Commission approves Greece-TAP agreement for pipeline

The European Commission has found the Host Government Agreement between the Greek authorities and the Trans Adriatic Pipeline to be in line with EU state aid rules, it announced today, noting that the project will improve the security and diversity of EU energy supplies without unduly distorting competition in the Single Market.

The Commission’s agreement on state aid was one of the prerequisites within the Host Government agreement that still needed to be obtained before the Trans Adriatic Pipeline project could start.

Margrethe Vestager, Commissioner in charge of competition policy, stated: “Today’s decision opens the way for a multi-billion infrastructure project in Greece. The Trans Adriatic Pipeline will bring new gas to the EU and increase the security of energy supply for Southeast Europe. The investment incentives offered by the Greek Government are limited to what is necessary to make the project happen and in compliance with state aid rules.”

Maroš Šefčovič, Vice-President responsible for Energy Union, said: “Today’s approval of the TAP agreement is an important step towards completing the Southern Gas Corridor. The Energy Union framework strategy of February 2015 identified this project as a key contribution to the EU’s energy security, bringing new routes and sources of gas to Europe. Just on Monday, the Southern Gas Corridor ministerial meeting in Baku, which I attended, confirmed the determination of all participating countries and consortia to complete this key infrastructure project on time.”

The Trans Adriatic Pipeline is the European leg of the Southern Gas Corridor, which aims to connect the EU market to new gas sources. With an initial capacity of 10 billion cubic metres of gas per year, the pipeline will transport gas from the Shah Deniz II field in Azerbaijan to the EU market as of 2020. The Trans Adriatic Pipeline will run from the Greek border via Albania to Italy, under the Adriatic Sea. The builder and operator of the pipeline is Trans Adriatic Pipeline AG (TAP), a joint venture of several energy companies. TAP will invest 5.6 billion euros over five years in the project, 2.3 billion of this in Greece.

The Host Government Agreement between Greek authorities and TAP sets out how the TAP consortium will construct and operate the pipeline and defines the respective obligations of the parties. In particular, the agreement provides TAP with a specific tax regime for 25 years from the start of commercial operations. This may give the company an economic advantage over its competitors, who would not benefit from the specific tax regime, and therefore involves state aid in the meaning of the EU rules.

The Commission assessed the measure under its 2014 Guidelines on state aid for energy and environmental protection. The Guidelines state that such aid can be found compatible under certain conditions when it furthers objectives of common interest. The Commission found that:

  • the project will contribute to further diversification of European energy supply sources and routes: it will bring gas from the Caspian Sea region and potentially the Middle East to the EU;
  • competition in the European gas market will be increased thanks to the extra volumes of gas and new supply route;
  • the construction of the pipeline requires substantial upfront investment over several years before any revenue will be generated. The project will be funded entirely by private investment and will generate revenues in its Greek part only from the tariffs paid by clients shipping gas through the pipeline. The Commission concluded that the project would most unlikely not be  carried out without aid;
  • the aid is in the form of a specific tax regime that, depending on whether tax rates increase or decrease, will lead TAP to pay more or less tax than it would without the aid. If the rates increase the aid will be limited to the minimum tax benefit for TAP;
  • in particular, the scheme has a built in adjustment mechanism that limits the maximum benefit for TAP. If the Greek equivalent applicable tax rate were to rise or fall beyond 20%, an adjustment mechanism to recalculate TAP’s contribution will come into effect. The Greek authorities will monitor this to ensure that TAP complies with the methodology and therefore the aid is limited to the minimum necessary.

The Commission therefore concluded under the Guidelines that the project’s benefits in terms of increased competition and security of energy supply clearly outweigh any potential distortions of competition triggered by the state aid.

Background

Trans Adriatic Pipeline AG is a joint venture company registered in Switzerland. Its shareholders are BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%).

The Trans Adriatic Pipeline is recognised as a project of common interest (PCI) in the framework of the EU’s Trans-European Energy Infrastructure Guidelines. PCIs are aimed at helping create an integrated EU energy market and are essential for reaching the EU’s energy policy objectives of affordable, secure and sustainable energy.

The Commission published its first list of PCIs in 2013. The list is updated every two years to integrate newly needed projects or to remove obsolete ones. The current PCI list was approved on November 18, 2015.

The non-confidential version of the decision will be made available under the case number SA.43879 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Revised ‘Greek Stream’ plan to be sought within 2016

Officials at Gazprom, Edison, and DEPA, Greece’s Public Gas Corporation have told energypress that they are now preparing a second step towards reviving the “Greek Stream” project – intended to supply Russian natural gas to Europe via the south – following last week’s signing of a memorandum of understanding (MOU) for the development of the stalled ITGI natural gas pipeline to link Greece and Italy and serve as a route for Russian gas supply to Europe through the Southern Corridor.

As part of the plan’s second stage, the officials will seek to determine a route passing through Bulgaria for the “Greek Stream” project.

Authorities closely involved with the project have noted that much will depend on how Russian-Turkish bilateral ties play out. Bulgarian territory is now being considered as an alternative for the Russian gas pipeline’s route as a result of the troubled ties between Russia and Turkey. Should these two countries resolve their differences, the Bulgarian alternative could be abandoned, but this seems highly unlikely at present.

A date for the next meeting between Gazprom, Edison, and DEPA officials has yet to be set. Technocrats will meet to focus on details such as natural gas quantities to be supplied through the pipeline, cost and financing issues that may ensure the project’s sustainability, as well as the  geographical route. The three companies want to have completed this part of the project’s task by the end of this year.

Besides the technocratic details, work also needs to be carried out at a diplomatic level to secure the European Commission’s backing of the Russian pipeline plan for Europe’s south. Gazprom, Edison, and DEPA officials will seek to secure the EU executive body’s official support for the project by the end of this year. This has already been unofficially granted, it is believed.

The age-old ITGI plan linking Greece and Italy was never carried out but this could now be developed and utilized as part of Russia’s latest plan for natural gas supply to Europe via the south.

ITGI route revived as DEPA, Gazprom, and Edison sign memorandum

A memorandum of understanding (MOU) for the development of a natural gas pipeline to link Greece and Italy and serve as a route for supply of Russian gas to Europe through the Southern Corridor was signed yesterday evening by the chief executives of Gazprom, Edison, and DEPA, Greece’s Public Gas Corporation – Alexey Miller, Marc Benayoun, and Theodoros Kitsakos, respectively.

The signing cermenomy took place in Rome following a meeting between Miller and Federica Guidi, Italy’s economic development minister.

The Greek Foreign Ministry’s Secretary General for International Economic Relations, Giorgos Tsipras, a cousin of Greek Prime Minister Alexis Tsipras, attended the signing ceremony.

