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.

Trump’s stance could reshape Europe’s foreign and energy policies

The election of Donald Trump to the US presidency may bring about changes to Europe’s energy and foreign policies if the new American leader insists on pursuing a path leading to isolationism and warmer ties with Russia.

As for the Russian part of the equation, speculation of Trump’s close personal and business associations with the Kremlin has become widely known. The disclosure of Russia’s alleged intervention in the US elections, the objective being to push Trump to power, has stunned the political landscape worldwide.

If these developments are transformed into foreign policy then major shifts in balances of power can be expected in regions such as Eastern Europe, the Middle East and central Asia.

Trump’s ongoing disparagement of NATO is not an encouraging sign for countries of the former eastern bloc. They view Russia with hesitancy and need allies, Ukraine being an obvious example.

A change of energy market roles for Russia and Ukraine would severely impact Europe’s energy policy. For many years now, Ukraine’s extensive pipeline network has been used by Russia to transmit its natural gas to Europe. However, as a result of troubled relations between Moscow and Kiev, the Kremlin has sought strategic independence from Ukraine over the past decade or so. Russia has been promoting the development of new gas supply lines to Europe such as Nord Stream 1 and 2, South Stream and Turkish Stream, all of which bypass Ukraine.

Russian wants to establish itself as a gas supplier to Europe via a seamless network, which would enable the country to increase its supply and control both networks and the market.

The European Commission claims it wants reduce its Russian energy dependence, despite the fact that consumption has increased, as highlighted by market data for 2016.

Brussels essentially does not want Russia to develop new pipelines as it fears Europe’s influence on energy issues will diminish. Another European fear is that Ukraine will be completely abandoned to Russian intentions. Ukraine’s pipeline network is its most powerful bargaining tool opposite Russia. If Trump insists on a pro-Russia policy, prompting a US-Ukraine split, then Europe will be Ukraine’s only remaining ally.

 

 

 

 

 

Gazprom, Edison, DEPA press on for Southern Corridor plan

After signing a Memorandum of Understanding (MoU) in Rome last February with the aim of developing the Southern Corridor for Russian natural gas supply to Europe, Russia’s Gazprom, Italy’s Edison and DEPA, Greece’s Public Gas Corporation, are now set to take an additional step in this direction.

Leading officials of the three energy companies are scheduled to meet in Moscow next Tuesday to discuss the overall progress made over the past ten-month period and also sign a new agreement containing even greater commitments than last February’s less specific MoU.

Issues expected to be discussed at the upcoming Moscow meeting include the Southern Corridor’s route, dispatch points for Russian gas within European territory, as well as various alternatives available for infrastructure that needs to be constructed.

Of course, the build-up to next Tuesday’s meeting does not mean that European Commission and US doubts about the Southern Corridor have faded. Both are looking to diversify Europe’s energy sources and lessen Russia’s dominance. Instead, the meeting indicates the determination of Gazprom, Edison and DEPA to coordinate their efforts and assess the project’s obstacles, exacerbated by the bad precedent set by South Stream, a previous Russian gas pipeline plan that ended up sinking as a result of the EU’s negative response.

Gazprom’s CEO Alexey Miller, in recent comments, noted: “We will decide – at the Moscow meeting – on how we will go about working on the project. It concerns the transportation of natural gas via Turkey and the Greek-Turkish border as well as construction of new pipelines on European territory, all the way to southern Italy.”

 

DEPA’s East Med pipeline plan receiving Israeli, US support

The development prospects of the East Med underwater natural gas pipeline being promoted by DEPA, the Public Gas Corporation, as a plan to trasnsmit gas from the east Mediterranean to European market, are being propelled by Israeli and US support.

Commenting about a forthnight ago, Israel’s national infrastructure, energy and water resources minister Yuval Steinitz noted the project could serve as a main natural gas supply channel if the current signs of substantial deposits in areas controlled by Egypt, Cyprus and Israel are proven.

The recent establishment of talks between DEPA and US oil company Noble Energy, which led to the signing of a memorandum of cooperation in June, reflects the US interest in the development of the underwater project, a key part of energy relations linking Greece, Cyprus and Israel.

Noble Energy is the biggest company active in the development and exploitation of deposits in the east Mediterranean. The US energy company holds stakes in an offshore block within Cyprus’s Exclusive Economic Zone (EEZ) as well as a major Israeli-conttrolled block, Leviathan.

The developing ties between DEPA and Noble Energy have been propelled by encouraging results produced by two different studies conducted on the pipeline’s technical and financial sustainability.

Until recently, Noble Energy had maintained a reserved stance on the plan to construct an underwater gas pipeline, preferring LNG solutions instead for the export of gas from the Cypriot and Israeli deposits. The US company now appears more open to alternatives.

Greek, Cypriot and Israeli officials are scheduled to meet during the current month in Athens, at the European Commission’s local headquarters, to examine the results of preliminary technical and economic studies conducted on the East Med pipeline. Participants will seek to pave the way for more advanced talks at a summit meeting in Israel this December to involve the energy ministers of Greece, Cyprus and Israel, as well as the European Commissioner for Climate Action and Energy Miguel, Arias Canete.

 

 

RAE, Bulgarian counterpart approve IGB market test bidding terms

RAE, Greece’s Regulatory Authority for Energy, and its Bulgarian counterpart, EWRC, have approved the Bidding Phase Notice submitted by ICGB AD, in compliance with the Guidelines for the Binding Phase of the Market Test for management and allocation of capacity on the IGB Interconnector, RAE announced in press release today.

