Gazprom

Country’s big energy players gearing up for DEPA sale

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The past couple of days could be regarded as an unofficial launch of DEPA’s (public gas corporation) privatization, given the strong interest expressed by major players for the gas utility’s commercial division.

Two of the country’s biggest energy market players, the Mytilineos corporate group and ELPE (Hellenic Petroleum), which holds a 35 percent stake of DEPA, made clear their interest in the gas utility’s commercial section yesterday, just hours after energy minister Giorgos Stathakis updated energypress on the DEPA privatization model to be adopted.

The government and country’s lenders have agreed on a DEPA sale model entailing a split of the gas utility into two subsidiaries representing its commercial and distribution network divisions. This split is expected in September.

Motor Oil Hellas is also expected to emerge as a candidate, highlighting how coveted the DEPA privatization is for energy players.

Motor Oil Hellas recently announced a plan to enter the retail natural gas market through its Coral network of gas stations.

The petroleum firm has filed a complaint to the competition committee over DEPA’s close-to-finalized effort to acquire Shell’s 49 percent of their EPA Attiki joint venture covering supply in the wider Athens area. DEPA already holds a 51 percent stake and would fully own EPA Attiki if the deal with Shell is finalized.

The Motor Oil Hellas complaint could turn into legal action as DEPA, already controlling the country’s biggest wholesale gas agreements, would also gain major control in the capital’s retail market and affect competition.

This issue is certainly not one of minor importance and could end up delaying the overall plan for the retail gas market’s restructuring as well as DEPA’s privatization.

Greece’s wholesale gas market is also changing. Until recently, DEPA controlled this market as the dominant importer of natural gas. DEPA held a 96 percent of the wholesale gas market in 2016.

Things began to change in 2017 when Prometheus Gas, a joint venture formed by the Copelouzos group and Gazpromexport, imported a total of one billion cubic meters, capturing a 20 percent share of the market. M&M Gas, a joint venture involving Motor Oil Hellas and Mytilineos, also imported gas amounts in 2017, through the Greek-Bulgarian interconnection.

Mytilineos is already very active in the wholesale natural gas market as an LNG importer. It plans to import a first Qatar Gas shipment next month. Mytilineos has also established a direct trading partnership with Gazprom and is believed to be negotiating a deal with another major player.

 

Major battle seen for liberalized gas market in 2018

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The natural gas retail market’s liberalization, a new reality in Greece that has arrived along with the New Year as a follow-up to the wholesale gas market’s opening, promises to lead to major changes.

Combined electricity-and-gas packages are already being offered by retailers in a local energy market whose natural gas sales have grown from 2.9 billion cubic metres in 2015 to 5 billion cubic meters in 2017.

The natural gas market is expected to gain further impetus as a result of the electricity market’s liberalization. Numerous gas market retailers, besides EPA Attiki, covering wider Athens, and Zenith, covering Thessaloniki and Thessaly, are examining the prospect of offering combined electricity-and-gas packages.

The main power utility PPC has hired a consultant to help prepare its entry into the natural gas market, while major independent electricity suppliers have already launched campaigns for gas supply. Also, DEPA, the public gas corporation, is considering entering the electricity market, either alone or along with a partner.

As of 2018, independent gas suppliers will seek to further bolster their presence in a market traditionally dominated by DEPA.

The degree of DEPA’s future retail presence in the EPA supply companies serving wider Athens, Thessaloniki and Thessaly, to be determined by ongoing negotiations between the shareholders involved in these ventures, remains to be seen.

The government appears to favor DEPA’s withdrawal from EPA Thessaly-Thessaloniki and continued presence in EPA Attiki. DEPA currently holds 51 percent stakes in these ventures. Shell holds a 49 percent stake in EPA Attiki and ENI a 49 percent stake in EPA Thessaly-Thessaloniki. Shell appears to want to withdraw.

EPA Attiki and Zenith, covering Thessaloniki and Thessaly, have both expressed an interest to broaden their geographic reach.

According to data released for 2015, the retail natural gas market in wider Athens, Thessaly and Thessaloniki exceeded 293 million euros. EPA Thessaly-Thessaloniki posted a pretax profit of 45 million euros and EPA Attiki a pretax profit of 30.1 million euros, according to this data.

As for Greece’s wholesale natural gas market, DEPA, until recently, has stood as the undisputed dominant player owing to its overwhelming control of imports. In 2016, DEPA’s natural gas imports reached 42.7 million MWh, from 44.5 million MWh in total, a 96 percent share.

However, this picture began changing in 2017, beginning with Prometheus Gas, a joint venture of the Copelouzos Group and Gazprom Export, whose imports for the year reached one billion cubic meters, or 20 percent of the 5 billion cubic meter total. These amounts were imported from the gas pipeline at Sidirokastro, via Bulgaria.

According to sources, Prometheus Gas has already signed contracts for a greater amount in 2018. Clients include PPC, which has placed orders for its natural gas-fueled power plants.

M&M, a joint venture involving Motor Oil Hellas and the Mytilineos Group, has also made imports.

In recent comments to Reuters, Evangelos Mytilineos, chief executive of the Mytilineos Group, noted that the corporate group ranks as the country’s biggest natural gas consumer with a level of 1.5 billion cubic meters, adding that M&M Gas could soon start trading annual amounts of natural gas measuring around one billion cubic meters.

