gas pipelines

Italy’s Edison seeking to become ‘key player in Greece’

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Edison is committed to Greece’s electricity market and will strive to become a key player in the local market, the Italian energy company’s executive vice president, Roberto Poti, told an Economist energy conference in Athens today.

Poti noted that Greece needs to make the most of opportunities and establish itself as a European energy hub, adding that “we want to help Greece reach its energy and geopolitical objectives,” alluding to the government’s declared multi-dimensional energy policy aspirations for the country, which include support for all prospective natural gas pipelines headed towards Greece.

The Italian company official said Edison’s market involvement in Greece is significant, adding that “we want to expand our presence.”

The Edison official called for a market open to competition with a balanced inflow of players, warning that market irregularities would not attract new entries.

DEPA aiming to utilize all gas pipeline routes to Greece, CEO notes

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DEPA, the Public Gas Corporation, is aiming to utilize all possible natural gas pipeline routes reaching Greece’s borders, which would elevate the country’s role as a regional energy hub and offer it the ability to determine prices, the corporation’s chief executive, Spyros Paleogiannis, told an Economist energy conference in Athens today.

Paleogiannis reminded of the cash-flow problems currently plaguing the domestic market, while also presenting DEPA’s plans to extend networks and also offer gas supply to consumers in regions not linked to gas networks.

DEPA’s chief official underlined the corporation’s efforts being made to secure funds from the EU’s 315 billion-euro investment fund launched last November by European Commission president Jean-Claude Juncker.

Palegioannis added that DEPA’s plans were not being confined to the gas market but the wider energy sector.

He forecast that gas consumption in Greece this year would end forty percent below the level registered in 2008, at the onset of the country’s deep and ongoing recession.

Also participating at the conference, the former deputy energy minister Asimakis Papageorgiou called upon the government to protect energy-sector achievements made by the country’s previous administration. He described the government’s policies to date as the “ideoligization of energy security” and an “amateurish mistake”, noting that sector privatizations need to continue.

 

Lafazanis proposes EEZ treaty for entire Mediterranean

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Stressing the country’s importance on southeast Europe’s energy map during his speech at an Economist energy conference in Athens today, Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis, while offering a rundown of his ministry’s actions to date and priorities, reiterated that the government’s objective is to establish Greece as a multi-dimensional energy hub.

Lafazanis also stressed that exclusive economic zones (EEZ) for offshore blocks need to be fairly established for the entire Mediterranean basin, beginning with the Aegean Sea and its southeast side.

The energy minister noted that a wider EEZ treaty proposal would need to be made and signed by all Mediterranean countries, obliging them to fully adhere to international law and international law of the sea.

“Such a policy would stigmatize possessions and arbitrary maritime claims and isolate accountable states,” Lafazanis remarked, adding that international law was currently not being respected by Turkey in Cyprus’s occupied north, the Aegean Sea, and the eastern Mediterranean, as well as by Israel in Gaza and Palestinian territories.

The energy minister once again backed the government’s decision to pursue an independent and multi-dimensional energy policy, whose factors include support for the TAP (Trans-Adriatic Pipeline) project, to supply Azeri gas to Europe via Greece; a Greek-Bulgarian interconnection; Greek Stream, the local segment of Turkish Stream, Russia’s latest proposal for gas supply to Europe via the south; East Med; as well as power grid interconnections in the region.

“We are not a pawn and satellite for anybody,” Lafazanis remarked.

Responding to a question on Turkish Stream, a plan that has not been embraced by the EU and the US, Lafazanis noted that contracts for Russian gas supply to Greece, as well as a market for this supply, already exist. He added that Greece would not have any objections if the pipeline, planned to run north, through the Former Yugoslav Republic of Macedonia (Fyrom), were to also branch out to Italy in the west.

Lafazanis noted that the government favors market liberalization and a healthy form of free trade, while adding that “liberalization does not mean degrading and eliminating the public sector from the energy market, nor does it mean breaking up and privatizing [power utility] PPC, IPTO [power grid operator], DEPA [the Public Gas Corporation], or ending the public sector’s ability to strongly intervene. This will not happen because it is not nationally beneficial. [Market liberalization] does not mean protecting private-sector interests and preferential treatment at the expense of the public sector, as is occuring in our country. This will stop.”

DESFA 2.2bn-euro investment plan relies on troubled Socar deal

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An ambitious investment plan by DESFA, Greece’s natural gas grid operator, featuring well-publicized as well as lesser-known projects, appears to depend on the troubled sale of a 66 percent stake in the company to Azeri firm Socar.

A close look at the figures concerning the investment plan, drafted by DESFA with the sale to the Azeri energy company in mind, leads to this conclusion. As has been widely reported, Socar no longer appears to be keen on finalizing the pending DESFA deal, which places the Greek gas company’s investment plan in doubt.

Socar’s interest in completing the DESFA deal, stalled by a European Commission investigation over EU law concerns, is, at this stage, believed to be lukewarm, at best.

Just days ago, DESFA submitted an application to the European Commission for Greek Stream – the local segment of Turkish Stream, Russia’s latest natural gas supply proposal to Europe, via the south, from the Greek-Turkish border area – to be classified as a Project of Common Interest (PCI), meaning priority funding would become available.

DESFA’s investment plan includes an extensive list of projects. One of these concerns upgrading LNG terminal facilities in Revythoussa, an islet in the Saronic Gulf, close to Athens. Its completion, which would increase the facility’s annual capacity by forty percent, has a budget of 180 million euros.

Another project included on DESFA’s investment plan is the Vertical Gas Corridor (VGC), to interconnect the Greek, Bulgarian, Romanian, and Hungarian gas grids.

Construction of a domestic natural gas pipeline running from the Greek-Turkish border area to Igoumenitsa, northwestern Greece, to be linked with vertical routes, headed both north and south, is also listed. Budgeted at 900 million euros, its development will depend on numerous factors, the most crucial being adequate consumer demand for natural gas.

Other projects included on the DESFA list include connecting to the gas grid major industrial enterprises such as Larko, the state-controlled general mining and nickel producer, which ranks as Greece’s second largest power consuming facility, ELPE (Hellenic Petroleum), as well as smaller-scale industrial plants, at a cost of 250 million euros; and installation of new gas meters and other updates to the system, for a further 100 million euros.

Overall, DESFA will require over 2.2 billion euros of capital between 2015 and 2025, for projects either already under development or still at the planning stage.

If the obstacles impeding the Socar deal are not overcome, DESFA’s ten-year investment plan will be in trouble, which could prompt revisions, as Azeri capital support is anticipated by the plan. Unless, of course, another investor is prepared to step into Socar’s place, such as Belgium’s Fluxys, which has expressed interest in DESFA.

 

 

Final agreement on IGB pipeline project just days away

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With all participating sides agreeing on the terms, a final agreement for the construction of the IGB (Interconnector Greece-Bulgaria) natural gas pipeline is now imminent.

ICGB EAD, the consortium formed to develop and operate the project, is expected to soon hold a general assembly to reach a final decision and proceed with related matters, including a share capital increase.

The ICGB EAD consortium is comprised of Poseidon, a joint venture between DEPA, Greece’s Public Gas Corporation, and Italy’s Edison, and Bulgarian Energy Holding (BEH).

Although the prospective IGB project has gained impetus in recent times, a final agreement is considered pivotal as it would set the pipeline’s development on track with little chance of a retreat, energypress sources noted.