The Bidding Phase Notice sets the rules of procedure for participation in the second phase of the Market Test and is run under the provisions of paragraph 6 of article 36 of Directive 2009/73/EC, in order to assess market interest in contracting capacity on the IGB Interconnector. Such an assessment is necessary before the authorities decide on the Exemption Application submitted by the project promoter, ICGB AD.

Final allocation of capacity to Market Test participants will be realized via the Final Joint Opinion of the two authorities, following the assessment of the updated Exemption Application to be submitted by ICGB AD.

The decisions issued by the Greek and Bulgarian authorities approving the Guidelines and then the Bidding Phase Notice, resulted from an excellent partnership established between the two institutions, the RAE statement noted.

 

IGB developments in October, Romania extension prospects favorable

The development prospects for the IGB (Interconnector Greece-Bulgaria) project are gaining increased momentum through heightened activity and positive signs of late, while the construction of the Romania-Bulgaria natural gas pipeline, also pivotal for the southeast Europe region as an IGB extension, is considered certain.

According to energypress sources, final decisions for the IGB project’s development are expected in October, when all interested parties will have submitted binding bids for pipeline capacity reservations.

Final investment decisions will be made and construction of the IGB will commence if the project’s market test successfully clears the capacity reservation stage, which will determine the investment’s sustainability.

The completed IGB project is scheduled to be launched in the second half of 2018, assuming there are no more delays from the the Bulgarian side, as has been the case in the past.

The IGB pipeline promises to play a crucial role in southeast Europe by providing a distribution channel towards Europe’s north for Caspian gas, to be transported to Europe’s southeast through the TAP (Trans-Adriatic Pipeline) project, once it is completed.

The IGB will stretch over 182 kilometers, 31 kilometers of which will cross Greek territory, running from Komotini, northeastern Greece, to Stara Zagora in Bulgaria. It will include supportive facilities such as metric stations and an operation center.

The project will have an initial capacity of 3 billion cubic meters per year, while provisions will be made for an increase to 5 billion cubic meters per year, if needed, through the installation of a compressor station.

The project will facilitate transportation of natural gas to Bulgaria through Greece, with reverse-flow operations available.

According to ICGB AD, the project’s consortium, nine non-binding expressions of interest – for a total capacity of 4.3 billion cubic meters per year from Greece to Bulgaria and roughly one billion cubic meters per year from Bulgaria to Greece – were submitted last April during the market test’s first stage.

The nine firms were Bulgargaz, DEPA (Greece’s Public Gas Corporation), Edison, Socar, Noble Energy, Gastrade, OMV Petrom – the Romanian subsidiary of Austria’s OMV – as well as two Bulgarian distribution companies, Citygaz and the Black Sea Technology Company.

 

 

Russia-Turkey reconciliation revives ‘Turkish Stream’ talks

Turkey’s President Recep Tayyip Erdogan said yesterday Ankara is ready to take steps towards the implementation of the ‘Turkish Stream’ gas pipeline project.

Bypassing Kiev, and punishing Sofia for having obstructed the construction of scrapped South Stream, the new ‘Turkish Stream’ pipeline will travel across the Black Sea to the Turkish city of Ipsila, close to the Greek-Turkish border.

The project’s aim is to deliver 47 billion cubic meters (bcm) of gas to Central Europe and the Balkans.

Relations between Moscow and Ankara deteriorated immensely following last November’s downing of a Russian jet by Turkish forces at the Syria-Turkey border, prompting the project to be shelved.

“We are ready to promptly take steps towards the implementation of this project, discuss it and make a decision,” Erdogan was quoted as saying by Russian news agency TASS in an interview yesterday.

Erdogan is scheduled to meet today with Russian President Vladimir Putin in Saint Petersburg.

In an interview with Le Monde, the Turkish President “praised” Putin for his stance toward the recent Turkish coup attempt, saying the Russian leader did not criticize him for the number of officials dismissed from Turkey’s military and civil service.

 

 

Authority approves IGB second-round market test guidelines

RAE, the Regulatory Authority for Energy, has approved guidelines set for the second round of a market test to entail binding bids from interested traders for capacity reservations concerning the IGB (Interconnector Greece-Bulgaria) project.

ICGB AD, the project’s consortium, must now present – within ten days of the authority’s endorsement, signed last Friday – a confidentiality agreement to participants who had expressed an interest in securing pipeline capacity through the first round, supply an official update, and also set a deadline for binding offers.

Interested parties will then need to sign and return their respective agreements within seven days. The deadline will be set to expire at least two months after official information is  forwarded to interested bidders.

The project’s consortium will need to inform interested parties whether their binding bids have been accepted or not ten days after bids have been submitted.

 

Skourletis reiterates objection to TAIPED’s PPC 17% sale plan

Energy minister Panos Skourletis has reiterated his opposition to a plan by TAIPED, the State Privatization Fund, aiming to privatize a 17 percent stake of PPC, the main power utility, in an interview published by local Sunday weekly newspaper Real.

Skourletis also informed that various scenarios would be possible if the attempt to finalize the sale of DESFA, the natural gas operator, eventually fails, as now appears likelier than ever before. The minister also commented positively on the South Stream pipeline’s prospects.