Despite the emergence of new players in Greece’s wholesale gas market, DEPA managed to increase its volume-based sales increase of 9 percent for 2017’s nine-month period, while its operating profit (EBITDA) rose by 32 percent to 223 million euros.

 

PPC, expanding sources, places first Prometheus Gas order

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The main power utility PPC has taken a major step towards expanding its natural gas supply sources by placing its first order with Prometheus Gas, a Gazprom-Copelouzos group joint venture, for a total amount of 839,500 MWhth in 2018. Until now, PPC has relied on DEPA, the Public Gas Corporation, for its gas needs.

PPC’s move follows a number of Prometheus Gas orders made this year by independent electricity producers and industrial enterprises.

The power utility’s order, based on a board decision made just days ago, will partially cover PPC’s gas needs in 2018 for electricity generation at its gas-fueled facilities.

Prometheus Gas is expected to end the current year with sales of close to one billion cubic meters, an amount representing 20 percent of the Greek market’s total gas demand, based on current figures.

According to sources, Prometheus Gas has already signed deals for natural gas supply totaling over one billion cubic meters in 2018. Most of these orders have been placed by electricity producers, industrial consumers, as well as suppliers, now operating in a reformed retail gas market.

The shape of Greece’s natural gas market in the year to come has yet to be finalized. The Mytilineos Group, the country’s biggest natural gas consumer with annual needs totaling 1.5 billion cubic meters, has yet to unveil its plans.

In recent comments to Reuters, Evangelos Mytilineos, chief executive of the Mytilineos Group, suggested the corporate group could soon begin trading amounts of around one billion cubic meters a year through M&M Gas, a wholesale trading joint venture involving the Mytilineos Group and Motor Oil Hellas.

Natural gas sales in the Greek market, currently dominated by three key players, have skyrocketed in recent times. Sales are expected to total 5 billion cubic meters in 2017, nearly double the sales figure of registered 2.9 billion cubic meters in 2015. worth slightly below one billion euros.

Despite the emergence of new players, DEPA, the gas utility, has managed to increase its sales by 9 percent in terms of volume and 32 percent in terms of operating profit. The utility’s EBITDA figure is estimated at 223 million euros.

The market data clearly shows that all players, including DEPA, have benefited from the overall rise in demand for natural gas. This trend may be repeated in 2018, a year during which PPC’s Megalopoli V power plant is expected to enter the system, which will further increase local natural gas demand.

 

 

Prometheus Gas captures 20% of changing Greek market

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Prometheus Gas, a joint venture involving the Copelouzos Group and Gazprom, has captured a 20 percent share of the Greek gas market, according to energypress sources.

This development highlights the fact that 2017 has been a year of major changes for the sector as significant natural gas amounts imported and distributed in Greece no longer involve DEPA, the Public Gas Corporation.

Prometheus Gas is expected to end the current year with volume-based sales of close to one billion cubic meters, one fifth of total demand in the Greek market.

The bulk of these sales were made to electricity producers and industrial consumers, while some amounts were also bought by suppliers who purchased gas amounts imported by Prometheus Gas through the Sidirokastro entry point in Greece’s north.

Gas pipeline imports, as well as exports, have also been made by other companies this year but Prometheus Gas remains the dominant trader, not including DEPA, the gas utility.

The new year promises further changes as households will be free to choose gas suppliers as of January 1.

A trading system change at Sidirokastro, the Greek-Bulgarian interconnection through which the majority of gas amounts enter the Greek market, has been a key factor behind the market changes.

Until recently, transactions at this point, pivotal for both the Greek and regional markets, were dominated by long-term contracts. The arrival of open auctions, in line with EU law, has enabled independent gas suppliers to buy and sell considerable natural gas amounts at competitive prices.

Implementation of the EU law for an interconnection agreement between the Greek and Turkish grid operators at the country’s Kipi entry point on the Turkish border would provide further impetus for market changes and bolster the country’s diversification of sources.

DEPA, Gazprom, Edison agree on Russian supply to Europe

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

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

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

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

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

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

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

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

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

Gazprom, Edison, DEPA discuss Southern Corridor gas pipeline plan

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Technical matters concerning Russia’s Southern Corridor pipeline project proposal for transmission of natural gas to Europe were discussed at a meeting in Moscow yesterday between the heads of Gazprom, Edison and DEPA, Greece’s Public Power Corporation.

A new memorandum of understanding to provide greater details than a previous MoU signed by the three corporations in Rome last February is being prepared.

Yesterday’s meeting included talks on the optimal route for Russian gas exports to Greece and, by extension, Italy, according to a statement released by Gazprom.

The three sides took into account positions maintained by the European Commission and USA on Russian gas supply to Europe.

At this stage, the main concern of the interested parties is to avoid the mistakes committed for Russia’s previous pipeline proposal, South Stream, which deviated from European Commission regulations.

The sidelined Greek-Italian ITGI Poseidon project, initially planned to carry Azerbaijani natural gas, is expected to be developed and play a key role in the Southern Corridor plan by providing a pipeline link across the Adriatic Sea for the transfer of Russian gas from Greece to Italy. This issue was also on the agenda of yesterday’s talks.

Russian gas exports to Italy rose by 36.5 percent in November compared to the equivalent period last year. Italy is the second-biggest importer of Russian natural gas.

