IGB

Elpedison makes dynamic gas market move for 2020, Balkans also eyed

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Elpedison’s strong turnout for gas grid operator DESFA’s annual reservation of LNG slots at the Revythoussa terminal just off Athens highlights the company’s strategic decision aiming for a leading role in the wholesale gas market, which it entered last year.

Elpedison has reserved 22 slots, roughly one-third of a total of 65 slots offered by DESFA for the terminal in 2020.

Mytilineos, the country’s biggest LNG importer, also booked 22 slots. Gas utility DEPA reserved 14 slots, while Heron booked seven slots.

Elpedison considers its involvement in the wholesale and retail gas markets just as important as its activities in the electricity market, chief executive Nikos Zahariadis underlined in comments to energypress. Elpedison will bolster its gas market presence in 2020, he added.

Storage and gasification capacity increases at the Revythoussa LNG terminal have played an instrumental role in helping liberalize Greece’s gas market. This development, along with lower-priced LNG, compared to pipeline gas, has created market prospects and opportunities. Elpedison operates two gas-fueled power plants.

Besides the Greek market, Elpedison, just like all other corporate groups importing and trading gas, also sees opportunities in Balkan markets. The company already sells modest gas quantities in Bulgaria and Romania but is aiming for a significant increase in 2020.

Greece is developing into a gas hub for supply to the wider southeast European region, Zahariadis, Elpedison’s chief executive, noted. Major international gas infrastructure projects such as the TAP, IGB, Alexandroupoli FSRU and underground gas storage facility in the offshore South Kavala region are expected to be completed within the next few years, he stressed.

 

IGB agreement, target model on agenda of minister’s Sofia visit

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The signing of a Greek-Bulgarian bilateral agreement for the IGB gas grid interconnector, a project of major geopolitical significance, may be at the top of the agenda of the energy ministry leadership’s official visit to Sofia tomorrow and Thursday, but the target model, also on the agenda, is just as crucial.

The target model is vital as it entails the coupling of the Greek and Bulgarian electricity markets, needed for the establishment of regional electricity market, a key EU energy policy.

Given the Sofia trip’s demands, energy minister Costis Hatzidakis will be joined by his deputy Gerassimos Thomas.

Hatzidakis, on this trip, is expected to sign a bilateral agreement for the IGB gas pipeline’s construction and operation. A shareholders’ agreement and a European Investment Bank (EIB) loan agreement for the project are also planned to be signed.

The Greek-Bulgarian gas pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora, creating a second interconnection point for the Greek and Bulgarian gas systems, in addition to an existing station in nearby Sidirokastro.

The new project, to offer an annual capacity of 5 billion cubic meters, will begin operating at a lower capacity level of 3 billion cubic meters.

The IGB pipeline is planned to be linked to the TAP project, running across northern Greece. Combined with the Bulgaria-Romania and Bulgaria-Serbia interconnections, the IGB will contribute to the establishment of a vertical corridor through the Balkans and connect central Balkan countries with Caspian gas supply.

IGB bilateral agreement for construction start to be signed in Sofia

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A Greek-Bulgarian bilateral agreement enabling the commencement of construction work on the IGB gas grid interconnector is set to signed in Sofia during a two-day meeting scheduled for October 9 and 10.

Complementary agreements concerning the project, the most significant of these being a shareholders’ agreement and a loan agreement with the European Investment Bank (EIB), will also be signed by officials over the two days.

The Greek-Bulgarian pipeline project, measuring 182 kilometers, will link Komotini, in Greece’s northeast, with Stara Zagora. It will serve as a second interconnection point for the Greek and Bulgarian gas systems, in addition to an existing station in nearby Sidirokastro.

The new project, to offer an annual capacity of 5 billion cubic meters, will commence operating at a lower level of 3 billion cubic meters.

The IGB pipeline is planned to be linked with TAP, running across northern Greece. Combined with the Bulgaria-Romania and Bulgaria-Serbia interconnections, the IGB will contribute to the establishment of the vertical corridor through the Balkans and connect central Balkan countries with Caspian gas and the TAP pipeline.

IGB’s planning, construction and operation has been taken on by ICGB, the project’s Sofia-based consortium, a 50-50 joint venture representing the state-controlled Bulgarian Energy Holding (BEH) and IGI Poseidon, involving Greek gas utility DEPA and Edison.

Balkans-focused energy forum on eve of Thessaloniki fair

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

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

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

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

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

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

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

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

 

Continuation of energy strategy minister’s guide at Cairo forum

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Recently appointed energy minister Costis Hatzidakis will formally commence work on promoting Greece’s international energy relations at his first meetings abroad, today and tomorrow, at the East Med Gas Forum in Cairo.

The minister, in recent speeches, has already made clear his interest in supporting a national strategy shaped to bolster the country’s energy security, elevate its geopolitical role and fuel economic growth.

Strategic partnerships with Cyprus, the USA, Israel and Egypt will play a pivotal role in this effort.

Greece, Cyprus, Egypt, Israel, Italy, Jordan and the Palestinian Authority will all be represented at the Cairo forum.

Hatzidakis, Greece’s energy minister, is also expected to discuss energy partnerships and regional security with US energy secretary Rick Perry, who is in the Egyptian capital as part of a tour of the east Mediterranean.

Development of the submarine East Med gas pipeline, a project promising security and stability for the wider region, is a leading priority  for Greece.