“Yes, indeed, I believe that TAIPED is wrongly extending its reach into other domains beyond the scope of its responsibilities. This is an organization we inherited [from the previous administration] and whose actions are based on a momentum from the past,” Skourletis noted on the fund’s listing of a 17 percent stake of PPC on its privatizations list.

The Syriza-led coalition’s plan to establish a new super-privatization fund and demote TAIPED as a subsidiary within the resulting new structure will limit TAIPED’s authority to privatizations agreed to by the government in the country’s third privatization agreement last summer, the minister noted.

Asked to comment how he would respond should TAIPED launch a tender for the sale of PPC’s 17 percent in October, Skourletis remarked: “The transfer of the corporation’s 17 percent during the terms of previous governments does not mean that it must be sold. Mr. [Stergios] Pitsiorlas [TAIPED”S chief], who is certainly aware of this, now appears to be ignoring the issue, which raises questions.”

The Greek State controls PPC with a 51.12 percent stake.

The rumored preparations for a withdrawal by Azeri energy company Socar from an unfinalized, long-delayed and troubled deal concerning the acquisition of a 66 percent stake in DESFA will not affect the progress of the TAP (Trans Adriatic Pipeline) project, Skourletis remarked.

Officials at Socar, which holds a 20 percent stake in the TAP consortium developing the pipeline to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to Italy, have leaked information suggesting the company is preparing to exit the DESFA deal as a result of a recent amendment ratified in Greek parliament that greatly limits network usage hikes and, therefore, the natural gas operator’s revenue potential.

Under DESFA’s previous regulations, network usage fees would have risen by 68 percent, a hike avoided to protect local production and households, Skourletis said.

“The TAP project is making rapid progress and, based on current indications, the Greek segment will be the first to be completed,” Skourletis noted.

 

Turkish unrest boosts local gas storage, LNG station prospects

Last week’s attempted coup in Turkey, the three-month state of emergency just declared by the neighboring country’s president Recep Tayyip Erdogan, the polarization of citizens, and, above all, the overwhelming fear that Turkey is entering a period of prolonged unrest amid which an eventual outbreak of civil war cannot be ruled out, are all new factors reshaping plans for the region’s energy projects.

Energy-sector players with interests have already recognized the arrival of a new era for the region and are rethinking and revising their plans accordingly, regardless of whether they are openly admitting so or not.

For example, Russia is now displaying a revived interest for the development of a stalled oil pipeline to link Burgas, on the Bulgarian Black Sea coast, with Alexandroupoli, in Greece’s northeast. The pipeline would bypass the Bosporus and Dardanelles and offer an alternative route for the delivery of Russian and Caspian oil should any shipping limitations arise in the Black Sea straits, as Nikolay Tokarev, president of the Russian pipeline company Transneft, put it just days ago.

The prospects for the Trans Anatolian Pipeline (TANAP), a major pipeline planned to transfer natural gas from the Azeri deposit Shah Deniz across the Georgian-Turkish borders, in Turkey’s west, are suddenly not as bright as a result of the latest political turmoil in Turkey. This pipeline, if completed, would transport natural gas to the Greek-Turkish border and, from there, continue via the TAP (Trans Adriatic Pipeline) across to Italy.

Yesterday, the consortium behind the TANAP project rushed to assure that Turkey’s political developments will not affect the pipeline’s progress, noting that the pipeline’s construction remains on schedule. However, it is quite obvious that a 1,800-kilometer pipeline crossing a country mired in major political uncertainty represents a business venture whose current risk greatly exceeds the level originally anticipated. Without a doubt, within this context, the consortium will reassess its plans.

The prospects of other projects have gained ground as a result of the situation in Turkey. These include a planned floating LNG station in Alexandroupoli, as well as an underground natural gas storage facility at a depleted deposit in the Gulf of Kavala, northern Greece.

Development of the Alexandroupoli’s floating LNG station, if the required capital and entrepreneurial participation are secured, promises to establish the facility as a safe supply point for the TAP pipeline, if the TANAP project is delayed or rerouted. The Alexandroupoli LNG station also promises to support the planned Greek-Bulgarian IGB interconnector.

During a recent meeting in Athens with Greece’s energy minister Panos Skourletis, officials of US energy company Cheniere, primarily active in LNG-related businesses, declared, clearer than ever before, the company’s interest to take part in the development of the Alexandroupoli LNG station.

Gastrade, a Copelouzos corporate group company and fundemantal proponent behind the investment plan for the Alexandroupoli station, plans to have finalized an investment plan and capacity commitments from traders by the end of the year. The objective is to complete the LNG station’s construction by the end of 2018.

East Med project feasible, IGI Poseidon chief tells conference

Elio Ruggeri, CEO of IGI Poseidon, has stressed the importance for southeast Europe of the East Med pipeline, a project to link Greece with major natural gas deposits in Cypriot and Israeli territorial waters, in a speech delivered at an Economist conference in Athens.

Ruggeri noted that the IGI Poseidon consortium is contributing to the effort to develop a natural gas corridor of multiple uses in the wider region, which will include Russian gas, the most important aspect.

“We are making an effort with Gazprom and, by the end of the year, will know whether the idea will lead to some sort of initiative,” Ruggeri remarked.