As for a Turkish segment planned to comprise part of the Southern Corridor project, Gazprom signed an agreement, just days ago in Amsterdam, with the Allseas Group, a Swiss-based offshore pipeline installation and subsea construction company for the project’s underwater segment in the east. This section of the pipeline is planned to run from a point close to the Russian city Anapa, on the northern coast of the Black Sea, across the sea, all the way to eastern Thrace, Turkey’s European territory.

 

Gazprom a prime European gas factor, including for DESFA sale

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It has become clear that virtually no gas transmission developments in Europe, including the collapsed effort to privatize Greece’s natural gas grid operator DESFA, can be assessed without factoring in the role of Russian energy giant Gazprom.

All companies linked to the DESFA sale ordeal – the candidate buyers Azerbaijan’s Socar and Italy’s Snam, as well as Belgium’s Fluxys, an early candidate whose interest waned before apparently rebounding more recently – are associated with the Southern Corridor, Gazprom’s natural gas supply plan for the European market’s south.

Gazprom is promoting the prospects of “Turkish Stream” and making plans for an additional route, via Greece, for natural gas supply to the EU. The Russian company is making careful and decisive moves to establish agreements for the first route through Turkey and is also engaged in talks with the European Commission for the route’s extension through Greece.

The significance of today’s three-way meeting in Moscow between Gazprom, Edison and DEPA, Greece’s Public Gas Corporation, for talks on the pipeline route through Greece, not long after the DESFA sale’s collapse, cannot be overlooked.

The three sides had signed a Memorandum of Understaning in Rome last Ferbruary and could now sign a more specific agreement featuring greater commitments for the Southern Corridor plan. This project would carry Russian natural gas through the Black Sea, Greece and Italy and would utilize work already carried out by DEPA and Edison as part of 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.

Following the recent collapse of the DESFA sale, Socar rushed to announce that the development would not affect its involvement in the TAP project. The Azeri firm holds a 20 percent stake in the TAP consortium. Socar has not ruled out the possibility of expressing renewed interest in DESFA once a new sale attempt is launched.

Ties between Gazprom and Socar are highly complicated. On the one hand, they are the prime players in rival gas pipeline plans, while, on the other, the two are linked by high-level associations concerning Russian government officials and Socar’s president as well as exchange. Gazprom, for exchaneg, supplies gas to Socar with the aim of bolstering the latter’s cash reserves to avoid technical problems that interrupt Russian gas flow.

Gazprom, Edison, DEPA press on for Southern Corridor plan

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

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

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

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

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

 

DEPA planning action against rivals for Gazprom take-or-pay costs

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DEPA, Greece’s Public Gas Corporation, intends to take action, including legal, to avoid shouldering the entire resulting cost of a take-or-pay clause in its supply agreement signed with Gazprom. Besides the Greek state-controlled corporation, the Russian gas giant has now also begun supplying other customers in the local market.

Subdued gas demand in Greece amid the long recession has activated the Gazprom supply agreement’s take-or-pay clause, requiring payments for unconsumed amounts.

“We’re not saying ‘no’ to the natural gas market’s liberalization, but DEPA can’t be left alone to cover this expense,” a corporation official contended, adding that the take-or-pay clause was included in DEPA’s agreements with Gazprom to ensure gas supply security for the entire Greek market and that its cost should be shared by all local traders.

Gazprom, operating through Prometheus Gas, its joint venture established with the Copelouzos corporate group, began direct gas supply to local firms  a couple of months ago. Recipients include Heron, a member of the GEK Terna group, Engie, QPI and Elpedison (ELPE, Edison, Eltex), while other industrial enterprises are also involved in negotiations with Prometheus Gas.

The natural gas is being supplied at a price level equal to that of the starting price offered at DEPA gas auctions.

Gazprom’s decision to break a long-running unofficial agreement for exclusive gas supply to DEPA comes at a time when the Russian side is heavily promoting its Southern Corridor pipeline plan to cover southeast Europe, either as an extension of Turkish Stream or as the South Stream project.

Another gas supplier, M&M Gas, a venture involving the Mytilineos Group and Motor Oil Hellas, has also begun supplying modest natural gas amounts to local customers, primarily industrial enterprises, who have stopped ordering from DEPA and its regional EPA supply subsidiaries.

Addition of Turkey’s Botas to Southern Corridor plan implied

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Though not specifically named during yesterday’s Greek-Russian energy conference in Athens, Botas, Turkey’s state-run crude oil and gas company, may join Russia’s Gazprom, DEPA, the Greek Public Gas Corporation, and Italian energy firm Edison as a fourth partner in the Southern Corridor project, an extension of the Turkish Steam plan, to supply Russian natural gas to the wider region.

Other European countries are likely to also express an interest in the project, which would increase the chances of Brussels approving the plan.

DEPA chief executive Theodoros Kitsakos reminded conference participants that a three-party memorandum of understanding (MoU), involving Gazprom, DEPA and Edison, was signed last February. He noted that all studies, including cost studies, have been carried out, while also adding that a “fourth partner is likely to join in” as the Russian gas supply line will probably run through Turkey.

Kitsakos described the project’s plan as fully sustainable and respectful of EU principles. “We hope development begins in 2017 and that the project is completed between 2019 and 2020,” he remarked.