The memorandum of understanding, indicating an intended common line of action, reflects the interest of all three sides to develop infrastructure that may carry Russian natural gas through the Black Sea, via transit countries, to Greece and then Italy.

The interested parties plan to utilize, to the greatest degree possible, work already completed by DEPA and Edison for the sidelined ITGI Poseidon project.

DEPA and Edison had originally established Poseidon as a joint venture in the previous decade to develop the ITGI pipeline, planned to carry Azeri natural gas from Turkey to Greece and then Italy, via a submarine crossing through the Adriatic Sea. However, the the plan was abandoned after Azerbaijan opted to develop the TAP (Trans-Adriatic Pipeline) project instead for this purpose.

“The revival of the ITGI Poseidon project reinforces Europe’s energy security with an additional supply route and upgrades Greece’s important role as a significant natural gas gateway, via diversified sources and routes,” remarked Kitsakos.

Sefcovic stresses Greece’s regional gas hub potential

Greece promises to play a crucial role in European natural gas supply as a result of current regional developments linked to the natural gas sector, Maros Sefcovic, the European Commission’s vice president, has pointed out in an interview with EurActiv.com.

Sefcovic, who said he is scheduled to visit Greece on March 10 as part of an Energy Union tour, pointed out that the country is set to play a vital gas transit role.

“The Southern Gas Corridor should bring the new Caspian gas to Europe before 2020, and this pipeline goes through Greek territory. We see very interesting developments in the Eastern Mediterranean, with gas fields discovered around Cyprus, close to Israel, and close to Egypt. Europe could become a destination of this gas, and again, Greece would play a very important role,” Sefcovic was quoted as telling EurActiv.com.

He added that details on the IGB interconnector between Bulgaria and Greece are currently being worked on amid a very positive climate.

“That would be a very important gateway for the new supplies which will be coming to Europe from the Caspian, but also from the Mediterranean, for shipping them north to Bulgaria and the western Balkan countries. These are, of course, projects we will discuss once in Greece,” Sefcovic noted. He added that, based on updates from Greece’s energy minister Panos Skourletis, the IGB will be built on time and Greece will be able to profit from its geographical location and become a crucial transit country for gas entering from at least two directions.

Asked to comment on the continued dominance of main power utility PPC in Greece’s electricity market, still a monopoly, according to the interviewer, Sefcovic responded: “I’m sure the current Greek government has so many issues to deal with. They have to focus based on their priorities.”

Existing gas infrastructure must be better utilized, M&M chief tells

Until now, Greece’s goal of becoming a regional gas hub has been based on the prospect of developing new infrastructure projects but, in actual fact, the most important objective should be to better utilize existing facilities such as the Revythoussa LNG terminal on the islet just off Athens, being utilized at a level of 15 percent, and also to create appropriate conditions for a liberalized market in which consumers may have access to the supplier of their choice, Panagiotis Kanellopoulos, chief executive of M&M Gas, a wholesale trading venture involving the Mytilineos Group and Motor Oil Hellas, has stressed at the Athens Energy Forum.

Kanellopoulos pointed out that although conditions provided by both Greece and DEFSA, the gas grid operator, are ready to fulfill consumer needs for importing natural gas through pipelines from the country’s northern borders, the needed legal infrastructure for such an initiative does not exist in Bulgaria. The official added that a small section of pipeline infrastructure linking Bulgaria with Romania has yet to be constructed, depriving the region from access to central European markets.

The market will determine which new infrastructure projects are truly needed and sustainable, the M&M Gas chief told the energy event.

Both the Greek and regional Balkan market are small, but clever ways need to be found to utilize the exisiting infrastructure and increase their usefulness, Kanellopoulos noted.

EU pushing IGB plan regardless of market test result

Bulgarian energy minister Temenuzhka Petkova’s recent assurance that construction of the IGB Greek-Bulgarian Interconnector gas pipeline will begin in October of this year and the project will be launched in the second half of 2018 certainly came as a surprise for certain authorities, given that the preliminary stage of a new market test being conducted, to check the project’s feasibility, has yet to be completed.

However, this declaration by the Bulgarian minister did not raised the eyebrows of officials closely following the IGB-related developments in Brussels. For them, it has become clear that the European Union wants the project to progress, and is making an additional effort to assure this is achieved. According to energypress sources, moves are being made for further EU financial backing of the project, which has already been classified as a Project of Common Interest (PCI), a status that guarantees EU funding.

According to some pundits, the IGB project will be developed even if the new market test does not produce favorable results. Ideally, a sufficient number of gas trading companies will commit themselves to a certain level of orders that would ensure the pipeline project’s sustainability. Even so, the market test stage, which follows the recent final investment decision agreed to by Greece and Bulgaria, is important, including symbolically.

The test’s first stage, entailing declarations of non-binding interest, will be completed on February 29. The second stage, to involve binding offers from traders, is expected to be finalized around April.

A first market test, conducted between May, 2013 and September, 2014, failed to produce satisfactory results. But the final investment decision was signed as a result of the major emphasis being placed by the EU on the project, which will reinforce the region’s energy security and break Russian gas supplier Gazprom’s dominance. The US has also heavily backed the project.

Based on preliminary estimates, the project’s budget is estimated at 240 million euros, of which 220 million euros concern construction costs, while its annual operating cost is estimated at 4.5 million euros. Signalling this infrastructure project’s importance, the European Commission has committed 45 million euros of furnding for the IGB’s development.

Poseidon SA, a venture formed by Italy’s Edison and DEPA, Greece’s Public Gas Corporation, holds a 50 percent stake in the consortium established to construct and operate the IGB pipeline. Bulgarian state-run company BEH holds the other 50 percent of the IGB consortium.

The IGB pipeline is planned to run from Komotini, in Greece’s northeast, to Stara Zagora in Bulgaria, for a total length of approximately 170 kilometers.

Gas pipelines at the core of Tsipras, Biden talks in Davos

Greece’s economic program, the refugee crisis, cooperation with the US, especially in investments and energy, the Cyprus problem, as well as the name dispute concerning the neighboring Former Yugoslav Republic of Macedonia (Fyrom) were all discussed at a meeting between Greek prime minister Alexis Tsipras and US vice president Joe Biden at the annual World Economic Forum, now taking place in Davos, Switzerland.

Recent agreements reached to pave the way for the development of the TAP (Trans Adriatic Pipeline) and IGB (Greece-Bulgaria Interconnector) natural gas pipeline projects were praised during the talks, while the potential to supply LNG to other parts of Europe via Greece was also discussed. Greece’s role as a prospective regional energy hub was also on the agenda.