Ruggeri added that IGI Poseidon will seek to bring East Mediterranean natural gas to Europe via the East Med pipeline, adding that the project is technically and economically feasible. “There were doubts in the past. We examined the technical and economic sustainability through studies conducted by a leading research firm. This study was completed and showed that the project is technically feasible. Without a doubt, the project can be constructed. The project is also economically sustainable,” Ruggeri noted.

He also said that major potential exists for further natural gas discoveries in the East Mediterranean. “This could mean a new Norway. The region wil require many export solutions. Production and export must be co-developed,” he noted.

TAP consortium has received over 2,500 pipelines for project

Over 2,500 pipelines have been received by the TAP (Trans Adriatic Pipeline) consortium from the Greek ports of Thessaloniki and Kavala, and by rail. A total of 32,000 pipelines will be installed on Greek territory.

The project’s developers have begun preliminary groundwork for the installation of the pipelines, to cross northern Greece as part of the route carrying Azeri natural gas to Europe, via Italy.

The consortium has needed to use the railway network as a result of strike action, lasting many days, at the ports of Piraeus and Thessaloniki.

Rikard Scoufias, TAP’s Country Manager for Greece, who is taking part in an Economist conference today, will present a progress report on the preliminary work being carried out and will also discuss the project’s importance for EU energy diversification.

The TAP official is also expected to make reference to two other possible projects, the floating LNG station in Alexandroupoli and the IGB interconnector between Greece and Bulgaria. A decision on the IGB project is expected in September, after gas trading firms have submitted binding offers for pipeline capacity.

TAP’s Greek segment will measure 550 kilometers in length. The total weight of pipelines to be used will amount to 323,000 tons, the equivalent of 44 Eiffel Towers.

Compressor upgrade to boost Greek-Bulgarian trade ability

The upgraded natural gas system compressor at the Greek-Bulgarian border, launched yesterday in Petrich, southwest Bulgaria, at a ceremony attended by the neighboring country’s Prime Minister Boyko Borisov and energy minister Temenuzhka Petkova, provides new standards and potential for bilateral natural gas trade, including greater inflow from the north.

The compressor, linked to Sidirokastro on the Greek side of the border, will be able to operate in reverse flow at a capacity of three billion cubic meters (bcm), annually, and ensure natural gas supply from Greece for Bulgaria, if required, the Bulgarian energy ministry noted in an announcement.

Petkova, in her statements, highlighted that Bulgaria now possesses the means to receive natural gas from Greece’s existing LNG terminal in Revythoussa, an islet just off Athens.

Upgrade work completed over the past eight months at three more Bulgarian compressor stations, in Strandzha, Ihtiman and Lozenets, will enable greater natural gas imports into Greece from Bulgaria via pipeline infrastructure and also enhance regional gas trade potential, market officials noted.

Earlier this month, small amounts of natural gas were imported into Greece via pipeline by a private-sector trading firm for the first time after pipeline capacity normally reserved for DEPA, the Public Gas Corporation, was made available.

DESFA, Greece natural gas grid operator, and its Bulgarian counterpart Bulgartransgaz are close to finalizing an interconnection agreement that promises to broaden natural gas trading potential.

DEPA, in a statement, offered its support to the ongoing talks between the two natural gas grid operators, noting that all necessary conditions are being established for robust competition in the Greek natural market, which, ultimately, will lead to lower prices for consumers.

 

 

German deputy chancellor to visit following Putin, Valls

Germany’s Vice Chancellor Sigmar Gabriel is scheduled to visit Greece on June 30 as part of the Greek government’s wider effort to draw capital and promote privatizations, two fronts in urgent need of momentum.

Gabriel, head of the Social Democratic Party, part of Germany’s grand coalition, will, according to sources, be joined by MPs and entrepreneurs interested in energy-sector deals, especially renewable energy.

Gabriel’s visit to Athens will be the third in a month by a top foreign government official following the recent visits by Russian president Vladimir Putin and French prime minister Manuel Valls. Though both Putin and Valls had included energy on their agendas, no groundbreaking developments were achieved.

Germany is particularly interested in wind energy investments. The country’s interest was made clear in 2011 when Greece’s ex-finance minister Giorgos Papaconstantinou had proposed an ambitious plan, dubbed “Ilios”, for export of Greek solar energy to Europe. Also, joint Greek-German RES investments had been discussed in 2014 during a meeting in Berlin between Greece’s former foreign minister Evaggelos Venizelos and Gabriel. However, no further progress was made. Former energy minister Yiannis Maniatis, in other Greek-German talks, had looked into the possibility of establishing a superfund to provide funds for eco-friendly upgrades of buildings. German bank KfW, Maniatis had noted at the time, was planning to contribute 100 million euros to this fund. However, national elections intervened and the initiative was halted.

Besides RES interests, German officials are also keeping a close watch on matters such as the TAP and IGB pipelines, the EU’s energy policy, as well as climate change issues amid the environmental targets set for 2030.

 

TAP official: ‘Work to start in 2016 and be completed in 2020’

Construction work on the Trans Adriatic Pipeline (TAP) section traversing Greece will begin within 2016 and the project will be completed by 2020, Rikard Scoufias, TAP’s Country Manager for Greece, assured during a speech at a conference organized by TEE/TKM, the Technical Chamber of Greece/Central Macedonia Section.

Scoufias noted the TAP project stands as “yet another sign of the confidence towards Greece,” while also stressing that the pipeline promises to bolster Greece’s geostrategic role on the energy map.