Energy minister Panos Skourletis noted that talks recently resumed on this prospective Russian gas supply channel to Europe, via Greece and Italy. “We believe the plan may serve the EU’s strategic objective of reinforcing energy security and offering competitive pricing,” Skourletis commented. “We consider the Russian government’s stance of wanting to promote the project only when EU regulations have been met, in order for it to proceed without interruption, as a very constructive approach,” he added.

The energy minister said the trio of partners, as a follow-up to February’s MoU, are now looking at solutions concerning source diversification and routes. “This discussion is expected to widen and involve other countries so that the project may represent part of the overall picture concerning European energy supply in the future,” Skourletis noted. “Forecasts indicate that energy needs will increase in Europe. Now is the time to shape the new plans that will effectively meet these future needs.”

Georgia ensures uninterrupted natural gas supply

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The Georgian government aims to ensure stable and uninterrupted natural gas supply, which has proven difficult in Georgia as a result of increased consumption in the country in recent times, the country’s Foreign Affairs minister, Micheil Janelidze, has announced in a statement.

In order to achieve this goal, the Georgian government conducted extensive negotiations, which produced successful results, the ministed noted.

“Together with our friend and strategic partner – Azerbaijan – means of supply of additional amounts of natural gas necessary for covering the deficit were found, on good terms. The agreement on this was reached and signed by the Minister for Energy of Georgia and the Azerbaijani company SOCAR, last week,” Janelidze noted.

Negotiations were also conducted with GAZPROM on the terms of the transit of natural gas from Russia to Armenia, through Georgian owned infrastructure. Such negotiations have been conducted annually since 2004, as the transit agreement is re-examined each year.

During these negotiations, officials also discussed ways to cover natural gas needs should supply is not possible from certain sources.

The agreements reached with SOCAR mean that there is no need to purchase additional amounts from GAZPROM exports, according to Janelidze.

At the same time, an agreement has been reached with GAZPROM to maintain the terms of an existing transit contract that has been valid in previous years, the minister noted, adding that its extension will be signed within the next few days.

Georgia will be supplied natural gas for transit to Armenia and will not purchase any additonal amounts from GAZPROM, the minister noted.

“With these agreements, the government of Georgia has ensured the best possible terms for stable and uninterrupted supply of gas and energy security for the country,” Janelidze stated.

 

 

DEPA spared from paying Gazprom take-or-pay amount for 2015

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DEPA, the Public Gas Corporation, has been spared from paying Gazprom Export an amount worth roughly five million dollars that resulted from the activation of a take-or-pay clause concerning unabsorbed natural gas in 2015.

DEPA, which had been negotiating with Gazprom for quite some time in search of a solution, absorbed less natural gas than it had ordered in 2015 as a result of lower demand in the weakened Greek market.

Neither DEPA nor the corporation’s consumers will be burdened by the resulting take-or-pay clause’s penalty following the successful outcome of talks with Gazprom, the Greek gas company announced.

Last month, DEPA agreed to pay Gazprom 36 million dollars, down from an amount of 82 million dollars initially demanded by the Russian gas giant, for unabsorbed natural gas concerning 2014.

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

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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.

DEPA, Gazprom settle take-or-pay clause amount for 2014

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DEPA, the Public Gas Corporation, has reached an agreement with Gazprom Export on the total amount to be paid by the Greek firm following the activation of a take-or-pay clause by the Russian giant for unabsorbed natural gas amounts ordered for the Greek market in 2014.

An initial amount of 82 million dollars, determined by the take-or-pay clause’s terms, has now been reduced to 36 million dollars, DEPA announced today.

DEPA’s gas amount order from Gazprom Export for 2014 was not fully absorbed as a result of the subdued overall demand in recession-struck Greece.

The reduced 36 million-dollar amount agreed to will be paid in two installments. The first, set at 20 million dollars, needs to be settled on January 31, while the remaining 16 million dollars are due to be paid two months later, on March 31.

As has been previously reported by energypress, the amount to be paid by DEPA to Gazprom will be rolled over onto the bills of the former’s consumers – gas-fueled power stations, regional EPA gas suppliers, and industrial enterprises. The issue carries a regulatory dimension and will need to be examined by RAE, the Regulatory Authority for Energy.

First take-or-pay installment paid for unabsorbed Russian gas

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DEPA, the Public Power Corporation, has just paid the first of two installments, worth 40 million dollars, to Gazprom following the latter’s activation of a take-or-pay clause included in its supply contract. The clause was activated as a result of unabsorbed natural gas amounts ordered by the corporation for the Greek market in 2014.

DEPA’s second installment to Gazprom is scheduled to be paid in March. The total amount to be paid by DEPA to the Russian gas company has yet to be decided as negotiations on the issue are still in progress. Initial estimates had put the figure at roughly 100 million euros.

The resulting cost of the take-or-pay clause will be rolled over onto DEPA consumer bills – electricity producers, EPA gas suppliers, and industrial enterprises – as had been agreed to in supply contracts. The issue also carries a regulatory dimension, meaning coordination with RAE, the Regulatory Authority for Energy, will be needed.

A negligible amount to be paid by DEPA to Gazprom is expected for 2015 as a result of increased gas consumption in Greece compared to 2014. The gas amount ordered by DEPA for 2016 is likely to be more than covered, which would result in no take-or-pay clause payment.

 

Gas demand plunges to 2006 levels, modest increases seen

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The country’s total natural gas consumption figure for 2014 slumped to levels recorded back in 2006, registering 2.780 billion cubic meters, substantially lower than the level of 3.645 billion cubic meters recorded in 2013.

