakos, CEO of DEPAand Chairman of IGI Poseidon, at the St. Petersburg International Economic Forum 2017 in the presence ofCarlo Calenda, Minister of Economic Development of Italy.

George Tsipras, Secretary General for International Economic Relations at Greece’s Ministry for Foreign Affairs also attended the signing ceremony.

The document envisages joint efforts aimed at establishing a southern route for Russian gas supplies from Russia to Europe, which will run across Turkey and Greece to Italy. The three companies will coordinatethe development andimplementation of the TurkStream projectandof thePoseidon projectfrom the Turkish/Greek border to Italy, in full compliance withrelevantapplicablelegislative framework.In addition, the agreement formalizes the arrangements on expanding cooperation in the field of Russian gas deliveries.

In February, 2016, Gazprom, Edison, and DEPA had signed the Memorandum of Understanding on natural gas deliveries from Russia across the Black Sea and third countries to Greece and from Greece to Italy in order to set up a southern route for Russian gas supplies to Europe.

DEPA, possessing a long presence in Greece’s gas market, constitutes a modern and competitive group of companies with a dynamic presence in the energy sector. It promotes strategic infrastructure in order to supply natural gas at competitive prices from diversified sources and routes with a view to assuming a leading role in the markets of the broader southeast European region.

Edison is a leading Italian and European player in the procurement, production and sale of electricity, provision of energy and environmental services and the E&P sector.

Founded over 130 years ago, Edison has contributed to the country’s electrification and development. Today it operates in Italy, across Europe and in the Mediterranean basin, employing 5,000 people. In the power generation sector, Edison has plants with total capacity of 6.5 GW.

The Poseidon pipeline is an import gas project designed and authorized to connect the Greek and Italian gas systems. The project will be further extended for allowing direct transportation into Italy of gas sources available at the Turkish/Greek borders, substantially contributing to the European energy targets on security of supply.