Scoufias said the TAP consortium is satisfied by its association with the Greek State. He reminded that the first deliveries of steel line pipes and bends to be used for the pipeline’s construction arrived at Greece’s ports of Thessaloniki and Kavala in May.

“Roughly 1,500 pipelines arrived in Thessaloniki and Kavala. Each pipeline measures 80 meters in length and weighs 10 tons. A total of 32,000 pipelines will be installed on Greek territory, while, overall, TAP will be comprised of 53,000 pipelines weighing 500,000 tons,” Scoufias said.

The TAP project will carry Azeri natural gas through northern Greece, Albania, and across the Adriatic Sea to Italy.

Scoufias also pointed out the project’s excellent safety record, noting that safety standards are being fully observed.

He noted that 150 companies active in Greece have so far collaborated with the TAP consortium “not because they are local but the best.”

Local communities are very supportive of the project, Scoufias said, adding that some 600 meetings have been held with local communities to resolve issues.

 

Poseidon reaches agreement with Noble for East Med preliminary work

Athens-based Poseidon SA, a 50-50 joint venture involving DEPA, the Public Gas Corporation, and Edison, has signed an agreement with Noble Energy International Ltd to finalize preliminary procedures for the East Med pipeline ahead of the project’s Front End Engineering Design (FEED) stage. As part of the agreement, Noble will also conduct a sustainability study for the prospective pipleline, to carry natural gas exports from major deposits discovered in the East Mediterranean region.

The East Med pipeline has been designated as a Project of Common Interest (PCI) and is supported by the EU through the Connecting Europe Facility (CEF), a co-funding program.

The East Med project received two million euros in 2015 through the CEF program to fund activies preceding the FEED stage.

Poseidon is involved in the development of three major natural gas pipeline projects, the Poseidon pipeline, a submarine passage linking northwestern Greece with Italy’s south, the IGB, to interconnect northeastern Greece with southern Bulgaria, and the East Med, planned to run from Cyprus to Greece’s northwest via Crete.

The East Med project, including submarine and overland segments, will cover a distance of roughly 1,900 kilometers. It is being planned to carry as many as 16 billion cubic meters of natural gas per yer (bcm/y) from major Levantine Sea deposits located in Cypriot and Israeli territorial waters. The East Med pipeline may also carry possible natural gas deposits in Greek territory.

East Med, combined with the Poseidon and IGB projects, will be able to supply natural gas to Italy and other countries in Europe’s southeast.

 

 

 

First TAP line pipes arriving in Thessaloniki and Kavala

The first deliveries of steel line pipes and bends, to be used in the construction of the Trans Adriatic Pipeline (TAP) section traversing Greece, have started arriving at the ports of Thessaloniki and Kavala, in the country’s north, the TAP consortium has announced.

A ceremony marking the beginning of construction for the project was held last week in Thessaloniki under the auspices of Greece’s Prime Minister Alexis Tsipras. The event was also attended by top-level representatives of countries participating in the implementation of the Southern Gas Corridor; the European Union; the US, Bulgaria and Switzerland.

The first vessels and trains to arrive carried approximately 1,500 line pipes and 200 bends. These will be stored at the Main Marshalling Yards of Thessaloniki, at the Thessaloniki Port Authority, and at Kavala, at its “Philip II” port. All pipes will subsequently be transferred along the routing of the pipeline.

“The delivery of line pipes and bends to the ports of Thessaloniki and Kavala marks the commencement of the construction period for the Greek section of the pipeline. This is the most significant stage of the biggest energy infrastructure project to be currently implemented in Greece, which – thanks to the excellent cooperation of all stakeholders – is advancing as planned and will be ready to receive gas in 2020,” noted Rikard Scoufias, TAP’s Country Manager for Greece. “The deliveries of materials by the contractors are executed in accordance with TAP’s high health and safety standards,” he added.

Approximately 32,000 line pipes will be used for the construction of the pipeline section crossing in Greece. Line pipes are produced by the Greek company Corinth Pipeworks SA (495 km) and the German company Salzgitter Mannesmann International GmbH (270 km). Salzgitter is also manufacturing the hot formed bends.

A total of 323,000 tonnes of steel pipes, the equivalent of 44 Eiffel towers, will be used for the 550 km of pipeline to be constructed 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 reaching 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.

TAP will promote economic development and job creation along the pipeline route and will be a major source of foreign direct investment. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow approximately one year later in early 2020.

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

Time is ripe for investments, PM highlights at TAP launch

Development of the TAP (Trans Adriatic Pipeline) project, to carry Azeri natural gas to Europe via a route including Greece’s north, combined with the anticipated completion of the first review of Greece’s third bailout package by international lenders, promises to pave the way towards major investments in the country, Prime Minister Alexis Tsipras noted during his speech at a ceremony held in Thessaloniki today, marking the launch of construction work for TAP’s Greek segment.

“The hope that we are overcoming the [recession’s] most difficult stage and opening up to the prospect of stability removes a sense of uncertainty that has surrounded the Greek economy and also creates a stable environment for attracting investments,” Tsipras remarked at the TAP ceremony.

Tsipras predicted economic growth from the second half of 2016 and onwards, noted that Greece’s unemployment rate is now de-escalating, and added that the next tranche of bailout money would be used to also cover amounts owed by the State to citizens, all of which would gradually put Greece on a path of sustainable growth, according to the Prime Minister.