Reduced natural gas consumption for electricity production is the main factor behind the considerable drop, according to DESFA, the natural gas grid operator.

The proportion of natural gas absorbed through facilities in Sidirokastro, close to Serres, in the country’s north, for Gazprom supply, dropped considerably to 57.9 percent in 2014 from 66.9 percent in 2013.

The proportion of LNG supplied through Sidirokasro increased to 20.5 percent in 2014 from 15.3 percent in 2013. The share of LNG supplied by Botas, the Turkish state-run crude oil and gas company, via Kipous, northeastern Greece, increased to 21.25 percent in 2014 from 17.8 percent a year earlier.

DESFA forecasts a gas demand increase to 3.542 billion cubic meters in 2016, with modest increases to levels of 3.616 billion cubic meters in 2017, 3.735 billion cubic meters in 2018, and 3.766 billion cubic meters in 2020. DESFA expects a decline to 3.39 billion cubic meters in 2022 followed by a rebound to 3.782 billion cubic meters in 2025.

Factors taken into account to determine these forecasts include consumption levels of preceding years, import levels, renewable energy source (RES) contributions, electricity production levels, and the entry of new facilities and withdrawal of older ones.

Greece’s three existing EPA gas supply companies are all expected to register demand increases, according to the DESFA study’s figures, while the new EPA supply companies covering the mainland, central Macedonia, and eastern Macedonia and Thrace are expected to begin absorbing amounts as of 2020.

Gas demand for electricity production is expected to remain stable until 2020 before declining. Demand is also forecast to remain steady in the chemical industry and heavy industry.

Russia seeking mine interests in place of hydropower plans

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Russian officials have requested to operate the Vevi lignite mine close to Florina, northern Greece, as an alternative that would offset a stalled plan for the construction of two hydropower stations by Russian companies in Sykia and Pefkofyto, alongside the Achelous River in the northwest.

The alternative plan, forwarded to energy minister Panos Skourletis during his visit to Moscow yesterday, was made by the Russian officials as a result of legal complexities concerning the Sykia and Pefkofyto hydropower stations, now awaiting verdicts by the Council of State, Greece’s supreme administrative court.

Construction of the two hydropower stations by Russian companies had been incorporated into a Greek natural gas supply deal with Gazprom.

Russian companies have already expressed an interest to participate in the development of energy projects in Greece, especially in the field of electricity production. Prior to the Greek energy minister’s visit to Moscow, Russian authorities had revealed an interest to construct new power stations and revamp existing units.

Skourletis, during yesterday’s visit to Moscow, held discussions with his Russian peer Alexander Novak as well as officials from Gazprom and VEB Capital, a subsidiary of Russia’s Bank for Development and Foreign Economic Affairs.

The agenda also included talks on Russia’s latest natural gas pipeline project for Europe’s southeast – being referred to as both “Turkish Stream and “Greek Stream”, depending on its segment – which was stalled following the recent downing of a Russian fighter jet by Turkish forces.

Although bilateral relations between Russia and Tukey have been severely soured by the incident, the pipeline project, envisioned to pass through Turkey and northern Greece before crossing the Adriatic Sea to Italy, has not been cancelled, Greece’s energy minister announced following yesterday’s meeting with Novak.

“The plan’s strategic importance remains. Of course, the recent events between Russia and Turkey are a real obstacle, but the basic idea behind the pipeline must remain, and an approach, given the difficulties in Russian-Turkish ties, needs to be found,” Skourletis remarked. “I believe that the Russian and Greek side shares a common approach on this issue,” he added.

Novak told reporters that the two officials discussed the prospect of a Russian discount for natural gas supply to Greece. “We possess agreements that are valid until 2026. We are now discussing conditions and price levels,” Novak announced.

According to sources, Skourletis, as his agenda’s top priority, asked for Russia to soften its stance on a take-or-pay deal with Greece, activated as a result of a lower-than-expected absorption of Russian gas by Greece’s DEPA, the Public Gas Corporation. If upheld, Greece will need to pay for gas amounts not absorbed, which would affect the cost of natural gas in the Greek market. Natural gas demand has weakened in Greece as a result of the ongoing recession.

 

Energy ministers reshuffle Moscow meeting’s agenda

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Energy Minister Panos Skourletis will meet with his Russian peer Alexander Novak in Moscow today, but the two officials will work through a reshuffled agenda as a result of the recent downing of a Russian SU 24 fighter jet by Turkish forces, which has stalled thoughts for development of ‘Turkish Stream”, Russia’s latest natural gas pipeline proposal for southeast Europe, involving both Greece and Turkey, and a top-priority item until the jet incident.

The prospective natural gas pipeline, unofficially dubbed both “Greek Stream” and “Turkish Stream”, depending on its segment, has been envisioned to cross Turkish territory to the Greek-Turkish border area and run through Greece’s north. Thoughts of utilizing ITGI, a pipeline project long endorsed by the European Commission and planned to cross the Adriatic Sea from Greece to Italy, as an extension of the Russian plan, had recently increased the likelihood of “Greek Stream” being developed through this route rather than a vertical Balkan crossing.

Although halting the project has not been included in Russia’s official sanctions against Turkey, it is now definitely on hold.