Panayiotis Lafazanis and his Bulgarian counterpart, Temenuzhka Petkova, recently met in Sofia, finalizing a revised schedule for the project’s development. Its operational launch has now been set for 2018.

The IGB pipeline is planned to cover a total distance of 180 kilometers, of which 30 kilometers will run across Greek territory, from Komotoni, in the country’s northeast, to the Greek-Bulgarian border, while the other 150 kilometers will stretch to Stara Zagora in Bulgaria.

The pipeline will initially have a capacity to transmit three billion cubic meters of natural gas annually, which may be increased to five billion cubic meters in the future.

The IGB pipeline will represent a key part of the Vertical Gas Corridor (VGC), to interconnect Greece, Bulgaria and Romania. The prospect of interconnecting the three countries is being strongly supported by the European Union, which plans to contribute 45 million euros for the project’s development. The participating countries intend to apply for additional EU funding.

Plans entail linking the IGB project with the TAP (Trans Adriatic Pipeline) project, to supply Europe with Azeri natural gas.

Greece is also supporting Turkish Stream, Russia’s latest proposal for natural gas supply to Europe, via the south, from the Greek-Turkish border region, as part of a multi-dimensional energy policy for the country being proclaimed by the recently elected Greek government.

Lafazanis, the energy minister, has noted Turkish Stream and its Greek segment, dubbed Greek Stream, will not rival the Vertical Gas Corridor, as the two routes will supply different markets.

 

Italian interest in Russian pipeline reviving ITGI prospects

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Update 11.30am: Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis, speaking at an Economist energy conference in Athens today, has confirmed the interest of Italian companies for development of an additional Greek Stream route to Italy, as previously reported by energypress.

“We would not have any objections for a route towards Italy, via the Adriatic Sea, which would then head further north. Besides, Italian companies are declaring their interest in the prospect,” Lafazanis told the conference.

Earlier today, energypress reported:

Russia’s latest natural gas pipeline proposal for supply to Europe, “Turkish Stream”, supported by Greece and intended to reach the Greek-Turkish border area to serve the continent through the Southern Corridor, is now also attracting Italian interest, despite still being at an embryonic stage without any official agreements.

Roberto Poti, executive vice president at Italian energy company Edison, who met yesterday with Greece’s Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis, is expected to refer to the prospect during a speech today at an Economist energy conference in Athens.

During their meeting, Lafazanis and Poti examined the prospect of developing the forgotten Greek-Italian ITGI pipeline plan as an extension of the Russian pipeline, confirming a preceding energypress report.

Edison and DEPA, Greece’s Public Gas Corporation, had founded a joint venture, Poseidon – under a conservative New Democracy government led by Kostas Karamanlis, Greece’s Prime Minister between 2004 and 2009 – to develop a pipeline that would carry Azeri natural gas from Turkey to Greece and then to Italy, via a submarine crossing through the Adriatic Sea. However, the plan was torpedoed after Azerbaijan opted to develop the TAP (Trans-Adriatic Pipeline) project for this purpose.

Now, Greece and Italy are planning to revive the pipeline plan so that it may carry Russian instead of Azeri gas. The Russian pipeline plan entails developing a route through the Former Yugoslav Republic of Macedonia (Fyrom), Serbia, and Hungary to central Europe. Greek and Italian officials are examining the prospect of developing an additional second pipeline segment to cover the old Greek-Italian pipeline route, from Igoumenitsa, northwestern Greece, to Italy, which would bring the ITGI plan back into play.

On recent official trips to Moscow, both the Greek Prime Minister Alexis Tsipras and Lafazanis, the energy minister, have discussed developing Turkish Stream’s Greek segment, dubbed Greek Stream.

Incorporating the ITGI pipeline plan into the new Russian proposal carries several advantages. Firstly, procedures would be swiftened, while preliminary work already conducted for the Greek-Italian plan, as well as amounts already spent, would be utilized. Despite being stalled, the ITGI plan is still classified as a Project of Common Interest (PCI) by the European Union, meaning priority funding would be available.

Another advantage is that the ITGI pipeline plan, which would include Italian and French corporate involvement, could help soften the European Commission’s opposition to “Turkish Stream”. Italy’s Edison is now under the wings of French company EDF. Italian and French support for the ITGI pipeline would be useful in Brussels for Turkish Stream’s chances.

Also, French and Italian involvement would bolster the project’s commercial prospects. Pipeline infrastructure development relies on securing customers to absorb the natural gas to be trasmittted before any talk of infrastructure development can be considered feasible.

Any route revisions would not prompt Russian objections. The key objective, for both the Russian and Greek governments, is to develop a new Russian supply pipeline to Europe from the south.

 

‘Greek Stream’ talks increase propects of stalled ITGI project

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The Greek government’s intention to bolster the country’s geopolitical role, as highlighted by its repeated declarations for a multi-dimensional energy policy, raises the prospect of the stalled ITGI natural gas pipeline being developed.

The ITGI project was planned to carry Azeri natural gas from Turkey to Italy via Greece, through a submarine Adriatic crossing, from Igoumenitsa, in Greece’s northwest, to the Italian east coast. But it was stalled after Azerbaijan opted for the TAP (Trans-Adriatic Pipeline) as its prefered choice to serve the Southern Corridor.

However, the ITGI project could prove expedient for Greece’s current natural gas pipeline aspirations, Poseidon, the DEPA (Public Gas Corporation)-Edison partnership backing the project, is highlighting. Both DEPA and Edison have informed the Greek government that they are still interested in developing the ITGI project.

Recent talks in Moscow by both the Prime Minister Alexis Tsipras and Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis for “Greek Stream”, the Greek Segment of “Turkish Stream”, Russia’s latest proposal for natural gas supply to Europe via the Greek-Turkish border region, could incorporate ITGI into the plan.

One advantage offered by such a choice is that procedures would be swiftened, while preliminary work already conducted for ITGI, as well as amounts already spent, would be utilized. Despite being stalled, the ITGI plan is still classified as a Project of Common Interest (PCI) by the European Union, meaning priority funding would be available.

Another advantage is that the ITGI plan, which would include Italian and French corporate involvement, could help soften the European Commission’s opposition to “Turkish Stream”. Italy’s Edison is now under the wings of French company EDF. Italian and French support for ITGI would be useful in Brussels for Turkish Stream’s chances.

Also, French and Italian involvement would bolster the project’s commercial prospects. Pipeline infrastructure development relies on securing customers to absorb the natural gas to be trasmittted before any talk of infrastructure development can be considered feasible.

Any route revisions would not prompt Russian objections. The key objective, for both the Russian and Greek governments, is to develop a new Russian supply pipeline to Europe from the south.

TAP consortium close to acquiring 23 expanses needed for pipeline

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The TAP (Trans-Adriatic Pipeline) consortium expects to have acquired all required permits by the end of year, allowing for the project’s construction to commence, while procedures for the consortium’s purchase of twenty-three expanses needed in northern Greece to develop the pipeline are in progress.

Company sources told energypress the TAP consortium’s preliminary work is now on the final stretch before construction work begins in 2016, the objective being to complete work in three-and-a-half years and launch the pipeline in 2020.

At this stage, the consortium is preparing its first stage of expropriation payments ahead of the project’s development. The plan also entails leasing land for temporary use during construction work before being returned to owners in its original state.