Tsipras said the TAP project was justifiably regarded as one of the world’s biggest energy projects at present, adding that it could be interconnected with other existing and future pipelines for access to more markets. He cited the prospective Greek-Bulgarian IGB interconnector as an example, noting its development will serve as a bridge to supply natural gas to central and east Europe.

The Prime Minister once again stressed that Greece is developing into a multidimensional energy hub along with the transformation of southeast Europe’s energy map. He cited the IGB, the prospective LNG floating station in Alexandroupoli, northeastern Greece, and the current upgrade of the existing LNG facility in Rethythoussa, an islet close to Athens, as developments that are reshaping the country’s production potential.

Tsipras pointed out that the TAP project’s budget for the local segment is worth over two billion euros and promises to create 8,000 jobs in Greece.

The project’s development comes at a critical time for the region as “Caucasus and central Mediterranean countries are being called upon to bolster stability and cooperation in an area of conflict,” Tsipras said.

He ranked the TAP project as the biggest foreign investment in Greece, highlighting the involvement of Greek firms and resulting lower energy costs for enterprises.

Georgia’s Prime Minister Giorgi Kvirikashvili, who attended the ceremony, said the TAP project will create a total of 30,000 jobs in the countries it will cross.

Azerbaijan’s First Deputy Prime Minister Yaqub Eyyubov made reference to the role to be played by the Southern Corridor as an alternative energy source, noting it will support the European plan for diversified energy sources and increased energy security.

Ian Bradshaw, the TAP project’s managing director, also made note of the pipeline’s role in diversifying the EU’s energy sources and also took the opportunity to thank Greece’s Prime Minister and the Greek State for the support offered.

Maros Sefcovic, the European Commission vice president responsible for Energy Union, who delivered his speech in the Greek language, described the day as historic and the Southern Corridor as the biggest energy project being carried out at present.

The project’s significance was also underlined by Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, who relayed a message from John Kerry, the Secretary of State. “Completion of the Southern Corridor must stand as a priority in order to ensure energy security. The US supports this project which offers new hope for stability in the region,” Hochstein remarked. “The pipeline can make a difference in the region and help areas that face serious issues with monopoly-related problems,” he added.

Turkish energy minister Berat Albayrak stressed that TAP, along with the TANAP project, will supply greater amounts of natural gas to the region. “We are ready to discuss all the economically feasible projects to support energy diversification,” Albayrak said.

Italy’s minister of economic development, Carlo Calenda, said the Italian government has actively supported the TAP project and recently granted permits for the project’s development.

Bulgarian energy minister Temenuzhka Petkova informed that Bulgaria’s government is placing great emphasis on the Greek-Bulgarian IGB interconnector, to be linked to the TAP pipeline. The second round of a market test for the IGB will begin in June, she noted.

Geopolitical activity heightens for TAP work launch ceremony

Tomorrow’s ceremony to launch construction work for the Greek segment of TAP (Trans Adriatic Pipeline) carries double symbolic meaning. On the one hand, it will mark the first concrete step of a project pivotal to the government’s long-heralded energy policy seeking to establish Greece as a regional energy hub and gateway to the Balkans. On the other hand, the launch for the TAP project, promising 1.5 billion euros of direct private-sector investments, provides Greece with needed investment credibility at a crucial time. The first review of the country’s third bailout package is approaching completion and the government is pursuing a multi-leveled effort to attract investments to Greece’s battered economy.

Officials are expected to maneuver on the sidelines of the ceremony in Thessaloniki, today, tomorrow and Wednesday, especially for energy-sector projects still not confirmed, such as the Greek-Bulgarian IGB natural gas pipeline project and the floating LNG terminal in Alexandroupoli, northeastern Greece.

The country’s energy minister Panos Skourletis will have the opportunity to meet with interested parties and propel the prospects of these projects. A planned meeting with his Bulgarian counterpart Temenuzhka Petkova ranks as one of the most vital on the minister’s agenda. Besides the LNG station in Alexandroupoli, the two ministers are expected to also discuss the prospective IGB project, set to enter a crucial second-round market test requiring binding offers from interested traders, probably around June or July.

Meetings will also be held with a delegation representing US firm Cheniere Energy, primarily active in LNG-related businesses, which is seemingly showing renewed interest in the Alexandroupoli project. It remains to be seen whether Cheniere could limit its involvement to trading activity or also take on some risk by investing in the LNG station’s development.

As has been announced, the Greek energy minsiter’s agenda also includes meetings with Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, Maros Sefcovic, the European Commission vice president responsible for Energy Union, and Ian Bradshaw, TAP’s Managing Director.

Also, according to Azeri media reports, Socar president Rovnag Abdullayev, expected in Thessaloniki for the TAP ceremony, will meet with Greek government officials on the delayed sale of DESFA, Greece’s natural gas grid operator, stagnant over the past three years following European Commission intervention over EU competition and energy security concerns. Socar had agreed to acquire a 66 percent stake of DESFA as the winning bidder of an international tender before Brussels stepped in to demand that the Azeri company surrender 17 percent to a European operator.

The TAP pipeline, planned to run a total of 773 kilometers, including 550 kilometers within Greece, across the country’s north, is scheduled to begin operating in 2019. It will carry natural gas from the Shah Deniz II deposit to the Balkans and Europe.

A total of some 150 Greek firms are expected to be commissioned contracts and sub-contracts for the TAP project’s construction, to create an estimated 8,000 jobs in Greece.