The US vice president stressed that stability in Greece is crucially important for wider stability in Europe, according to a statement released by the Greek prime minister’s press office. Swift completion of the next review of Greece’s bailout program is necessary to help propel the country towards economic recovery, the two officials agreed, according to the statement.

Tsipras hailed initiatives taken by the US vice president for closer economic ties between Greece and the US as well as the latter’s promotion of US investments in Greece.

 

Energy ministry endorses TAP project’s local route

The TAP (Trans Adriatic Pipeline) project’s local segment, to run through northern Greece and cover thirteen regions, has been endorsed by the energy ministry, it announced.

The TAP pipeline, to supply Azeri natural gas to central Europe via Greece, Albania, and Italy, will cross through the Greek regions of Evros, Drama, Kavala, Xanthi, Rodopi, Imathia, Thessaloniki, Kilkis, Pella, Serres, Kastoria, Kozani, and Florina.

“The delivery of the Installation Act represents another important step in the development of the TAP natural gas pipeline, currently included in a catalogue listing the world’s ten most significant projects in progress,” the ministry statement noted.

The natural gas pipeline’s construction and operation promises numerous benefits for Greece, including an employment boost to be provided by both direct and indirect jobs linked to the project, estimated at roughly 10,000 in total; the involvement of Greek companies in the project’s construction; as well as local supply of equipment and building materials, the statement added.

The TAP project wll help diversify Europe’s natural gas supply sources and pipeline routes, considered crucial for energy security and sufficiency throughout the EU, including Greece, the ministry noted.

The project also promises to boost Greece’s geopolitical position, offering benefits for the national economy, and, as a result, contribute to the overall effort being made for the country’s economic recovery, the ministry statement added.

Bulgaria mulls doubling IGB capacity ahead of market test

The Bulgarian government is now envisioning the prospective IGB (Interconnector Greece Bulgaria) pipeline as a main gas supply route that may cover both its domestic needs as well as those of the neighboring markets of Romania, Serbia, the Former Yugoslav Republic of Macedonia (Fyrom), and even Ukraine, traditionally entirely dependent on Russian supply.

As a result, Bulgarian officials are examining the prospect of doubling the IGB pipeline’s annual capacity from five billion cubic meters – it will begin operating at three billion cubic meters before being increased to five billion cubic meters – to ten billion cubic meters.

The thoughts of increasing capacity precede the upcoming results of a new market test that will show the gas pipeline’s guaranteed consumer demand level, which will indicate whether the project is economically feasible. The market test result is due at the end of February. These early thoughts of a capacity increase indicate that Bulgarian officials see great potential in the IGB project.

The troubled biltareral ties between Russia and Ukraine and threat of a cut in the Russian supply route to Ukraine has increased the emphasis being placed on the role that may be played by the IGB pipeline in the wider region. Russia has announced it will cut supply to Ukraine in 2019.

If so, Bulgaria plans to make available gas supply running through the IGB pipeline, stemming from the TAP (Trans Adriatic Pipeline) project to carry Azeri natural gas to Europe, as well as US gas via the prospective LNG terminal in Alexandroupoli, northeastern Greece, and other sources, including the LNG terminal in Revythoussa, an islet in the Saronic Gulf, close to Athens.

The IGB project is expected to be completed in 2018. If the thoughts of Bulgarian officials to double its capacity are actualized then a capacity increase of the LNG terminal being planned by Gastrade for Alexandroupoli will certainly follow.

For the time being, a new market test needs to be completed following the recent final investment decision. A first test conducted between May, 2013 and September, 2014 failed to produce satisfactory results.

The project’s budget is estimated at 240 million euros, of which 220 million euros concern construction costs, while its annual operating cost is estimated at 4.5 million euros. Signalling this infrastructure project’s importance, the European Commission has committed 45 million euros of furnding for the IGB’s development.

Poseidon SA, a venture formed by Italy’s Edison and DEPA, Greece’s Public Gas Corporation, holds a 50 percent stake in the consortium established to construct and operate the IGB pipeline. Bulgarian state-run company BEH holds the other 50 percent of the IGB consortium.

The IGB pipeline will run from Komotini, in Greece’s northeast, to Stara Zagora in Bulgaria, for a total length of approximately 170 kilometers.

The main purpose of the IGB pipeline will be to break Bulgaria’s virtual full dependence on Russian natural gas supplied by Gazprom. US State Department officials have expressed great interest in the project’s development, as they have made clear on every recent official visit to Greece. A series of visits were made by US officials to the region last October and November. Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, prepared the ground for an ensuing visit by Secretary of State John Kerry. Also, Greek Prime Minister Alexis Tsipras was in New York City last September, where he met with Kerry.

Construction of the IGB project is scheduled to begin in the second half of this year and is expected to be ready to operate in the second half of 2018.

Regional trouble can endanger local gas supply sufficiency

Greece may face a difficult remaining winter season in terms of natural gas sufficiency if temperatures drop in the wider region as a result of Russia’s bilateral tensions with Turkey and Ukraine, both crucial supply routes.

In recent years, Botas, the Turkish state-run crude oil and gas company, has both severely limited and turned off the tap for gas supply to Kipous, northeastern Greece, when temperatures plunge so as to ensure the neighboring country’s domestic needs. These periods usually last a few days and Russia, until now, has typically stepped in with greater supply towards Turkey, helping normalize supply conditions in the region.

However, such back up from Russia is considered impossible at present considering the poor bilateral ties between Moscow and Ankara. Consequently, it remains unknown for how long Botas will stop supplying Greece if temperatures plunge to considerably boost natural gas consumption needs in the region.

Botas and DEPA, the Public Gas Corporation, have signed an agreement stating that non-delivery of contracted quantities may activate penalty-related clauses. If Turkey fails to comply, it will need to specify the reasons.

The situation could worsen for Greece if a halt from the Turkish-linked Kipous supply point coincides with the closure of taps at the northern entrance, in Bulgaria, the main supplier of Russian natural gas to Greece. Such a development cannot be ruled out if tensions between Russian and Ukraine, which affect Russian Gazprom’s supply to Ukraine’s Naftogaz, are not appeased.

Russia appears determined to not continue supplying natural gas to Ukraine if Kiev does not provide substantial deposit amounts, judging by public comments made by Russian officials. Ukraine’s alternative, to absorb natural gas from its western European neighbors, is not an unlimited option as these countries will not possess excess amounts to export if weather conditions worsen and their own needs increase.

The pipeline that carries Russian natural gas to the south for supply to the wider region, including Greece, and passes through Ukraine is different to the one facilitating Russian supply to Ukraine. If Russia closes the tap on Ukraine, as it has done in the past, then Ukraine, if faced by gas shortages of its own, will surely draw from the transit pipeline intended for the southern countries.