Farmland will not be affected and owners will be able to continue cultivating once their land is returned, the consortium has promised. Farming revenues will be taken into account to determine leasing amounts. The leasing periods are expected to run for periods of approximately two years.

Contracts are currently being drafted for the TAP consortium’s purchase of the twenty-three needed expanses. The pipeline’s stretch across northern Greece will cover a 550-kilometer distance.

 

Minister pitches oil exploration tender to French ambassador

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Continuing his quest to promote an international tender for exploration and exploitation rights of twenty offshore blocks in the Ionian Sea, western Greece, and south of Crete, Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis met yesterday with French Ambassador to Greece Jean Loup Kuhn-Delforge, calling for French participation in the tender. Its deadline has been extended to July 14.

Lafazanis was joined by Sofia Stamataki, the head official of EDYE, the Greek Hydrocarbon Management Company.

Just days ago, the duo also met with Japanese Ambasador to Greece, Masuo Nishibayashi, for a meeting whose agenda included the hydrocarbon tender.

Returning to yesterday’s meeting, the French Ambassador promised to relay information provided by the two Greek officials to France’s energy ministry and interested French companies.

During the meeting, Lafazanis informed the French diplomat that the Greek government is aiming to reduce energy costs for households and enterprises. As part of the effort, a plan is being prepared to reduce the cost of electricity and rid the main power utility PPC of private-sector interests, the minister informed.

Lafazanis also noted that another key aim of the government is to establish Greece as a multi-dimensional energy hub in the region and Europe, which is why the country is offering its support to the TAP (Trans-Adriatic Pipeline) project, to supply Azeri natural gas to Europe via Greece; the vertical IGB route to interconnect Greece, Bulgaria and Romania and link with TAP; as well as “Turkish Stream”, Russia’s latest proposal for natural gas supply to Europe via the Greek-Turkish border region.

Lafazanis reiterates call for solid Greek role in TAP’s construction

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Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis has requested that all possibilities be examined to secure increased participation by Greek companies in the construction of TAP (Trans-Adriatic Pipeline), the infrastructure project to supply Azeri natural gas to Europe via Greece and the Southern Corridor, in a letter forwarded to the TAP consortium’s president of the board, John Attrill.

The minister had made a similar appeal about a fortnight ago during a meeting with the pipeline’s country manager in Greece, Rikard Scoufias.

“Considering that the pipeline’s largest segment will be built on Greek terrain, we consider it a given that Greek companies, primarily, will be prefered and selected for the pipeline’s construction and related projects, as well as for the supply of required equipment,” Lafazanis notes in his letter. “We believe that such a course will contribute to the project’s acceptance by local communities and will ensure, to great degree, society’s faith and positive stance towards the project.”

Lafazanis also pledged to look into major VAT return delays, which could place Greek companies in disadvantageous positions during the selection process for project sub-contracts.

Despite EU and US concerns, the Greek government, as part of its declared intention for a multi-dimensional energy policy, is expressing its support for the development of “Turkish Stream”, Russian’s latest pipeline proposal for natural gas supply to Europe via the Southern Corridor.

 

Greek Stream not feasible, US envoy tells energy minister

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Update: The US does not seem particularly perturbed by the warming Greek-Russian ties on energy matters, judging by remarks offered today by the Department of State’s Acting Special Envoy and Coordinator for International Energy Affairs, Amos Hochstein, following his meeting in Athens with Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis.

Hochstein stated that Washington US restricts its discussions to realistic energy plans, while noting the US considers Greek Stream, the local segment of Turkish Stream, Russia’s latest natural gas pipeline proposal for supply to Europe from the south, via the Greek-Turkish border area, as not feasible, despite Moscow’s recent attempt to promote the prospect.

Hochtsein also told reporters that the number of issues he and Lafazanis agreed on outnumbered those where differences exist.

“We will continue to find ways to collaborate on these matters to Greece’s benefit,” Hochstein said, while highlighting that this was not the first time the two officials had met.

In his remarks following the meeting, Lafazanis reiterated Greece’s intention to establish itself as a “pluralistic energy hub in the region,” adding that “we’re interested in a multi-dimensional, independent energy policy to be exclusively determined by national interest, cooperation, and energy security for the region and Europe.”

Lafazanis added that Greece supports the crossing of a natural gas pipeline to reach the Greek-Turkish border region as it would benefit the nation and its people.

The energy minister described his meeting with Hochstein, the US envoy, as one of substance, honest, and useful for the country’s energy-matter prospects.

Ministry officials noted that no US counterproposals to Turkish Stream were offered during the meeting.

Earlier today, energypress reported:

Greece’s intention to support Turkish Stream and the local segment – dubbed Greek Stream – of Russia’s latest natural gas pipeline project proposal for supply to Europe from the south, via the Greek-Turkish border area, will undoubtedly be the key topic of a meeting today between Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis and the US Department of State’s Acting Special Envoy and Coordinator for International Energy Affairs, Amos Hochstein.

Judging by a telephone discussion yesterday between Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin, as well as comments by energy ministry officials to energypress, Greece will not retreat from its position on Turkish Stream despite US opposition expected to be voiced by Hochstein.

Seeking to reduce the continent’s heavy dependence on Russian energy, the US, along with the EU, is supporting the region’s TAP (Trans-Adriatic Pipeline) project, to supply Azeri gas to Europe via Greece. As part of its multi-dimensional energy policy, the Greek government is declaring its support for both the TAP and Turkish Stream projects.

Greek initiatives taken for the swift development of the TAP project, as well as the “Vertical Corridor” pipeline project, to link Greece, Bulgaria, and Romania, and connect with TAP, will be presented at today’s meeting, sources said.

Lafazanis alleges that talks for Greece’s involvement in Tukish Stream have reached an advanced stage, while admitting that plenty of work is still needed, as the project’s actualization not only depends on Greece, but also Turkey, the Former Yugoslav Republic of Macedonia (FYROM), Serbia, and the European Commission. To date, no agreements have been signed for Turkish Stream, still at an embryonic stage.

However, Greece’s position on Turkish Stream was bolstered yesterday by comments from Moscow concerning Russia’s readiness to finance Greek companies, from both the public and private sectors, to take part in the pipeline project’s development.

Just weeks ago, various reports claimed Russia was prepared to offer Greece between three billion and five billion euros as an advance payment for Greece’s future Turkish Stream earnings. The prospect then receded. But talk of an advance payment, which would offer respite for the Greek state’s troubled finances, reemerged during yesterday’s telephone discusson between the Greek and Russian leaders.

Russia’s Turkish Stream plan, whose route would bypass Ukraine, entails supplying the EU approximately 43 billion cubic meters of natural gas, annually.

Russian media reported yesterday that Gazprom and Ankara has reached an agreement for gas supply to Turkey, through Turkish Stream, as of December, 2016. Russian news agency Ria Novosti reported that the pipeline’s Greek segment could be constructed by a Russian-European consortium, estimating the segment’s budget at two billion euros.

 

Socar’s interest in DESFA acquisition all but over

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Azeri energy company Socar’s interest in completing an agreement to acquire a 66 percent stake in DESFA, Greece’s natural gas grid operator, stalled by a European Commission investigation over EU law concerns, is believed to be lukewarm, at best.

Remarks offered yesterday by Socar CEO Rovnag Ibrahim Abdullayev, who disclosed the procedure’s deadline has been given a new extension until the end of the year, indicated that the deal is all but over for the Azeri company, which is clearly not in a rush.