 

Energy issues not a top priority for Putin visit to Athens

Officials in Athens and Moscow preparing the agenda for Russian President Vladimir Putin’s upcoming visit to the Greek capital, scheduled for May 28, are not setting energy issues as a top priority.

Naturally, this does not mean that Moscow’s latest natural gas pipeline proposal for Europe’s southeast, intended to cross Bulgaria, Greece and Italy, will not be raised by the visiting Russian delegation. This latest alternative is being viewed more favorably in Europe than last year’s Turkish Stream as it does not pass through Turkey.

Although Athens will reiterate its plans for a multidimensional energy policy, which includes Russia as a source, it will maintain a mild stance to avoid upsetting the country’s lenders and the USA at a critical point in time when their support is crucial amid the effort to complete the first review of Greece’s third bailout package. Support is also needed as a result of the increasing number of Turkish violations of Greek airspace above the Aegean.

As for Russia, the country has other energy priorities, besides the Southern Corridor, such as Nord Stream 2, a natural gas pipeline plan with a 55 billion cubic meter capacity intended to carry natural gas through the Baltic Sea to Germany. The plan, budgeted at 10 billion euros, has divided European opinion.

The leaders of eight European countries in the east – Czech Republic, Estonia, Hungary, Latvia, Poland, Slovakia, Romania, and Lithuania – clearly oppose an extension of Nord Stream, contending it will increase the EU’s energy dependency on Russia.

Russia is backing the plan, noting it will bypass Ukraine and therefore avoid transit fees as well as political wrangling, which has affected Russian natural gas exports a number of times in recent years.

Considering all the above, Greece and Russia may sign a declaration of mutual cooperation for the energy sector on May 28, which, in actual fact, will not represent anything groundbreaking. Not because both sides are not keen to further develop their ties, but as a result of the political expediency offered to both by restraint, given the current set of respective factors for each.

Over the past eight months or so, the Greek government has redirected the country’s energy interests. It has stepped back from an intention to widen ties with the east and, once again, looked to the west and the US-influenced sphere.

Greece is now focused on the construction of the TAP (Trans Adriatic Pipeline) project, planned to carry 10 billion cubic meters of natural gas, annually, from Azerbaijan to central European countries via Turkey, Greece and Italy, as well as the Greek-Bulgarian IGB interconnector, to connect with TAP’s Greek segment and supply the Balkan region.

Yesterday, DEPA, the Public Gas Corporation, announced that nine non-binding bids were made for the first stage of an IGB market test. The development prospects for the IGB pipeline project will be solidified if this level of interest is maintained in the market test’s next stage, when binding offers will be submitted by potential pipeline users.

According to sources, the Russian agenda for Putin’s upcoming visit will include Gazprom interest for establishing partnerships with PPC, the main power utility, as well as commercial trade plans between Russian petroleum giant Rosneft and ELPE (Hellenic Petroleum). Scenarios alleging Gazprom’s interest for a stake in DEPA and Rosneft’s equity interest in ELPE seem far off at this stage.

 

Effort made to coordinate IGB, Alexandroupoli LNG station

Officials at Greece’s Environment and Energy Ministry are working on a plan that aims to synchronize the development of the Greek-Bulgarian IGB natural gas interconnector and the floating LNG station in Alexandroupoli, northeastern Greece, believing one will benefit the other.

The effort is being made as Bulgarian energy minister Temenuzhka Petkova prepares to make an official visit to Athens to take part in a meeting to focus on the floating LNG station in Alexandroupoli. Officials representing all enterprises interested in the project – the US energy company Cheniere, DEPA, the Public Gas Corporation, Bulgargaz, the Bulgarian state-run gas company, and Gastrade, a member of the Copelouzos corporate group – will all take part in the Athens meeting.

The Bulgarian government appears to have decided it wants to take part in the LNG station’s development.

Should the Alexandroupoli LNG station’s development proceed, a consortium of five partners will reportedly be established for its construction, each holding 20 percent stakes. Cheniere, a second unnamed US firm, which has demanded to remain anonymous for the time being as it is listed, DEPA, Gastrade, and Bulgargaz are believed to be the five firms involved in the plan.

According to sources, the Former Yougoslav Republic of Macedonia (Fyrom) recently also expressed an interest in the LNG station’s development.

As for the IGB interconnector, it has become clear to both Greek and Bulgarian officials that its feasibility depends on the extent to which the infrastructure project’s capacity can be covered. This  detail will soon be determined in the market test’s next stage, when gas traders will be invited to submit their binding offers reserving capacities. It has also become clear that a floating LNG terminal in Alexandroupoli will be meaningless without a co-existing IGB interconnector.

Meeting the required level of capacity to be reserved by natural gas traders for the IGB project will also need to be followed up by actual demand from customers who will purchase these amounts. If this does not occur, the project will not be sustainable.

The IGB market test’s first stage, completed on April 8 and held to establish an estimate of the total capacity required by traders, produced offers amounting to over four billion cubic meters per year, well over the 1.7 billion cubic meters needed to make the project sustainable.

Half of the capacity amount declared was made by Gastrade (2 billion cubic meters). Interest was also expressed by Bulgaraz – it has signed a deal to import one billion cubic meters of natural gas from the Shah Deniz II deposit as of 2020 – DEPA (200 million cubic meters), Italy’s Edison (a similar amount), Socar (roughly 250 million cubic meters), and the UK’s Noble Clean Fuels, which trades natural gas and is focused on the Ukranian market, which it supplies via Slovakia.