Local authorities, in comments offered to energypress, have confirmed that a combined supply problem from the east and north may threaten sufficiency levels in Greece. This would pose a threat to electricity generation as substantial local power amounts are produced at gas-fueled stations.

However, the crisis would need to persist for a prolonged period if it is to cause gas supply problems in Greece. The country’s LNG terminal in Revythoussa, an islet in the Saronic Gulf, close to Athens, is equipped to store increased amounts, which would offer crucial support.

 

 

New utility for grounded ‘Turkish Stream’ is unnecessary

A parliamentary committee responsible for public utilities is preparing to appoint the administration of DEPENE, a new public utility established by the government’s ex-energy minister Panagiotis Lafazanis in order to represent the Greek state in investments concerning construction and management of natural gas pipelines, other infrastructure, as well as participation in companies active in related fields.

Turkish Stream, Russia’s most recent natural gas pipeline proposal planned to run westward from the Greek-Turkish border area and across Greece, whose prospects are currently grounded, was a key factor behind the new public utility’s establishment. The formation of the utility now appears unnecessary.

At the time of DEPENE’s establishment, Lafazanis – the former energy minister who ended up quitting Syriza last summer to form his own anti-eurozone party, Popular Unity, which has not made Parliament – had declared the Russian gas pipeline would generate two billion euros of revenues for the Greek state and 20,000 new jobs.

Although such prospects appear to have all but vanished, his successor, energy minister Panos Skourletis, is determined to press on with the new utility, presumably so that the Greek state will be prepared should the Turkish Stream plan be revived.

Besides its possible role in Turkish Stream, DEPENE is soon expected to also acquire a wider role in Greece’s hydrocarbon interests, making it the second company to be established for this purpose following EDEY, the Greek Hydrocarbon Management Company, the difference between the two being that DEPENE will be able to participate as a shareholder in research and production investments for oil and gas.

It remains questionable how capable the Greek state is to take part in high-risk ventures amid the adverse market conditions and subdued hydrocarbon research and production activity, worldwide, as a result of fallen crude prices. Also, exploration and exploitation tenders that have either been completed or are in progress cannot be revised to create a role for DEPENE.

The parliamentary committee responsible for public utilities is scheduled to convene on January 8 to consider the proposals forwarded by Skourletis, the energy minister, for the administrative posts at DEPENE, to be run by a seven-member board.

Antonis Georgopoulos has been proposed for the chairman’s post, Eleni Zafiropoulou as his deputy, and Argyrios Argyriou as managing director.

 

Greek PM’s realpolitik helped pave the way towards IGB deal

The Syriza coalition’s more recent realpolitik approach to energy matters, a far cry from former energy minister Panos Lafazanis’s obsession focused on nurturing closer ties with Russia, helped pave the way towards yesterday’s deal struck between Greece and Bulgaria on a final investment plan for the construction of the IGB natural gas pipeline interconnector.

The US played a key intermediary role over the past couple of months, initially through the efforts of Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, who recently visited the region, followed by Secretary of State John Kerry, who was in Athens last week. Both visits had been preceded by Greek Prime Minister Alexis Tsipras’s trip to the US in September, where he and Kerry held talks.

Yesterday’s highly anticipated deal, one of strategic importance and much delay, was signed in Sofia by Bulgarian Energy Holding and Greece’s IGI Poseidon.

The project is scheduled to interconnect the grids of both nations in 2018, initially serving as a supply route for Azeri natural gas, to reach Europe via the Greek segment of TAP, the Transadriatic Pipeline, as well as a route for US shale gas exports to be transported to a prospective LNG terminal in Alexandroupoli, northeastern Greece, in the form of LNG, before being distributed in Greece and the wider region.

However, the project’s sustainability will need to be confirmed through a sufficient number of consumers committed to long-term gas contracts before construction of the IGB interconnector can begin.

The IGB project is being heavily backed by the US, which wants to weaken Russia’s energy-sector dominance in the wider region and penetrate the market with American shale gas exports. The EU is also supportive. It will offer 48 million euros for the construction of the project, classified as a Project of Common Interest (PCI).

Greece also stands to gain as development of the IGB, along with the TAP project – to run roughly westward through Azerbaijan, Turkey, Greece, Albania, and across to Italy – and the prospective LNG terminal in Alexandroupoli, will all combine to offer the country major financial and geostrategic benefits that could establish Greece as a European natural gas hub.

If the IGB’s sustainability is secured over the next few months, as is scheduled, construction will begin in the second half of 2016, while the pipeline will be ready to operate in the second half of 2018, according to Greek energy minister Panos Skourletis.

The IGB pipeline is planned to run 182 kilometers, from Komotini, northeastern Greece, to Stara Zagora in Bulgaria. Its initial capacity will measure three billion cubic meters, annually, while provisions will be made for a future increase to five billion cubic meters.

Greece interested in ‘European gateway role for Cypriot, Israeli gas’

Greece is interested in serving as a gateway for Cypriot and Israeli natural gas supply to Europe, either through tankers transporting supply from export stations operated by the two neighboring countries, as well as Egypt, or through a direct East Med submarine gas pipeline link, Greece’s energy minister Panos Skourletis noted in a written statement prepared for the 4th edition of the Energy Symposium in Cyprus. The minister’s note was read at the event by an official of the Greek Embassy in Cyprus.

Greek is striving to establish itself as an energy hub in southeast Europe and the east Mediterranean to contribute to the region’s energy security, the minister’s note added, while adding that heightened activity leading to this objective has been observed in the region lately.

Greece is seeking to play a central role as a regional hub, while the development of the IGB Greek-Bulgarian pipeline interconnection; the TAP (Trans Adriatic Pipeline), to supply Azeri natural gas to Europe via Greece; a prospective LNG terminal in Alexandroupoli, northeastern Greece; and Russia’s new gas pipeline proposal for the Southern Corridor, envisioned to run westward through northern Greece and across to Italy, are all  key components of the overall plan, the minister noted.

The minister’s note added that the East Med pipeline, to be comprised of a network of submarine and overland infrastructure offering a direct link for deposits in the southeast Mediterranean area with the European gas network via Greece, is another crucial element in the plan to establish Greece as a new regional energy hub.

Skourletis’s note highlighted that the discovery of natural gas deposits in the sea region between Cyrpus, Israel, and Egypt promises to alter the region’s geopolitical standing and establish a central role for Cyprus on the southeast Mediterranean’s energy map.

Utilization of Greece’s renewable energy potential could greatly contribute to the diversification of the country’s energy mix, and also offer energy security, and environmental protection, the minister’s note added.

The two-day event, whose theme this year was “Energy: Time for Decisions”, concluded yesterday.