According to sources, the European Commission, at this stage, is not responsible for the investigation’s snail-paced process, but, on the contrary, the negotiating sides are taking forever to respond to questions posed by the EU executive body.

This June, two years will have elapsed since the completion of the DESFA sale’s tender procedures, meaning the Azeri company will be able to withdraw from the deal without any repercussions.

In recent days, it has been suggested that the Azeri company may opt to surrender a 17 percent of DESFA, which would satisfy Greece’s recently elected leftist Syriza-led coalition, determined to maintain a 51 percent stake in the natural gas grid operator for the Greek state, and not just 34 percent.

It has also been suggested that Belgian energy company Fluxys may consider reentering the picture after having expressed interest to buy a stake in DESFA in the past. Fluxys, however, did not take part in the tender launched by TAIPED, the State Privatization Fund.

The Belgian company’s reemergence would be convenient for all parties involved in the DESFA sale. The Azeris could withdraw from a deal that no longer appears to satisfy their commercial aspirations, the Greek government will have transformed the intended privatization into a joint venture offering the Greek state a majority stake, and Fluxys will have finally entered the Greek energy market. The Belgian company has already acquired a 19 percent stake in the TAP (Trans-Adriatic Pipeline) project, to transmit Azeri natural gas to the EU via Greece.

 

Minister calls for maximum local firm involvement in TAP development

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Greece’s Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis has urged for maximum participation by Greek companies in the development of the local segment of TAP (Trans-Adriatic Pipeline), during a meeting with the pipeline’s country manager in Greece, Rikard Scoufias.

The minister underlined the importance of contracting as many Greek firms as possible for the local development of the pipeline project, to transmit Azeri natural gas to Europe via Greece.

Lafazanis stressed the need for equal treatment of Greek companies in tenders held by TAP-AG, the project’s consortium, while also noting that numerous local firms possess the ability to offer reliable work and services at competitive prices.

The meeting was also attended by Greece’s Secretary-General for Energy and Mineral Raw Materials, Apostolos Alexopoulos.

Tsipras: Russian advance fee for ‘Turkish Stream’ likely in six months

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Prime Minister Alexis Tsipras, confirming widespread reports that emerged several days ago of a possible advance payment of between three billion and five billion euros for Greece from Russia in exchange for Athens’s support of “Turkish Stream” – Russia’s latest natural gas pipeline proposal for supply to the EU from Europe’s south, via the Greek-Turkish border region – last night noted that the payment could be made later this year, in six months.

The Prime Minister, who offered comments to the “Ston Eniko” program hosted by long-serving journalist Nikos Hatzinikolaou, described the recent negotiations with Russia as extremely successful.

Various media reports, citing unnamed government leaks, emerged last week, claiming an announcement of an advance payment for Greece, for the country’s prospective financial gains through its involvement in the Greek segment of “Turkish Stream”, estimated at between 100 million and 150 million euros per year, was going to be made last week, during Russian Gazprom CEO Alexey Miller’s visit to Athens. But no deal was announced.

“Will it be a bad development if this did not happen now, but happens in six months?” Tsipras questioned during last night’s television interview, countering last week’s local media fallout that condemned the build-up and failure of a deal’s announcement as a “fiasco”.

Elaborating on “Greek Stream”, as the local segment of “Turkish Stream” has been dubbed, Tsipras noted its development would establish Greece as a regional energy hub, while the country would benefit from lower-priced natural gas and, subsequently, cheaper electricity production from power utility PPC. Natural gas trading opportunities would also be presented by the pipeline’s development, the Greek Prime Minister added.

Contrary to media reports presenting Greece’s seemingly warming ties with Russia as a worrying development for the EU, Tsipras, during last night’s television interview, noted that Europe has “responded respectfully, not nervously.” Foreign Minister Nikos Kotzias had informed him that the US would make a counterproposal, Tsipras added.

The EU and USA have not embraced “Turkish Stream”, a rival proposal to the TAP (Trans Adriatic Pipeline) project for Azeri natural gas supply to Europe, being developed as part of a wider effort by the EU to reduce its dependence on Russian gas supply.

Tsipras, during last night’s comments, noted that major investment opportunities exist in energy and tourism, adding that the government supports these opportunities as there can be no other way towards economic growth.

 

US to offer counterproposal to Gazprom plan, minister says

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The USA intends to offer Greece a counterproposal to Gazprom’s plan for “Greek Stream,” the local segment of “Turkish Stream”, Greek Foreign Minister Nikos Kotzias has announced.

Kotzias, currently on an official visit in the USA, told reporters that Russia had made Greece “a very good offer” while adding that his US counterpart John Kerry promised the USA will make a counterproposal to “Turkish Stream” and that the US Department of State’s Acting Special Envoy and Coordinator for International Energy Affairs, Amos Hochstein, will soon visit Athens for talks.

“Turkish Stream” is Moscow’s latest natural gas pipeline proposal for supply to the EU from the south, via the Greek-Turkish border area, following the indefinite shelving of “South Stream”, over EU-linked legal complications. This project was planned to bypass Ukraine, cross the Black Sea, and reach Bulgaria.

Kotzias noted that Greece’s recent talks with Gazprom on the pipeline project were based on economic concerns, not political. He described Gazprom’s interest to develop pipeline infrastructure through Greece as part of a wider effort against US intentions aiming to limit central and eastern Europe’s dependence on Russian energy.

Responding to a question on Greece’s negotiations with European creditors, Kotzias noted that Greece was ready to compromise and that “nobody will play any games.” The minister added that European officials will need to respect leftist Syriza’s election victory last January, based on an anti-austerity platform. “We’ve had very bad results after five years of austerity,” he noted.

 

‘Greek Stream’ prospects hit by EU charges against Gazprom

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Yesterday’s decision by the European Commission to formally charge Gazprom for abusing its dominant market position dampens the development prospects of “Greek Stream”, the local segment of “Turkish Stream”, Moscow’s latest natural gas pipeline proposal for supply to the EU from the south, via the Greek-Turkish border area.

The Brussels decision was reached following a lengthy investigation that concluded the Russian energy giant is imposing geographical restrictions on supply deals with wholesalers and certain industrial consumers in various countries. Gazprom, according to the decision, has also imposed other measures that prevent cross-border natural gas flow.

The European Commission decision was also based on the conclusion that Gazprom is overpricing in five EU member states, Bulgaria, Estonia, Latvia, Lithuania, and Poland.

The Russian company has denied it is implementing a strategy that combines geographical restrictions and overpricing.

The European Union’s Third Energy Package, legislative measures intended to further open up the gas and electricity markets in the EU, is at the core of the European Commission’s ruling against Gazprom.

Based on these latest developents, if “Greek Stream” stands any chance of receiving EU approval, offering pipeline access to third parties will be necessary. Russia did not permit this for its previous proposal, South Stream, which led to its indefinite shelving.

‘Greek Stream’ agreement not reached with Gazprom head

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No deal was signed yesterday between Greece and Russia for “Greek Stream”, the local segment of “Turkish Stream”, Moscow’s latest natural gas pipeline proposal for supply to the EU from the south, via the Greek-Turkish border area, but both sides appear determined to work on maintaining the prospect.