Today’s talks between the Greek and Russian energy ministers will now focus primarily on electricity production, while the exisiting gas supply agreement between DEPA, Greece’s Public Gas Corporation, and Russia’s Gazprom is also expected to be discussed. These topics were recently discussed at a Greek-Russian working group for energy matters in Athens, as well as by a Greek-Russian interministerial committee in Sochi.

According to sources, Russian companies have already expressed an interest to take part in the development of Greek energy projects, especially electricity production. Russian companies, believed to be keen to construct new units and revamp existing ones, have requested to be updated on tenders to be staged.

 

Greece buying gas at lower prices than levels struck at Gazprom auction

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A natural gas auction held by Gazprom in early September that involved the participation of 15 European companies, none of which were Greek, produced deals at 203.30 euros per thousand cubic meter, according to sources, which are above the cost levels of supply agreements for the Greek market.

Greek companies did not take part in the auction as a result of the exisiting interconnection problems concerning Greece and central Europe.

The sharp decline of oil in international markets is the main reason for the price-level difference. The price of natural gas imported into Greece is pegged to international oil prices and revised every three months. Crude and petroleum product prices of the preceding six months are factored into the equation.

Natural gas prices in Greece are expected to drop further this coming winter. Besides developing natural gas into an extremely competitive energy source for household heating, lower prices are also establishing natural gas as an attractive alternative to lignite for electricity production. This is especially true of cases concerning older lignite-fired power stations, whose operating costs are high.

 

Ankara dealings with Moscow crucial for Turkish Stream

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The main subject on the agenda for today’s meeting between Turkish president Recep Tayyip Erdogan and his Russian counterpart Vladimir Putin in Moscow may be the Syrian crisis, but, as is being reported by Turkish media, the two leaders will also seek to resolve differences on conditions concerning Turkish Stream, Russia’s latest natural gas pipeline proposal to Europe from the south, via the Greek-Turkish border area.

Just days ago, Turkish and Russian officals announced that negotiations for the pipeline project had reached a standstill.

Greece, which has already signed a memorandum of cooperation and understanding with Russia for the project, is awaiting developments on the pipeline’s Turkish segment. No further progress can be made unless Ankara and Moscow agree on their respective terms.

According to Turkish press, the main problem stopping the two sides from reaching a deal is the price to be set for Russian gas to be supplied through Turkish Stream, a pipeline planned to offer an annual capacity of 15.75-billion cubic meters, instead of 63 billion cubic meters as had been originally intended.

Russia’s Gazprom and Turkey’s Botas have agreed to revise price levels every three years. However, since January, Turkey has pushed for a 10.25 percent price reduction as well as a one-billion dollar advance payment from Russia. Moscow has insisted that any talks on a price reduction cannot proceed unless Ankara first signs an agreement committing Turkey to the project’s development through its territory.

The Greek government is keeping a close watch on these developments as it is placing high hopes on the pipeline’s construction, which will become a more realistic prospect if the Russian-Turkish issues are overcome.

 

Household gas prices down by 15% compared to last year

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Gas rates for household consumption are expected to drop by 15 percent compared to levels of a year ago, driven down by the considerable drop in crude oil prices, especially in the first half of the year, as well as the euro-dollar exchange rate.

The country’s gas supply companies (EPA) are preparing to submit their price levels to RAE, the Regulatory Authority for Energy, for approval. Prices are expected to drop to between 58 and 59 cents per cubic meter, compared to 70 cents last year.

Gas prices offered by DEPA, the Public Gas Corporation, to the EPA companies operating in Greece are revised every three months and follow the trajectory of oil prices, with a six-month delay. In other words, within October, gas prices will plunge as crude oil prices did earlier this year.

This pricing formula applies for Russian gas supply to Greece, based on an agreement between DEPA and Russia’s Gazprom. Russian gas dominates the Greek market. A similar deal has been signed between DEPA and Algerian company Sonatrach.

If lower gas price levels are to be maintained throughout the upcoming winter, crude oil prices will need to maintain their downward trajectory and the euro-dollar exchange rate will need to remain relatively steady.

At present, EPA figures indicate prices will be lower in September compared to the previous month, and, barring any unforeseen developments, will remain at lower levels in the winter, officials believe.

Last year, subsidized supply of heating oil ended up being cheaper than natural gas, unprecedented for the Greek market. However, market conditions have now changed. Based on the latest bailout agreement, subsidy levels have been reduced. Though this is expected to affect demand for heating oil, demand will remain considerable.

Heating oil prices, at present, are 20 percent lower than they were last year, between 80 and 85 cents a liter, compared to 1.05 euros per liter last year.

 

Capital controls unexpectedly boost gas consumption

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Natural gas demand in Greece registered a substantial and unanticipated rise during July and August, contrary to expectations of a decline as a result of the economic slowdown prompted by the imposition of capital controls.

Instead, the arrival of capital controls, imposed by the Syriza-led government in late June, ended up serving as a catalyst for natural gas demand because the measure restricted electricity imports. Subsequently, the electricity shortage was covered by increased power production at gas-fueled power stations operated by main power utility PPC and independent producers.

Gas-fueled power stations run by PPC in Lavrio, southeast of Athens, Elpedison (ELPE, Edison, Eltech) in Thessaloniki, as well as two Heron (Terna) units over the two-month period needed to increase their gas consumption by well over 100 percent to meet electricity production requirements. Also highlighting the shift, gas-fueled power stations covered 10 percent of electricity demand in July, up from 5 percent in June.