 

 

Kerry expresses US support for TAP, IGB pipeline projects

US Secretary of State John Kerry, in Athens today for meetings with Greek Prime Minister Alexis Tsipras and the Foreign Minister Nikos Kotzias, reiterated Washington’s support for the TAP (Trans Adriatic Pipeline) and IGB natural gas pipeline projects during a joint news conference with Kotzias, his Greek peer.

The TAP pipeline will run through Greece to carry Azeri natural gas into Europe. The IGB gas pipeline will interconnect the Greek and Bulgarian systems.

The American diplomat made note of Greece’s rising role in European energy security, while stressing energy diversification represents a common objective for both the US and its European partners.

Kerry praised the resilience of the Greek people and declared the US is supporting Greece’s path towards economic recovery.

The US Secretary of State, who had met with the Greek prime minister prior to the news conference, noted Tsipras expressed a strong interest for foreign investments in Greece. Kerry promised to relay this message to the investment community abroad.

Kotzias, Greece’s Foreign Minister, spoke of the strong traditional ties shared between Greece and the USA, decribed Kerry as a very formidable Secretary of State, while adding that the Greek diaspora in the US serves as a bridge linking the two nations.

The Greek minister also acknowleged the helpful contribution offered by the US to Greece in the country’s negotiations with lenders.

The US is interested in supplying Europe with LNG shale gas. Greece and Croatia, among others, are planned to serve as distribution points in this initiative.

Work is underway to increase the capacity of Greece’s exisiting LNG terminal station in Revythoussa, an islet in the Saronic Gulf, close to Athens. The construction of a second Greek LNG station in Alexandroupoli is of even more crucial importance to the US supply plan for Europe. The facility would be connected to the IGB pipeline and, besides Greece, would supply American LNG to the Bulgarian market as well as other countries in the region, all currently heavily dependent on Russian gas.

 

EU must support gas infrastructure projects, energy minister tells peers

The EU’s energy union strategy needs to place emphasis on Projects of Common Interest (PCI) such as development of LNG stations in southeast Europe, the Southern Gas Corridor, for gas supply from the Caspian and Middle Eastern regions, the vertical route and interconnection projects with Bulgaria, Albania, and Italy, the country’s energy minister Panos Skourletis has told peers at an EU council meeting of energy ministers.

The benefits of energy union need to be spread to less interconnected areas, Skourletis noted, while also stressing natural gas deposits in the east Mediterranean must be utilized.

The Greek energy minister updated his fellow EU energy ministers on local developments concerning the TAP (Trans Adriatic Pipeline) and IGB (Greek-Bulgarian interconnector) projects.

Skourletis also met with the European Commissioner for Climate Action and Energy Miguel Arias Canete on the sidelines of the meeting, discussing the TAP and IGB developments.

Greece’s request for free carbon emission rights in electricity production, as a measure offering support to the recession-struck country, was also discussed by the two officials.

EU member states whose GDP measures less than 60 percent of the EU average are entitled to free CO2 emission rights.

PM: Greece, Israel can work closer on energy, tourism

Bilateral ties between Greece and Israel have been upgraded in recent years but potential still exists for further development of mutual interests in the sectors of tourism, energy and culture, Prime Minister Alexis Tsipras told a news conference in Jerusalem yesterday, the opening day of an official two-day visit to Israel, following a meeting with Israeli peer Benjamin Netanyahu.

Commenting on the bilateral energy prospects, Tsipras expressed interest in Israel’s natural gas export prospects. Tsipras noted Greek and Israeli energy sector authorities would continue working on mutual interests, while a three-way meeting would be arranged to also include the participation of Cypriot president Nikos Anastasiadis.

The Leviathan gas field, off the coast of Israel, is now set to be exploited, which could establish Israel as a major energy player in the Middle East.

Netanyahu, who took part in the joint news conference, made note of the deep friendship binding the two nations, while also expressing hope for a Greek economic recovery.

During their meeting, Tsipras and Netanyahu also discussed the turmoil in the Middle East, focusing on the dangers entailed in the spread of Islamist extremism as well as the need for an end to the Syrian civil war.

French ITGI backing revitalizes ‘Turkish Stream’ prospects

The Russian-Turkish natural gas pipeline plan envisioned to also cross through Greece, a possibility that seemed unrealistic just several months ago during the tenure of the country’s former energy minister, Panagiotis Lafazanis – an anti-eurozone advocate who went on to form his own radical leftist party – has now emerged as a solid prospect, as was noted by energy minister Panos Skourletis yesterday, for the first time. France’s lobbying in support of the project’s development has been pivotal to the apparent shift.

Most recently, the plan has received heavy French support, both political and corporate, through President Francois Hollande and EDF-Edison, respectively. French support has promoted developing the pipeline through EU territory, exclusively, from the Greek-Turkish border area, across northern Greece to the country’s west, where it could be linked to the neglected Greek-Italian ITGI pipeline. Development of the ITGI project, approved in the past by the European Commission, is now also being brought back into the picture as a result of the role it could play in connection with the Russian-Turkish pipeline.

A previous plan for the Russian-Turkish pipeline’s crossing into central Europe envisioned a vertical route cutting through the Balkans, from Greece, the Former Yugoslav Republic of Macedonia (Fyrom), Serbia, and Hungary.

The French corporate group EDF has lobbied hard in Brussels over the past few months, supporting  the change of plan favoring a route across northern Greece and over to Italy. EDF has stressed Italy will comprise part of the route, while also noting the endorsed yet forgotten ITGI plan, dating back to the previous decade, could finally be actualized.

Of course, Russia and Turkey will need to overcome certain differences if the project is to stand a chance of progressing. Russian sources believe the impasse is manageable, while Greek officials estimate the project can progress.

A visit by Gazprom’s CEO Alexey Miller to Milan for a meeting with Edison’s managing director Bruno Lescoeur one month ago injected new momentum into the Russian-Turkish pipeline’s prospects.

 

 

Natural gas prospects to top PM’s agenda for visit to Israel

Prime Minister Alexis Tsipras is scheduled to travel to Israel tomorrow with energy interests at the top of the official visit’s agenda ahead of a three-way meeting between the leaders of Greece, Cyprus and Israel.

Tsipras is expected to be joined by Foreign Minister Nikos Kotzias, Deputy Infrastructure, Transport and Networks Minister Hristos Spirtzis, State Minister Nikos Pappas, and government spokeswoman Olga Gerovasili.

The trip, to include the Greek Prime Minister’s first official visit to Jerusalem, tomorrow, and Ramallah on Thursday, will offer participating officials the opportunity to discuss latest developments concerning the utilization of deposits in the east Mediterranean and natural gas export plans.