Gazprom chief executive Alexey Miller, who met in Athens yesterday with Greek Prime Minister Alexis Tsipras and Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis, was obviously extremely conscious of a fresh European Commission threat, announced just hours after his trip to Athens had been confirmed, of imminent sanctions to be imposed on the Russian energy giant over monopolistic practices and overcharging buyers in eastern Europe, based on the findings of an investigation launched in 2011. The legal action may be announced today by the EU’s competition commissioner Margrethe Vestager, leading to consequent penalties worth billions of euros.

Even though the Greek government’s expectations for a “Greek Stream” deal had remained reserved in the lead-up to yesterday’s meeting, a wave of reports, including one stemming from a Syriza party source, claimed Miller would sign a memorandum of understanding in Athens for the pipeline project in exchange for a sum of between three billion euros and five billion euros as an advance payment to Greece for the country’s anticipated pipeline-linked earnings.

Which raises the obvious question as to why the Gazprom head visited Athens in the first place, even though a deal was not going to be signed. His visit could be interpreted as a move intended to make clear the prospective pipeline project remains a priority on Moscow’s agenda. Also, it came as a swift reponse to the Greek Prime Minister’s official visit to Moscow a fortnight ago, the overall underlying message here being that bilateral ties are warming and that a willingness exists to seek a solution for the pipeline’s development.

Earlier this week, Miller, speaking at a Berlin conference, offered a far more daring stance by threatening to interrupt Russian gas supply to the EU following 2019 if the European Commission obstructs “Turkish Stream”.

Following yesterday’s meeting, both sides appeared keen to keep the pipeline’s prospects alive. But it was made clear that plenty of work lies ahead. The prospect of an advance payment to Athens was not even hinted at. “Turkish Stream”, Russia’s alternative to its indefinitely shelved “South Stream” plan, over EU-linked legal complications – the project was planned to bypass Ukraine, cross the Black Sea and reach Bulgaria’s east coast, further north – will require EU approval. Also, prospective gas buyers will need to be secured before any preliminary progress is made.

Miller ascertained yesterday that “Turkish Stream” will be developed in compliance with EU law, noting this was not a concern for Moscow, and that the project would be developed by a Russian-European consortium. “European companies have already expressed interest to participate,” the Gazprom head remarked.

Certain pundits have suggested that Athens may be willing to go as far as to obstruct the development of TAP (Trans Adriatic Pipeline), the EU-backed rival project to carry Azeri natural gas to the EU via Greece, if the European Commission blocks “Turkish Stream”. This may seem farfetched, but sources noted Greece’s archaeological authority could make life hard for the TAP consortium if it chose to.

 

Country’s gain from ‘Greek Stream’ way overestimated

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Despite still being at a theoretical stage, much has been said about “Turkish Stream”, Moscow’s latest proposal for Russian gas supply to the EU through the south, via Greek territory – this segment has been dubbed “Greek Stream” – and the figures concerning the prospective commercial gains for Greece if a deal is reached with Russia.

For a more realistic view, it should be pointed out that, based on the European Union’s Third Energy Package, aiming to further open up gas and electricity markets in the EU, transit fees are not permitted. Earnings to be generated will be provided through participation in the consortium to construct the project and collect fees from users.

For older projects, such fees ranged between two and three dollars per 1,000 cubic meters. Considering that the pipeline’s initial capacity is planned at 30 bcm, half of which will be distributed within Turkey, and part of which will cover Greek needs, then the amount that would be generated can be estimated between 24 million dollars and 36 million dollars, annually, or two million to three million dollars per billion cubic meters (bcm).

If the Third Energy Package’s regulations are accepted and the pipeline is constructed, then the project’s consortium will be funded by a toll fee to be determined by the regulatory authority based on the WACC (Weighted Average Cost of Capital) level. A generous yield of between seven and eight percent for a total construction cost of two billion euros would result in a maximum amount of 160 million euros, annually, overall.

If, then, the Russian side were to offer, for free, a percentage of between 20 and 30 percent, then the yield for Greece would reach between 32 million and 46 million euros per year, minus operational and depreciation costs, meaning that, in essence, the prospective net amount is significantly less than various figures currently being tossed about.

IGB the focus of Lafazanis meeting with Bulgarian ambassador

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Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis held a meeting with Bulgarian Ambassador to Athens Emilia Kraleva yesterday, its agenda focused on natural gas pipeline matters, primarily the Vertical Gas Corridor (VGC), planned to interconnect Greece Bulgaria, Romania, and Hungary, as well as IGB, the Greek-Bulgarian interconnector.

The two officials exchanged views ahead of a meeting tomorrow in Sofia involving the energy ministers of Greece, Bulgaria, and Romania for talks on the VGC pipeline’s development prospects.

The IGB interconnection project, to link Komotini, in Greece’s northeast, with the Bulgarian city Stara Zaogora in the country’s south, will be incorporated into the VGC’s wider framework.

Within Greece, the IGB interconnector will be linked to an exisiting DESFA (Natural Gas Transmission System Operator) gas pipeline, as well as the prospective TAP (Trans Adriatic Pipeline) project, planned to supply Azeri gas to the EU, via Greek territory.

The IGB interconnector is expected to transmit an annual quantity of three billion to five billion cubic meters, while its construction is scheduled to begin in early 2016.

During his meeting with Kraleva, the Bulgarian ambassador, Lafazanis pointed out the need for energy security and sufficiency in the region, and, on a wider level, throughout the European Union. The Greek energy minister stressed it is important for the IGB interconnector to be constructed swiftly, while adding that Greece is determined to contribute to the speedy development of the region’s wider VGC project.

Gazprom CEO in Athens today amid mixed reports on deal

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The Greek government is remaining reserved ahead of today’s official visit to Athens by Gazprom CEO Alexey Miller for talks with Prime Minister Alexis Tsipras and Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis, even though an agreement is likely to be signed for the “Turkish Stream” natural gas pipeline.

Considering Gazprom’s representation at the meeting, by its top official, and not a subordinate, a memorandum of understanding (MOU) may well be signed today for the segment of the pipeline to cross through Greece, dubbed “Greek Stream” by local officials.

“Turkish Stream” is Russia’s latest natural gas pipeline proposal for supply to the EU, planned to bypass Ukraine, cross the Black Sea and reach the Greek-Turkish border area. If developed, it will replace Russia’s indefinitely shelved South Stream proposal, which was planned to reach Bulgaria’s eastern coast, further north. That proposal was blocked by legal complications with the European Commission.

A leading Greek energy ministry official yesterday held back on expectations of any Greek-Russian pipeline deal by reiterating Moscow’s denial of reports that an agreement would be reached to offer Greece between three billion euros and five billion euros as an advance payment for anticipated earnings to be generated by the pipeline’s Greek segment.

“We’re still at a preparatory stage with the Russians, and waiting to see their position,” the ministry official noted. “All details concerning the pipeline’s development, including financing, and matters [recently] forwarded by the [Greek] government in Moscow, such as a renegotiation of the gas supply tariff and minimalization of a take-or-pay payment will be examined with Miller,” the official added.

Greece overestimated its gas order from Russia for 2014 as a result of lower domestic gas consumption amid the recession, which subsequently activated a take-or-pay clause in the natural gas agreement between the two sides. The resulting cost for Greece is believed to exceed 100 million euros, if the take-or-pay clause is strictly upheld.