An agreement in Athens at the upcoming meeting for the Alexandroupoli LNG station promises to propel the IGB interconnector’s development. In this case, the capacites indicated in the market test’s first stage are likely to be repeated as binding offers in the second stage.

 

 

Energy matters included on Putin’s agenda for May visit

Russian president Vladimir Putin, scheduled to make an official visit to Athens on May 28, will arrive with an agenda to feature energy-sector matters, including an interest for the development of partnerships between Russian firms and PPC, the main power utility.

Assuming the current negotiations on the first review of Greece’s third bailout agreement have been finalized by the time of Putin’s arrrival, the government will no doubt seek to take advantage of the Russian leader’s visit and portray a success story whose dimensions include prospective energy-sector partnerships as well as Greece’s upgraded geostrategic role in the wider region.

Although Russian investment interest in the Thessaloniki port and TRAINOSE, Greece’s railway company, is expected to be reiterated, emphasis will be placed on the energy sector, especially on plans to develop a Russian natural gas pipeline through the region and establish Russian partnerships with PPC.

Moscow is heavily relying on Greece in its effort to serve Europe’s increased natural gas needs. Following the abandonment of the South Stream and Turkish Stream plans, Russia appears to be insisting with a route in Europe’s southeast to run through Bulgaria, Greece, and follow the ITGI submarine route across to Italy.

The Greek government will seek to keep such a prospect open as part of its “multidimensional” energy policy announced shortly after Syriza was elected to power in January last year, despite the fact that the approach runs contrary to an EU direction aiming for reduced Russian energy reliance.

As for the prospective PPC partnerships, Russia’s Gazprom is expected to reiterate an older plan proposed to energy minister Panos Skourletis entailing the acquisition of rights to operate the power utility’s lignite mine in Vevi, which supplies two power stations, Melitis I and II, in exchange for the now-scrapped plan for the construction of hydropower stations by Russian companies in Sykia and Pefkofyto, alongside the Achelous River in the northwest. Prometheus Gas, a joint venture involving Gazprom and the Copelouzos Group, had a leading role in that plan.

Aktor, which had won a previous tender for a licence to operate the Vevi mine and signed an agreement with the ministry that was never ratified in Greek Parliament, could also take part in a consortium for the Vevi mine.

It remains to be seen whether the Greek-Russian discussions will lead to any agreements as financing new projects in the local energy market remains an extremely difficult decision for any investor.

Concern expressed about IGB market test results

An analysis of first-stage market test results conducted to determine the commercial interest for the Greek-Bulgarian IGB interconnector has raised concerns among the project’s partners as well as the governments of both countries.

Although the initial interest concerning capacity level commitment produced satisfying results – the total figure exceeded four billion cubic meters per yer, while the project’s sustainability is assured at 1.7 billion cubic meters – a closer look at the study’s participants and the amounts they declared has created doubts as to whether the levels expressed will be followed up when the time comes to submit binding bids.

Officials are remaining reserved despite the encouraging initial figures as parties had not followed up with binding bids that corresponded with the inital levels of interest expressed in a previous market test conducted.

Six companies declared an interest to reserve capacities in the IGB’s latest market test. These are the Bulgarian state-run gas company Bulgaraz, DEPA, the Public Gas Corporation, Italy’s Edison, Azeri company Socar, UK firm Noble Clean Fuels, and Gas Trade, a member of the Copelouzos corporate group.

Bulgaraz has signed an agreement to import one billion cubic meters of natural gas from the Azeri gas field Shah Deniz II as of 2020 and is interested in transferring natural gas to reach Greece from the TAP pipeline.

DEPA, a member of the IGB consortium, has declared it intends to reserve a small 200 cubic-meter capacity. Edison, also a consortium member, indicated it could reserve a similar amount. Socar, involved in the development of Shah Deniz II, has declared an amount of roughly 250 cubic meters. Gastrade is planning to develop a floating LNG station in Alexandroupoli, northeastern Greece, a project entirely dependent on the IGB’s construction. Gastrade has declared a capacity of more than two billion cubic meters.

Reliable sector sources explained that the combination of interested parties and the capacity amounts they declared do not ensure that all will roll smoothly, despite the fact that the IGB project enjoys backing from Brussels, Washington and the governments of all countries involved.

Roughly half the amount declared in the market test’s first round was maded by Gastrade. It is believed the Copelouzos group, its parent company, will not follow up with a binding offer in the second stage if an agreement has not been finalized with partners for the development of the LNG station in Alexandroupoli. On the other hand, if the IGB’s future is not assured, the participation of companies such as US firm Cheniere, another listed yet unnamed US firm, Bulgargaz, even DEPA, would be doubtful.

An investment plan for the IGB interconnector was finalized last December in Sofia during a visit by Greek energy minister Panos Skourletis.

A first market test completed nearly two years ago showed that just 1 to 1.2 billion cubic meters of the IGB’s capacity would be covered. The project will have an initial capacity of 3 billion cubic meters with the ability to reach 5 billion cubic meters if a compressor is installed.

The IGB project’s budget is estimated at 220 million euros. Its Bulgarian section will cover a distance of 151 kilometers, from Makaza to Stara Zagora, while the Greek stretch will run for 31 kilometers. According to the project’s schedule, construction will need to commence in October this year.