Tsipras is scheduled to hold a meeting with Israel’s Prime Minister Benjamin Netanyahu in Jerusalem, while meetings have also been planned to take place with President Reuven Rivlin, the country’s energy minister, and the opposition leader.

The Greek team intends to be informed by Israeli officials on the country’s natural gas export plans as well as its views on the strategic partnership with Greece and Cyprus, based on the region’s latest energy developments, such as the discovery by Eni of the enormous Zohr offshore natural gas field in the Egyptian sector of the Mediterranean, as well as the BG Group’s 35 percent holding, announced today, of a Cypriot offshore area, Block 12, which includes the Aphrodite gas discovery.

Tsipras and Netanyahu are expected to confirm the positive bilateral ties countries developed between Greece and Israel over the past few years, while also making clear this path will continue with Syriza at Greece’s helm.

Israel is currently examining its natural gas export options, which include transport to Cyprus and export through East Med – a planned pipeline to be comprised of a network of submarine and overland infrastructure offering a direct link for deposits in the southeast Mediterranean area with the European gas network via Greece – or a new LNG station; transport to Turkey; and transport to Egypt followed by export through the country’s LNG stations. These options all have their pros and cons. Athens is following the developments and maintaining an interest to possibly play a role in one of these chains.

The BG Group’s holding in Aphrodite has reportedly increased the prospects of the third Egypt-linked option being chosen, as has also been confirmed by Nicosia.

Egypt’s possible role as a fourth member in the regional geopolitical partnership involving Greece, Cyprus, and Israel will also be discussed during the Greek delegation’s visit to Israel.

‘Greek Stream’ has political support, Russian deputy says

Russia’s latest proposal for a natural gas pipeline in southeast Europe, being refered to as both “Turkish Stream” and “Greek Stream” and envisioned to run from the Greek-Turkish border across northern Greece all the way to the country’s northwest, was extensively discussed last Friday in Athens during an official visit by Russian Deputy Prime Minister Arkady Dvorkovich and Greek Prime Minister Alexis Tsipras, while it was agreed for Greece’s energy minister Panos Skourletis to soon visit Moscow for further talks, Russian media has reported.

The visit by Dvorkovich preceded a Joint Ministerial Committee between Greece and Russia to be held in Sochi today and tomorrow.

Besides his talks with the Greek Prime Minister, the Russian deputy head also held talks with a series of other leading local officials, including Skourletis, Agricultural Development Minister Evangelos Apostolou, and TAIPED (State Privatization Fund) president Stergios Pitsiorlas, paving the way for negotiations between the two countries.

Dvorkovich told Russian daily Rossiyskaya Gazeta that it was agreed, last Friday in Athens, by both sides to “intensify the work of the Joint Ministerial Committee with the aim of finding practical solutions to exisiting problems in the fields of energy, transport, and agriculture,” while adding that Gazprom and Russian Railways will be involved.

The Russian deputy also said he requested additional information on Greek privatization tenders, adding this front would be further processed at the Joint Ministerial Committee, today and tomorrow.

Commenting on the prospects of developing “Turkish Stream” through Greek territory, Dvorkovich said the matter was discussed with the Greek Prime Minister and has political support.

According to Russian news agency Ria Novosti, Skourletis, Greece’s energy minister, will visit Moscow within the next few days for further talks with his Russian counterpart Alexander Novak.

TAP consortium, energy ministry strike pipeline deal

Negotiations between Greece’s Environment and Energy Ministry and the TAP (Trans Adriatic Pipeline) consortium have essentially been completed with the latter agreeing to improve its initial offer’s terms.

According to sources, the TAP consortium has agreed to roughly double the amount offered for various local projects along the pipeline’s route, as part of its corporate social responsibility program. Initially, the amount  offered ranged between 12 million and 16 million euros, but the consortium has now committed itself to providing 32 million euros.

Also, details concerning compensation packages to be offered by the TAP consortium to the Greek state for forest areas and public land required for the pipeline’s development have also been resolved and finalized.

The agreements reached for all these issues, as well as another overcoming local environmental concerns, essentially pave the way for construction work on the TAP project to commence.

The TAP pipeline will run across nothern Greece, through Albania, and reach Italy via the Adriatic Sea to supply Azeri natural gas to central Europe.

 

 

‘Turkish Stream’ not good as ‘Greece would become a gas hub’

Development of Russia’s latest pipeline proposal for southeast Europe, dubbed “Turkish Stream” and envisaged to run from the Greek-Turkish border area across northern Greece for a link with Italy would establish Greece into a gas hub and this would not be in the interests of Turkey, Volkan Ozdemir, chairman at EPPEN, the neighboring country’s Institute for Energy Markets and Policies, contended during a speech at an Athens conference organized by IENE, the Institute of Energy for South-East Europe.

Although the project would offer Turkey certain benefits as a transit country, it would rival TANAP, the Trans Anatolian Natural Gas Pipeline, and is therefore not seen as a particularly attractive prospect in Turkey, Ozdemir noted. Negotiations between Russia and Turkey on the “Turkish Stream” proposal have stagnated.

While making note of the importance of the “energy triangle” comprised of the EU, Russia, and Turkey, Ozdemir highlighted his country’s geopolitical significance, saying the country links energy consuming countries with producing countries. This alone establishes Turkey as hub in the wider region, the Turkish official noted. However, he admitted Turkey is highly dependent on Russia and Iran as its main energy suppliers.

Commenting on Turkey’s gas market, Ozdemir said Botas, Turkey’s state-owned crude oil and natural gas pipelines and trading company, may control an 80 percent share of the country’s supply market, but a further eight private companies share the gas market’s other 20 percent.

Progressive national energy strategy needed, ex-minister notes

The country needs to pursue a progressive, open-minded national energy strategy with a European direction, Yiannis Maniatis, Greece’s former energy minister, who held the portfolio in the pre-Syriza coalition, has told an Athens conference organized by IENE, the Institute of Energy for South-East Europe.

Major energy-sector initiatives taken, at bilateral levels, by the previous coalition, which was led by the conservative New Democracy party, concerning projects such as the IGB (Greek-Bulgarian interconnector), the Vertical Corridor, and East Med, to offer a direct link for gas deposits in the southeast Mediterranean area with the European gas network via Greece, need to be continued, Maniatis told the conference.

 

 

Consumer interests a key factor in energy policy, official notes

The interests of consumers, until now insufficiently covered, will stand as a key factor in the energy sector policy of the government, which is aiming for a fairer system and is committed to adopting EU framework guidelines, Nikos Kaimaikis, an advisor to energy minister Panos Skourletis, has told an Athens conference organized by IENE, the Institute of Energy for South-East Europe.

Kaimakis, who represented the minister at the event, noted priorities will be given to the renewable energy source (RES) sector, whose new operational framework is currently being prepared, as well as the further penetration of natural gas in the Greek market. LNG will play an increasingly important role in this market, the official said.