Both the EU and USA are now clearly expressing their displeasure of seemingly warming bilateral ties between Greece and Russia. Yesterday, just hours after Miller’s visit to Athens was officially announced, it became known, possibly not coincidentally, that the European Commission will launch a new legal attack on the Russian energy giant for overcharging buyers in eastern Europe, according to reports by Bloomberg and Reuters. If confirmed, Gazprom will face such European Commision charges, possibly penalties too, for the first time.

Despite all the aforementioned factors and reservations, certain sources close to Lafazanis, Greece’s energy minister, consider the prospect of a Greek-Russian multi-billion euro deal highly likely.

Greece is running out of time to service major debt repayments and still needs to persuade highly skeptical creditors of a credible reforms plan to secure another tranche of needed bailout funds.

 

 

Greek official’s 3-5bn euro gas pipeline deal claim denied by Moscow

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Greece is set to sign an agreement with Russia, possibly even tomorrow, for the local segment of “Turkish Stream”, Russia’s latest natural gas pipeline proposal for supply to the EU from the south, in exchange for an advance payment of between three to five billion euros, German magazine Der Spiegel has reported, based on an alleged leak made by an unnamed Greek government official.

The prospect was also reported by Greek business newspaper Agora. However, Kremlin representative Dimitry Peskov has already denied that such a deal has been reached.

Greece is running out of time to service major debt repayments and still needs to persuade highly skeptical creditors of a credible reforms plan to secure another tranche of needed bailout funds.

Greek Prime Minister Alexis Tsipras made an official visit to Moscow earlier this month, during which he expressed interest in the development of Russia’s latest natural gas pipeline proposal for supply to the EU via Greece and Turkey. If constructed, it would replace Russia’s preceding and indefinitely shelved plan, South Stream, which would have bypassed Ukraine and crossed the Black Sea to Bulgaria.

According to the reports, Greece will receive an advance payment for anticipated future profit to be generated for the country by the “Turkish Stream” pipeline.

Greek government officials were not available to comment on the Spiegel article, Reuters reported.

Peskov, the Kremlin representative, told Russian business news radio station Business FM that energy cooperation was obviously discussed during the Greek prime minister’s visit to Moscow but “Russia did not promise any financial support because nobody requested it.”

Commenting on the issue, German Finance Minister Wolfgang Schäuble noted he would be glad to see Greece sign an energy deal with Russia, while adding that the prospect would not resolve the country’s bailout problems.

Major energy conference set for September in Greek capital

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“Global Oil & Gas – Black Sea and Mediterranean”, a conference and exhibition of international proportions, will take place in Athens on September 23 and 24, at the capital’s Metropolitan Expo Exhibition and Conference Center, the event’s co-organizers, ITE Group Plc, a major multinational oil and gas event organizer, and ROTA SA, an exhibition organizer, have announced.

The event will focus on the latest oil and gas developments in and around the surrounding countries of the Black Sea, East Mediterranean, Ionian and Aegean Seas, all of which will play a significant role in the regional security of oil and gas supplies, the organizers noted in a statement.

“Global Oil & Gas – Black Sea and Mediterranean” will bring together government and ministry representatives from various countries, directors of state oil companies, as well as heads of international companies and the industry to discuss key regional and global projects, its co-organizers noted.

Recent discoveries of large hydrocarbon resources – particularly natural gas – in the offshore Levant Basin have the potential to significantly alter the supply-side forecasts for the eastern Mediterranean region, the organizers stated. These discoveries have the potential to provide the necessary energy supply to meet growing regional demand and possibly even spur exports, they added.

In addition, the Black Sea region also continues to be a highly prospective source of oil and gas both locally and for the rest of Europe, the organizers noted. As a potential transit corridor for gas transportation, the region could play an integral role in ensuring future security of supply for a whole continent, they added.

With new tendering opportunities on offer, further developments in both shallow and deepwater activities, as well as opportunities in onshore and offshore mature field developments, the surrounding region holds potential to be tapped with the right investments coupled with the right fiscal and legislative environment, the evvent’s organizers noted.

Key themes at the conference will include market trends – global and regional outlook; industry trend analysis; growth strategies – challenges facing new exploration and production developments; technical solutions for deep water drilling – intervention tooling; licensing rounds; fiscal and regulatory framework; the future of the European gas market; gas hubs trading development; maritime transportation – gas storage; LNG regasification; and trends in refining.

A host of oil and gas sector companies will take part in the event’s exhibition, including operators; engineering, procurement and construction companies; exploration companies; geoscience technology and service companies; drilling and down hole technology companies; enhanced recovery system providers; oil and gas production technology and service providers; oil recovery product providers; health, safety and environmental products and management companies; LNG production technology companies; lifting equipment, crane and winch companies; pipeline product and service providers; tank and storage companies; and Pump, compressor and valve providers.

The event will be held in partnership with the Institute of Energy for South-East Europe (IENE) and under the support of Greek Energy Forum.

‘Greek Stream’ progress sought ahead of Eurogroup meeting

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Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis may be denying rumors generated over the past few days of an upcoming visit to Athens by Gazprom CEO Alexey Miller, but this certainly does not mean that talks with Russian officials for “Greek Stream” – the local segment of “Turkish Stream”, Russia’s latest natural gas pipeline proposal for supply to the EU from the south – are not in progress.

As was made evident at the recent meeting of EU energy ministers, the pipeline, intended to bypass Ukraine, cross the Black Sea, and reach the Greek-Turkish border area, is at the top of Lafazanis’s agenda. In comments offered yesterday, the minister assured the project would comply with EU regulations. Both the EU and USA have not embraced the current revival of bilateral ties between Greece and Russia.

According to sources, the Greek energy minister wants a memorandum of understanding, or some form of an agreement, to be signed before next Friday, when the next Eurogroup meeting of EU finance ministers is scheduled to take place. This rush can be linked to an intention by Lafazanis to incorporate – yet again, even if just symbolically – the pipeline project’s developments, as well as Greece’s developing ties with Russia, as negotiating tools at the next Eurogroup meeting.

The sense of urgency has prompted Russian officials to offer their first estimates of the project’s cost, as well as shape. At this stage, it appears that the new Russian gas pipeline proposal will run the same length as South Stream, Russia’s indefinitely shelved previous proposal that would have reached Bulgaria via the Black Sea. Also, the new proposal’s total budget is expected to reach a similar level to that of South Stream, which had been estimated at 15.5 billion euros. Russian company Gazprom has declared that a submarine gas pipeline crossing the Black Sea, already constructed as part of the South Stream project, will now be used for Turkish Stream.

Lafazanis, in another comment yesterday, highlighted Greece’s interest in establishing itelf as a regional energy hub by reiterating the country’s support for TAP (Trans Adriatic Pipeline), the rival pipeline to supply Azeri natural gas to the EU via Greece, now under construction. Greece’s dual support for both projects has drawn heavy criticism from critics who have described the government’s geopolitical energy maneuverings as uncoordinated and without prospects.

The EU, striving to diversify Europe’s energy options by reducing the continent’s reliance on Russia, is not at all happy with Greece’s contact with Moscow amid the overall effort being made to establish Azerbaijan as a key natural gas supplier to the EU.

 

 

Long road still ahead for Turkish Stream’s Greek section

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Yesterday’s meeting between Greek Prime Minister Alexis Tsipras and Russian President Vladimir Putin may have provided a significant first step towards the development of Turkish Stream, Russia’s latest natural gas pipeline proposal for supply to the EU, across Greek territory, but, under no circumstances, means construction activity is now all set to begin.