According to data provided by natural gas grid operator DESFA, the inflow of natural gas in July and August was 15.4 percent higher than the equivalent period a year earlier. A total of 5,483,290 MWh of natural gas, approximately 471.5 million cubic meters, entered the country’s gas network’s three entrance points in Agia Triada (LNG), Sidirokastro (Russian natural gas), and Kipi (Azeri natural gas), compared to 4,753,487 MWh, or 408.8 million cubic meters, over the same two-month period in 2014.

The unexpected development, if continued, will serve to reduce the pressure being applied by suppliers on DEPA, the Public Gas Corporation, for the implementation of a take-or-pay agreement. The Greek gas company had agreed to have this condition activated, meaning compensation payments to suppliers, if gas orders failed to reach certain amounts.

 

 

DEPA chief: Russian pipeline would boost Greek energy security

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The development of Turkish Stream, Russia’s latest proposal for natural gas supply to Europe via the south, from the Greek-Turkish border region, would bolster Greek energy security, Spyros Paleogiannis, CEO at DEPA, the Public Gas Corporation, has told Russian news agency sputnik.

According to the news agency, Paleogiannis described Russian natural gas supply as being of high standards in terms of supply security, while adding that Russia has proved to be a relieable natural gas supplier to Europe.

Commenting on how effective an alternative energy source Iran could be, the DEPA official stated the country cannot replace Russia but could play a secondary role in gas supply to Europe.

“Russia is, by far, the most significant supplier to Europe and will continue to be,” Paleogiannis told the Russian news agency. “Iran will play a secondary role in natural gas supply to Europe,” he continued, noting as long as Western sanctions imposed on the country are lifted and no other obstacles stop Teheran’s entry into the European energy market.

 

 

‘South European Pipeline’ a model of cooperation, minister notes

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The Greek-Russian natural gas pipeline agreements signed just days ago in St Petersburg demonstrate that Greece, despite the recession and difficulties, is capable of building bridges and playing a leading role in paving the way for security in the energy sector and economy, Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis noted on his return to Athens over the weekend.

Offering comments to reporters, Lafazanis described the “South European pipeline”, Russia’s latest proposal for natural gas supply to Europe via the south, from the Greek-Turkish border as a “good pipeline” for a different Europe, one not split by post-Cold War divisions. The project has previously been refered to as “Turkish Stream”.

“The pipeline plan we agreed to in St Petersburg does not damage any third parties. On the contrary, it benefits all citizens and nations, offering an opportunity for access to natural gas and multiple options,” commented Lafazanis on a cooperative deal signed for the project’s Greek segment. “We’re not stopping any country that possesses natural gas and wants to transmit it through our territory. Greece supports the TAP project to carry Azeri gas, it supports the “south European pipeline” for Russia natural gas, and we are ready to also back a pipleline [East Med] to carry natural gas from the east Mediterranean.”

Greece can develop as a free-flowing energy bridge offering options for gas-producing countries and recipient countries needing gas and, generally, energy products, the minister noted.

The south European pipeline will be developed as a 50-50 joint venture between two companies representing Greek and Russian public-sector interests, Lafazanis noted.

“Above all, it is a major project for Greece. All citizens, regardless of ideological differences, are called upon to embrace and support its development, as it will offer substantial benefits for our national interests, the Greek economy and all the country’s people,” Lafazanis noted.

The US has already expressed its opposition to this pipeline proposal from Russia, while the EU is maintaining reservations.

Greece, Russia sign cooperative agreement for pipeline plan

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A cooperative agreement for Greek Stream – the local segment of Turkish Stream, Russia’s latest pipeline proposal for natural gas supply to Europe via the south, from the Greek-Turkish border area – was signed today between Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis and Russia’s Energy Minister Alexander Novak in St Petersburg.

The Greek energy minister also signed a joint declaration in support of the project – now officially named South European Pipeline – with Vladimir Dimitriev, chairman of Vnesheconombank-VEB, a Russian state-owned Bank for Development and Foreign Economic Affairs.

Both sides pledged to support all legal means to facilitate the pipeline project’s development. A joint statement was released noting that “intensive work on the project will commence immediately, beginning with the preparation of a feasibility study, technical studies, and other preliminary planning work for the South European Pipeline.”

Lafazanis, along with Prime Minister Alexis Tsipras, traveled to St Petersburg for a series of meetings on the sidelines of yesterday’s International Economic Forum (SPIEF – 2015), hosted by the Russian city. They were joined by top officials of the state’s energy apparatus – the main power utility PPC’s CEO Manolis Panagiotakis; DEPA, the Public Gas Corporation’s boss Spyros Paleogiannis; and ELPE Hellenic Petroleum chief Grigoris Stergioulis – reportedly to explore the possibility of doing business with BRICS members.

Tsipras meets with Gazprom head, BRICS bank officials

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Energy issues, including Greek Stream – the local segment of Turkish Stream, Russia’s latest pipeline proposal for natural gas supply to Europe via the south, from the Greek-Turkish border area – were discussed at a meeting in St Petersburg late yesterday between Prime Minister Alexis Tsipras and Gazprom chief Alexey Miller. The Greek head of state was accompanied by Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis.

The two Greek officials also met with board members of the BRICS Development Bank, now officially known as the New Development Bank (NBD), set up as an alternative to the US-dominated World Bank and IMF.