Commenting on the significance of the East Med pipeline, to offer a direct link for gas deposits in the southeast Mediterranean area with the European gas network via Greece, Kaimakis described the project as a top-priority item.

He also stressed that current tenders offering hydrocarbon block licenses in Greece need to be completed so that deposits may start being utilized.

TAP construction work expected to begin in April, consortium says

Construction work on the TAP (Trans Adriatic Pipeline) project, the largest foreign investment to be made in Greece over the past few years, valued at over 1.5 billion euros, is expected to begin next April, consortium officials believe.

Private capital is being provided by the TAP consortium’s six energy giants for the pipeline project’s construction, to supply Azeri natural gas through northern Greece, Albania, and across the Adriatic Sea to Italy,  linking the country’s gas infrastructure with central Europe.

BP, Azerbaijan’s Socar, and Norway’s Statoil each hold 20 percent stakes in the consortium, Belgium’s Fluxys is represented with a 19 percent share, Spain’s Enagas has 16 percent, and Swiss company Axpo holds a five percent stake.

Tenders for the project’s construction and supply of pipelines are currently in progress. German steel and technology group Mannesmann has already secured one of the project’s local contracts.

Greek construction and industrial groups that have submitted bids are optimistic of securing contracts, believing they have submitted extremely competitive offers. Participating local pipeline producers, such as Corinth Pipeworks, hold a considerable advantage over foreign competitors for the TAP project’s supply of pipelines as a result of their geographical proximity and the significantly lower transportation costs entailed.

Certain regional licensing issues still need to be resolved before the TAP consortium is given the green light for construction work to begin. Even so, all sides involved in the project, including Greece’s energy ministry, expect the ongoing negotiations will conclude favorably and allow work to commence.

Meanwhile, the region’s rival pipeline project being promoted by Russia to cover southeast Europe, dubbed “Turkish Stream”, has run into problems as a result of objections raised by Turkey over the project’s Turkish segment, whose capacity and natural gas amounts to be carried have already been downsized. A next round of talks between Russian and Turkish officials, now at a standstill, are expected early in 2016.

The US Energy Information Administration (EIA) recently characterized the project’s prospects as uncertain, despite a political agreement already reached between Russia and Turkey, whose intentions for the project are currently unclear. The US, aiming to lessen Europe’s dependence on Russian natural gas, has not embraced the “Turkish Stream” proposal. The EU appears to have hesitantly backed the US position.

Aktor, Avax consortiums close to TAP construction deals

Two of three construction contracts to be offered for the local segment of the TAP (Trans Adriatic Pipeline) project – to cross through northern Greece, Albania, and through the Adriatic Sea to Italy – are expected to be awarded to a consortium comprised of Ellaktor and French company Spiecapag, while the third contract seems headed for a consortium involving J&P Avax and Italian contractor Bonatti, according to sources.

The same sources noted that Hellenic Pipeworks, a member of the Viohalko metallurgical group, is close to securing a supply deal for all three sections of the TAP pipeline’s Greek segment. German company Mannesmann had secured a preceding supply deal.

Sector officials noted the Ellaktor-Spiecapag consortium is also vying for a section of the project within Albania, while GEK Terna is negotiating to secure a contract for the project’s compressor stations.

Each contract of the project’s three local sections is worth about 230 million euros. Besides the aforementioned consortiums, the international tender for construction of the TAP project’s Greek segment, amounting to 550 kilometers of pipeline infrastructure, also drew offers from a consortium made up of GEK Terna, Germany’s Max Streicher GmbH and Belgium’s Denys, as well as a consortium made up of Metka, a member of the Mytilineos corporate group, and two Italian companies, Nuoava Ghizzoni SpA and Sicilsaldo SpA. These consortiums, with certain slight line-up changes, are also vying for parts of TAP’s Albanian segment.

As has been announced by TAP officials, construction work in Albania has already begun on roads and bridges to offer access for the pipeline’s construction.

The pipeline’s construction is scheduled to begin in 2016. It will stretch about 765 kilometers. The Albanian segment will measure 211 kilomteres and the Italian part 8 kilometers.

The project’s manager estimates that 15 construction teams will work concurrently on the pipeline’s development, each employing between 150 and 200 persons.

 

Updated PCI list for energy projects covering 2015 to 2017 ‘finalized’

The European Commission’s updated list of Projects of Common Interest (PCI) for the period covering 2015 to 2017 was finalized this week, the Greek Economy Ministry’s General Director for Strategic Investments, Nikolaos Agaliotis, told a business and investment forum, Natural Gas and Growth, in Athens today.

Agaliotis, who was in Brussels just days ago, informed the forum that the PCI list concerning locally linked energy infrastructure projects – PCI status ensures EU funding – is comprised of the IGB interconnector to link Greece and Bulgaria; an LNG terminal to be developed in Alexandroupoli, northern Greece, by DEPA, the Public Gas Corporation, and Gastrade, a company belonging to the Copelouzos corporate group; a DESFA (gas grid operator) natural gas compressor station; the TAP (Trans Adratic Pipeline) project; the Greece-Italy segment of the Poseidon (ITGI) pipeline; East Med, a prospective network of submarine and overland pipeline infrastructure to offer a direct link for deposits in the southeast Mediterranean area with the European gas network via Greece; and the local segment of the Tesla gas pipeline, planned to cross Turkey, Greece, the Former Yugoslav Republic of Macedonia (Fyrom), Serbia, and Hungary, before ending at the Baumgarten gas hub in Austria.

Tesla was a last-minute addition to the PCI list as a result of interest being expressed for the project’s development, Agaliotis noted.

The forum, a two-day event, concludes tomorrow.

Greece positive on US supply of LNG to region, official notes

The government feels positive about the prospect of LNG imports from the US, Giorgos Tsipras, the Greek Foreign Ministry’s Secretary General for International Economic Relations, noted earlier today at a two-day business and investment forum, “Natural Gas and Growth,” held in Athens. It concludes tomorrow.

The Greek official said the government is supportive of initiatives intended to diversify the country’s energy sources and establish multiple gas routes, but warned the US plan to also supply LNG to Croatia, as a supply base for the wider western Balkans, required careful strategic planning by Greece.

“The country has no reason to adopt geopolitical interests of third parties without any benefit for itself,” Tsipras remarked.

In the years to come, LNG will represent an “element of flexibility,” Tsipras remarked, while adding that Greece could become a key route.

A day earlier, Greek Energy Minister Panos Skourletis confirmed Greece is working on developing a floating LNG terminal in northern Greece, most probably in Alexandroupoli, and that the US is interested in supplying LNG to Greece’s north for wider distribution to the eastern Balkans.