Both leaders were cautious in their remarks about the project. Putin spoke about examining the possibilities of construction, while Tsipras underlined that Greece will respect EU law.

According to sources, as a first step, Greek and Russian officials will begin holding talks within the current month with the objective of reaching an agreement on the establishment of a company to develop the infrastructure project’s Greek segment.

The following step, if the project is to proceed, will entail arranging funding for the pipeline’s draft plan and preliminary construction studies. At the same time, procedures will need to be launched to secure an Independent Natural Gas System (INGS) licence for the project, as part of the EU Third Energy Package, aiming to make the European energy market fully effective. This license will also recognize the right of access to the pipeline by third parties.

Should the project’s licencing matters be cleared by the European Commission – which was not the case with Russia’s now-shelved previous natural gas pipeline proposal, South Stream, whose route was intended to cross the Black Sea to Bulgaria – then prospective buyers of the natural gas to be carried by the pipeline will need to be found.

The annual capacity of Turkish Stream, planned to bypass Ukraine and reach the Greek-Turkish border area for supply into the EU, is expected to be 47 billion cubic meters, beginning in 2019, when the pipeline’s launch has been scheduled. This new pipeline is planned to cover the natural gas supply needs of countries now served by the TransBalkan System, a pipeline that crosses Ukraine and ends up in Bulgaria and Greece.

If natural gas buyers are found, then final plans for the project will be drafted and construction will commence. It should be noted that construction of one segment, a costly submarine crossing through the Black Sea, has already begun. Initially intended to make up part of the canceled South Stream project, this section will be rerouted to end up further south, in the eastern Thrace region, rather than Bulgaria to the north, as had been planned for the previous project.

Judging by Putin’s reaction at yesterday’s news conference, Russia will not have any objections to Turkish Stream’s Greek section being renamed, as Tsipras pointed out. This segment may be named Greek Stream.

Little was said yesterday on Greece’s request for a Russian revision to a misjudged, by Greece, take-or-pay clause included in an agreement between DEPA, the Public Gas Corporation, and Russian supplier Gazprom.

Greek officials overestimated the country’s gas order for 2014 amid the ongoing recession’s weakened demand, which subsequently activated the supply agreement’s take-or-pay clause, resulting in a cost believed to exceed 100 million euros for Greece, if strictly upheld. However, despite the lack of news on the matter yesterday, sources said the penalty will finally not be imposed by Russia. Sources said details on the issue may be announced later this month, when DEPA and Gazprom officials are expected to meet.

Also, no news was offered on a Greek request for a natural gas price reduction by Russia. This prospect appears to be linked to the outcome of Turkish Stream’s Greek section.

 

 

 

Greek, Russian heads agree on pipeline, in compliance with EU

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Greece is prepared to examine the financing details concerning the development of the local segment of Turkish Stream, Russia’s latest natural gas pipeline plan for supply to the continent, but will act in compliance with EU regulations and only following agreement with fellow EU partners, Prime Minister Alexis Tsipras told Russian President Vladimir Putting during a meeting today in Moscow between the two heads of state.

Russia’s plan for Turkish Stream entails bypassing Ukraine and reaching the Greek-Turkish border area for supply into the EU. The prospective infrastructure project has emerged as Russia’s alternate proposal to South Stream, which would have crossed the Black Sea to Bulgaria. South Stream was shelved after Russia refused to accept EU law as the project’s dominant legal framework, which adds particular weight to the Greek prime minister’s reference to EU law as a guiding force in the country’s pipeline dealings with Russia.

Both leaders remained subdued in their references concerning prospective bilateral energy ties between the two nations, opting to present the matter as one involving Russia and the EU as a whole, as well as Greece’s obligations as an EU member.

By refraining from making any ambitious remarks on Turkish Stream, the Greek government has opted to place emphasis on making the right preparations that can lead to the project’s feasibility, rather than deliver big words and no eventual action, as has been the case in the past.

The Greek prime minister noted that the topics discussed included promoting energy cooperation between the two countries, as well as strengthening Greece’s role as an energy hub in Europe.

Tsipras pointed out that Greek-Russian ties have been lethargic in recent years, while adding that the time was now ripe to reinvigorate activity between the two nations.

The Russian president confirmed that the pipeline plan for gas transmission to Europe was discussed with the Greek leader, while adding that Greece will serve as a key distribution center in the project. Putin reminded that two-thirds of Greece’s natural gas needs are covered by Russia.

An effort will be made to revive bilateral trade between the two countries to levels achieved prior to the enforcement of international sanctions, Putin noted.

Responding to a journalist’s question on whether specific details on Turkish Stream were discussed, Putin said extensive discussion took place on Greece’s involvement in the pipeline project, adding that it was up to Greece to examine the matter in cooperation with its EU partners.

The Russian president noted that Greece’s participation in Turkish Stream promises to elevate the country’s geopolitical role and generate significant revenues for the state’s coffers.

Tsipras intervened to make clear that the pipeline’s Turkish Stream title would be valid only for its Turkish segment and named otherwise for its section running through Greek territory.

PM to launch tricky political game with Moscow visit

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Today’s official visit to Moscow by Prime Minister Alexis Tsipras launches a tricky balancing act in which the Greek leader will need to strike an equilibrium between strategically broadening the country’s horizons, financially and in the energy sector, and not prompting side effects in its relations with fellow EU partners.

It will be a difficult task as the attempt entails the risk of transforming the perception of Greece as a geopolitical danger, instead of bolstering the country’s negotiating strength with creditors.

The agenda at today’s meeting between Russian president Vladimir Putin and Tsipras may be all-encompassing, covering all major issues, from the prospect of a bilateral loan agreement for Greece, a reduction of Russian natural gas supply prices, Russia’s lifting of an agricultural products embargo, Russian investments in Greek ports, Trainose, the railway company, and DEPA, the Public Gas Coorporation – all in exchange for Greece’s support of Russia’s latest natural gas pipeline plan to bypass Ukraine and reach the Greek-Turkish border area for supply to the EU.

Russia hopes to begin transmitting 47 billion cubic meters of natural gas, annually, to central Europe through this pipeline. It is considered certain that Putin will seek Greek involvement in the infrastructure project.

Efforts made by Greece in recent years to upgrade the country’s role in supporting Russian supply of oil and gas to Europe have not been embraced by the EU and US, striving to limit Europe’s energy dependence on Moscow. However, regardless of various ongoing maneuverings, officials in Brussels know well that the EU heavily relies on Russian natural gas. If a solution is not found to Russia’s conflict with Ukraine, then the EU will need to find an alternative pipeline supply solution for the 63 billion cubic meters of natural gas it consumes via Ukraine. At present, no other supplier can offer such amounts. Nor do alternative pipelines of such capacity exist.

If the conflict with Ukraine is sustained, Russia will place at risk its gas supply prospects with the EU, the biggest recipient of Russian natural gas. EU consumption of Russian natural gas via Ukraine is worth 20 billion dollars, annually. This explains why Russia is promoting the prospect of Turkish Stream, to avoid Ukraine, a major supply-route problem for Russia. It should be noted, however, that should Russia and Ukraine resolve their differences, the new Russian pipeline plan will no longer be necessary, and, politically, will leave Greece out in the dark.