In St Petersburg to attend yesterday’s International Economic Forum (SPIEF – 2015), hosted by the Russian city, BRICS officials, representing the five-member association of emerging economies – Brazil, Russia, India, China, and South Africa – expressed interest to Tsipras for Greek cooperation with the NBD bank.

Tsipras and Lafazanis, the energy minister, were accompanied by the heads of Greece’s state energy apparatus – the main power utility PPC’s CEO Manolis Panagiotakis; DEPA, the Public Gas Corporation’s boss Spyros Paleogiannis; and ELPE Hellenic Petroleum chief Grigoris Stergioulis – on this trip, presumably to explore the possibility of doing business with BRICS members.

Tsipras is expected to sign an agreement at a meeting today with Russian president Vladimir Putin, formalizing Greece’s interest in the Greek Stream project.

Forgotten hydropower plants included in Russia dealings

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Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis has planned to be in Russia two days ahead of the St. Petersburg International Economic Forum (SPIEF – 2015), scheduled for June 18, to prepare the ground for a forthcoming visit by Prime Minister Alexis Tsipras, energy matters being at the core of the agenda for both visiting officials.

Greek government officials will strive to have completed procedures for the signing of a joint declaration offering no less than political support to Greek Stream, the local segment of Turkish Stream, Russia’s latest pipeline proposal for gas supply to Europe from the south, via the Greek-Turkish border area.

The possibility of an advance payment by Russia of between three billion and five billion euros, a prospect that had emerged last April, following an official visit by Tsipras to Moscow, has since waned. However, Russia’s Gazprom appears prepared to finance Greek Stream in exchange for future earnings to be generated by the project – if a consortium is established for the pipeline’s construction and operation. An amendment has already been submitted to Greek Parliament for the consortium’s establishment.

On a less favorable note, Russia has once again raised the issue of a 250 million-euro sum owed by Greece to Russian companies for preliminary work on two hydropower station projects at Sykia and Pefkofyto along the Acheloos River in western Greece. The projects were not developed. Russian officials have proposed that the sum be offset in future dealings. Russia would also settle for the companies taking on another project, or projects, of equal worth.

A Russian consortium with Prometheus Gas – a 50-50 Greek-Russian venture operated by the Copelouzos Group and Gazprom – as a key component, had been awarded the two hydropower projects, for a 2X60 MW facility in Sykia and a 2X80 facility in Pefkofyto, as part of a wider deal concerning Russian gas supply to Greece.

The Copelouzos Group is the corporate representative for Russian companies operating in Greece. Its chairman and managing director, Dimitris Copelouzos, will be a key speaker at the St. Petersburg International Economic Forum.

Returning to Greek Stream, the project’s prospects have been bolstered by Greece’s initiative to propose a route headed west, through the Adriatic Sea, to utilize a previous IGI interconnection plan linking Greece and Italy. The plan has been backed by the Italian companies ENI and Edison, including the latter’s parent company, France’s EDF. The EU and US  have not embraced the Turkish Stream plan, but the recent support being expressed by Italy and France may help soften their stance.

DEPA awaiting Gazprom news on 100m-euro charge write-off

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Greek officials are anxiously awaiting a Russian decision on whether the country’s gas giant Gazprom will scrap a charge of about 100 million euros owed by DEPA, the Public Gas Corporation, prompted by a take-or-pay clause that has come into effect as a result of a Greek misjudgement on its gas order for 2014.

The take-or-pay clause, included in an agreement between DEPA and GazpromExport, a Gazprom subsidiary, was activated after Greece overestimated its gas order from Russia for 2014 as a result of lower domestic gas consumption amid the recession.

Local officials are now waiting to see if Russia will write off the charge, and, if so, whether it will be a conditional move binding DEPA to other commitments over the next few years.

Following up on a recent official visit to Athens by Gazprom CEO Alexey Miller, DEPA requested to be informed of the final decision to be taken by GazpromExport, an energypress source said. The subsidiary firm responded by noting it is expecting a reply from its parent company, he source added.

Miller, who was in Athens just under a month ago, held talks with Prime Minister Alexis Tsipras and Production Reconstruction, Environment and Energy Minister Panagiotis Lafazanis. He promised that the amount owed by DEPA would be written off. But no documents were signed.

“Quite obviously, the pending issue with DEPA is not a top-priority matter for Miller,” the source commented.

Gazprom Export officials, in preceding negotiations wth DEPA officials, had gone as far as to say that the amount owed would be significantly reduced, while gas-order quotas would be rolled over to subsequent years.

More recently, amid the seemingly warming bilateral ties being established between Greece and Russia, Miller, on his visit to Athens, went further by saying the 100 million-euro amount owed by DEPA would be excused, without going into any further detail.

Besides offering major financial relief for DEPA, a write-off by the Russians would also benefit major natural gas consumers, such as the main power utility PPC, private-sector electricity producers, and the country’s three gas supply (EPA) companies, which would otherwise be burdened by the take-or-pay clause’s cost, if upheld by Gazprom.  Such an event would severely reduce any benefits gained by gas consumers from lower-priced natural gas, following the drop of oil prices in the international market.

Natural gas consumption in Greece slumped by 25 percent in 2014, and fell by 8 percent in the first quarter of 2015, compared to the equivalent period last year. The continued drop in demand threatens to also activate the take-or-pay clause for 2015.

 

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.

 

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.