Tsipras supported the idea of Greece becoming a regional hub for natural gas through the development of various pipeline routes in the region.

Tsipras said the Greek government is striving to reinforce the country’s energy security and providing support for  the development of the TAP (Trans Adriatic Pipeline) project, the IGB interconnector to link Greece and Bulgaria, Russia’s latest pipeline proposal for southeast Europe, dubbed Turkish Stream, as well as East Med.

 

Former Thessaloniki army base to serve as TAP logistics center

The TAP (Trans Adriatic Pipeline) consortium appears to have settled for a former military base on the northwestern outskirts of Thessaloniki, in the Menemeni area, to develop its logistics center, from where pipelines will be distributed to construct the infrastructure project’s Greek segment.

The location, formerly known as the Gonos military base, is directly connected by a railway line to Thessaloniki port.

The logistics center will be developed over a 10-hectare section of the former military base’s total expanse, measuring 60 hectares and owned by GAIAOSE, a state-run company managing railway-linked property that is also active in renewable energy source (RES) production.

The property’s other 50 hectares are expected to be developed as a trading facility for prospective use by Thessaloniki port.

Another military base in the wider area, the Kakiousis unit, was also considered for TAP’s logistics center, but the site in Menemeni was favored because of its railway connection to Thessaloniki port.

In the past, the former Menemeni military base was used to store military equipment, including ammunition, which will need to be cleared out before the property is handed over to the TAP consortium.

As a first stage, twenty hectares of the property will be cleared of all military equipment, ten hectares of which are planned to be used by TAP. The entire property is expected to be cleared away within 2016.

The TAP pipeline is planned to carry Azeri natural gas to central Europe via Greece’s north, Turkey, Albania and Italy, following an Adriatic Sea crossing.

 

Russia eyeing Greek-Italian route for regional pipeline plan

Following problems encountered in various European markets, Russia appears to be abandoning the idea of promoting the development of a natural gas pipeline to central Europe via a northbound Balkan crossing whose route would include Greece, the Former Yugoslav Republic of Macedonia (Fyrom), Serbia and Hungary. Instead, Russia’s new pipeline plan for the region is now focusing on an Adriatic crossing from Greece to Italy, an option that would utilize the stalled ITGI pipeline plan, already licensed for development.

The ITGI project was originally planned to carry Azeri natural gas to Italy, via Greece and Turkey, but its was left to a standstill after Azerbaijan opted for the TAP (Trans-Adriatic Pipeline) project, to cross Turkey, Greece’s north, and Albania to Italy, as its project of choice for the Southern Corridor.

Russian energy giant Gazprom’s CEO Alexey Miller held a meeting with Edison’s managing director Bruno Lescoeur and other highly-ranked company officials in Milan last week.

“Matters of existing and potential collaboration” especially “supply and growth prospects of natural gas infrastructure in Europe” were discussed, Gazprom noted in a brief statement following the meeting.

According to energypress sources, the two officials discussed possibilities concerning the Southern Corridor, including the plan for Russian gas supply through Greece to Europe.

The Gazprom chief’s decision to travel to Italy’s north for talks with the administration at Edison, holder of the key to the ITGI project, is indicative of the importance placed by the Russian company on this alternative plan for southeast Europe.

The Milan meeting was held in the wake of a series of meetings in Athens between local officials and senior US energy envoys, as well as a visit to Moscow by Giorgos Tsipras, the Greek Foreign Ministry’s Secretary General for International Economic Relations, who met with Russias’s Energy Minister Alexander Novak.

The US and EU are generally seeking to promote a plan that would lessen Europe’s dependence on Russian gas by supporting a diversification of sources.

The prospect of utilizing the already-licensed Greek-Italian pipeline project, which would be developed as an extension of Turkish Stream if the plan to carry Russian gas all the way to the Greek-Turkish border area is actualized, has been a core issue of these meetings.

The prospective ITGI project, as part of the wider Russian plan for the area, offers many advantages. Its progress would be swift. Besides the permit already granted, this project has been classified as a Project of Common Interest (PCI) by the European Commission, which would ensure EU funding for its development.

The Russian plan’s Greece-Italy segment would be controlled by Poseidon, a consortium comprised of DEPA, the Public Gas Corporation, and Italy’s Edison, a member of the French corporate group EDF. Both Italy and France have previously expressed strong support for the ITGI plan, and continue to firmly back its development.

It is widely believed that if the stalled ITGI project is revived, then its political backing by France and Italy – a country regarded as maintaining a pro-Russia stance in Europe – could create a strong front that may soften European Commission objections to Russia’s Turkish Stream plan.

Bringing France and Italy into the picture would also bolster the commercial prospects of Russia’s Turkish Stream plan.

 

US plan to supply Balkans with LNG spurring diplomatic activity

The flurry of recent and upcoming diplomatic activity between top-ranked Greek and US officials, energy matters being a key aspect, appears to be primarily driven by a plan for US supply of LNG to the wider Balkan region, sources have noted following last week’s official visit to Athens by Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs.

Besides certain announcements released last week to point out pending issues concerning the TAP (Trans Adriatic Pipeline) project, to supply mostly Azeri natural gas to Europe, as well as the need for swifter progress on the prospective Greek-Bulgarian IGB pipeline, sources have now revealed LNG gas supply by the US to the Balkan region stands as a major US interest that was raised by Hochstein in Athens last week. Both Greek and regional gas needs could be partially covered by imports of LNG from the US.

The Revythoussa facility, combined with the access to be offered by the IGB pipeline and a new Bulgarian-Romanian interconnection, will allow the US to supply the wider eastern Balkan region. It is believed a Croatian LNG station being developed in Adria is the likeliest distribution point for US supply to the western Balkans.

If all these plans are developed, the Balkan region will acquire an alternative gas supply source, independent of Russia, long before the TAP project is completed. Other gas source alternatives are also expected to become available to the region over the next few years. Iran is preparing to resume international trade in anticipation of the end of western-imposed energy and financial sanctions early next year. Supply from the east Mediterranean is also likely to grow substantially following the discovery of the Zohr deposit in Egyptian waters, the region’s largest offshore field found to date.

The prospects offered by these developments are important for the Balkans. The region’s reliance on Russia’s Gazprom for gas has created problems both in terms of regional energy security and price levels.

US Deputy Assistant Secretary for Europe and Eurasia Daleep Singh will be in Athens this week. Then, Assistant Secretary of State for Europe and Eurasia Victoria Nuland, who was in Athens in June, returns next week to pave the way for an upcoming official visit by Secretary of State John Kerry. Greek Prime Minister Alexis Tsipras made an official trip to the US just weeks ago.