Greek move towards closer Russian ties entails risk

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Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis, just back from an official visit to Moscow, has paved the way for close ties with Russia, a move that also promises to spark a stern response from the USA and EU.

If Russian president Vladimir Putin and Greek Prime Minister Alexis Tsipras, who meet on April 8, make official a bilateral agreement for Russia’s latest natural gas pipeline proposal, Turkish Stream, to bypass Ukraine and carry gas to the Greek-Turkish border area, then it will arrive as the first deal between the two countries since 2009. Turkish Stream is Russia’a alternate proposal for South Stream, a cancelled project whose route woute have crossed the Black Sea to Bulgaria.

Greece’s step closer to Russia, a country targeted by international sanctions over the Ukrainian crisis, entails considerable risk amid the region’s reshaped geopolitical standing. The initiative could even lead to repercussions in Greece’s ongoing negotiations with its creditor representatives, market analysts have pointed out.

For Lafazanis, who heads the leftist Syriza-led coalition’s radical left faction, Left Platform, creating a rift between Greece and the country’s creditors may be a natural extension of his political views, but the government is left to deal with the real issues.

Some political analysts believe Lafazanis is seeking to persuade the entire Greek government to join his pro-Russian stance. Others disagree and contend the minister does not intend to fully succumb to a Greek-Russian affair but, instead, through his maneuverings, is seeking greater understanding from creditor representatives over the harshness of their demands imposed on Greece.

Whatever the case, it appears that, at present, Greece is on the verge of sealing a major energy deal with Russia through the Turkish Stream plan. The pipeline, whose construction Russia aims to complete by 2019,  is intended to carry 63 billion cubic meters of Russian natural gas, annually, to central Europe. Its route is planned to run through the Black Sea, Turkey, Greece, the Former Yugoslav Republic of Macedonia (Fyrom), Serbia and Hungary, with Austria as its final destination.

Lafazanis, whose Moscow visit earlier this week included meetings with Russia’s Energy Minister Alexander Novak and Gazprom CEO Alexey Miller, yesterday declared he was greatly interested in the Russian government’s plan to include Greece in the Turkish Stream pipeline project’s route, while noting that a final decision would be made by the government and the the Greek Prime Minister “based on national interests.”

 

Minister announces natural gas price cuts for April

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Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis has announced a “considerable reduction” in natural gas price levels to be implemented in April.

“Natural gas prices will be significantly reduced in April. We have held discussions with DEPA (Public Gas Corporation) and announcements will be made,” the minister noted, without going into further detail. Lafazanis also noted that reductions would be made to electricity rates.

Commenting on the stalled sale of a 66 percent share of DESFA, Greece’s Natural Gas Transmission System Operator, to Azeri company Socar, Lafazanis described the attempted sale’s characterization – as a privatization deal – as “paradoxical”.

The minister noted the process was not a privatization but, instead, a case of renationalization, as, if the deal were to proceed, the company’s control would be transferred from the Greek state to the Azeri state, in other words, from one state to another.

“Socar is an Azeri state company. If a company remains in the public sector, we call this anachronism, whereas if it is transferred to another state, to another state company, then reform, or modernization, has taken place,” noted Lafazanis, who heads the ruling leftist Syriza-led coalition’s radical left, or Left Platform.

Greece’s previous administration had reached a deal to sell a 66 percent of DESFA to the Azeri company but the agreement was stalled by a European Commission investigation over EU competition and energy security concerns. Last week, in a major twist to the plot, it was reported that the Azeri company was now behind the delay in search of a safe way out of the deal. Socar holds a 20 percent stake in the TAP (Trans Adriatic Pipeline) consortium developing the pipeline project to transmit Azeri gas to Europe via Greece.

“If we were in power and no [DESFA] sale procedure had taken place, we would most probably have not proceeded with the sale of a dynamic and profitable monopolistic public utility,” Lafazanis remarked. “There really was no reason for such an agreement. As we see it, privatizations linked to strategic sectors are inconceivable. But that’s what happened,” he added.

Lafazanis reiterated that the Greek government would await the European Commission’s decision before making any moves.

Commenting on the TAP project, Lafazanis said the government supports the project but reminded that parties which stand to gain major benefits as a result of the infrastructure project’s crossing through Greece will need to compensate the country accordingly. The need for such an exchange had been neglected until now, the minister added.

“I raised this issue from the very beginning [of my tenure] with TAP and Azeri government officials,” Lafazanis said. “We’ve had positive development following a series of discussions. All sides have agreed that negotiations need to be based on the Greek government’s proposals.”

At the most recent meeting on the matter, a decision was reached to assemble a committee whose aim will be to deliver proposals that could satisfy both sides.

Greek move towards Russia on energy unsettling US officials

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The recently elected leftist Syriza-led coalition government’s maneuvering aiming to shift Greece’s energy policy interests away from the US-European sphere of influence and closer to Russia, as part of what the Greek administration is referring to as a “multi-sided policy with openings towards all directions,” has now also begun irriating US officials, besides EU officials.

Influential American government officials and energy-sector lobby group representatives have already reacted to a speech last night, filled with radical leftist thoughts and intentions, delivered by the Production Reconstruction, Environment and Energy Minister Panayiotis Lafazanis at the Athens Energy Forum, an event organized by the International New York Times.

Responding to Lafazanis’s speech, Robin Dunnigan, the US State Department Bureau of Energy Resources Deputy Assistant Secretary, noted: “You must not detach, or place emphasis on projects still years away from being actualized, or not yet feasible, such as Turkish Stream [Russian-backed alternative to the country’s withdrawn South Stream project], a plan that will not bring new natural gas to Europe, but old gas from a different route.”

During his preceding speech, the Greek energy minister noted the government’s “multidimensional energy policy will not allow the country to become an energy-sector banana republic and protectorate for anybody.” He also spoke of “large capitalist countries controlling energy options as a means of overruling smaller nations.”

“As for the minister’s speech, there are parts that we agree on and other parts where we disagree. We agree, for example, that energy policy crucially affects progress and prosperity and that we must ensure that cheap energy will remain accessible for all. The developments concerning Europe’s energy security not only affect our friends and allies but our energy security as well,” Dunnigan remarked. “Russia must remain a supplier, but not the only one. Many things still need to be done in southern Europe. I’ll begin with the Southern Gas Corridor and the importance for natural gas to be supplied from the Caspian region – non-Russian gas to Europe through Turkey and via the TAP pipeline crossing Greece. However, there are two problems. The first concerns financing and the second has to do with not detaching from our objective with projects such as Turkish Stream,” the US official continued.

TAP establishing Greece as geopolitical force, official notes

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TAP (Trans Adriatic Pipeline) stands as a project of major significance for Greece, its wider positive impact including job creation, increased revenues, investor confidence improvement, and the country’s solidifying role as a key geopolitical player in the region, if not Europe, TAP’s External Affairs Director, Michael Hoffmann, stressed last night during a speech at the Athens Energy Forum.

Commenting on the project’s development, the TAP offcial noted that the objective is for construction to begin in 2016 and be completed in 2019 for test runs ahead of the pipeline’s scheduled commercial launch in 2020.

Hoffmann told the energy forum that some 350 Greek companies have held talks with the TAP consortium for sub-contracted work. He added that the compensation package has been announced for 55,000 property owners whose properties are to be expropriated for the project’s development. Initial agreements have been reached with owners, Hoffmann noted.