On a wider level, the minister can be expected to carry on supporting a national strategy pursued over the past decade to establish Greece as a pivotal energy player in the region and key problem solver of regional energy partnership issues.

As for other major energy infrastructure projects, the new Greek government will continue to provide national support for the swift completion of the Trans Adriatic Pipeline (TAP), planned to transport Caspian natural gas to Europe, and the Greek-Bulgarian IGB gas grid interconnector. Other investment plans such as the Alexandroupoli FSRU and the Kavala underground gas storage facility will also keep receiving the support of Greece’s administration.

IGB tenders, moving fast, aim for winning bidders by May

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Procedures leading to pipeline procurement and construction contracts through a tender concerning the Greek-Bulgarian IGB gas grid interconnector are progressing rapidly, the aim of the project’s officials being to announce the winning bidders by May and give the go-ahead for work to commence in June.

The project’s tenders are being staged amid a period of heightened geopolitical interest and activity in the Balkans, which has spurred hopes of the IGB’s completion and launch within the first half of 2020.

Greek energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova are expected to acknowledge the swift progress being made at a meeting in Sofia next Monday. They may even announce an even swifter schedule for the project’s completion.

ICGB, the IGB project’s consortium, is a joint venture involving YAFA Poseidon – a Greek gas utility DEPA half-owned subsidiary – and the state-controlled Bulgarian Energy Holding (BEH).

Two of five candidates submitted bids just days ago to the second phase of a tender concerning the design, procurement and construction of the gas pipeline, a 182-km stretch budgeted at 145 million euros.

Greece’s J&P Avax and a rival consortium comprising Italy’s Bonatti and two Bulgarian firms, DZZD (IGB-2018), were the two bidding formations. Their technical proposals will now be assessed and offers unveiled in the effort to declare a winning bidder next month.

A pipeline supply tender budgeted at 60 million euros has also reached an advanced stage. Greece’s Corinth Pipeworks has entered this procedure and is up against a Turkish-Bulgarian consortium.

A preceding third tender for the role of project manager, to monitor the project on behalf of shareholders, has already produced a winning bidder, a consortium named TIBEI, whose 5.57 million-euro offer secured this contract.

TIBEI is comprised of Belgium’s Tractebel Engineering SA, Italy’s Tractebel Engineering SRL, Austria-based INTBER GMBH, as well as two Bulgarian firms, Ipsilon Consult OOD and Engineering EAD.

 

 

IGI Poseidon licensing procedures ‘ready by summer’

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The prospective IGI Poseidon gas pipeline, planned to run though Greece’s north and across the Adriatic Sea to Italy as a supply route for Russian gas to Europe, is expected to be fully licensed by the summer, energypress sources have informed.

Regarded as an investment plan of major global interest, IGI Poseidon is now at the public consultation stage after years of preliminary work.

Its developers, the Greek gas utility DEPA and Italy’s Edison, are currently staging a public consultation procedure on the project’s environmental impact study. Interested parties have until March 27 to submit their views.

The Poseidon company intends to make final investment decisions once all licensing and market test procedures have been completed.

DEPA, Edison and Gazprom have signed a memorandum of cooperation to explore the possibility of the project’s link with Turkish Stream, planned to transmit Russian gas to the Greek-Turkish border. Officials are now also looking into whether the pipeline can be connected with East Med, to link the Greek, Cypriot and Israeli systems, and the Greek-Bulgarian IGB route.

Offers soon for IGB gas pipeline project tenders, nearing completion

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Three tenders offering contracts for Greek-Bulgarian IGB gas grid interconnector’s project manager, pipeline procurement and construction are approaching completion.

Offers for the tender to appoint a project manager, to monitor development on behalf of shareholders, are expected this month.

Greece is well represented in the tender concerning the construction of the IGB pipeline, planned to cover a 182-km stretch and budgeted at 145 million euros. A total of five consortiums with three Greek firms on board have advanced to this tender’s second round.

Germany’s Max Streicher has teamed up with Greece’s Terna; China Petroleum Pipeline Engineering has joined forces with Aktor; and J&P Avax is the third local qualifier. Their bids are expected next week.

ICGB, the IGB project’s consortium, a joint venture involving YAFA Poseidon – a Greek gas utility DEPA half-owned subsidiary – and the state-controlled Bulgarian Energy Holding (BEH), plans to have appraised these offers within a month before announcing a preferred bidder at the end of April.

The IGB is planned to be linked with the TAP route, offering Bulgaria and the wider southeast European region access to Caspian gas as well as LNG.

 

First round of crucial market test for Alexandroupoli FSRU launched

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Shareholders at Greek gas company Gastrade, seeking to co-develop an FSRU project in Alexandroupoli, northeastern Greece, will need to make final investment decisions following a market test, whose first round, entailing non-binding expressions of interest, was launched yesterday.

Binding bids, for FSRU capacity reservations, will be made in the procedure’s follow-up round.

Granted PCI status by the EU, the Alexandroupoli FSRU is being widely supported, politically, at national, European and cross-Atlantic levels.

Greek gas utility DEPA and Bulgaria’s BEH are both seen as market test certainties. Plans are now at advanced stages for both to each hold 20 percent stakes in a consortium for the Alexandroupoli FSRU’s development. Final approvals for the consortium entries of both are anticipated but still pending.

The emergence of other players, for FRSU capacity reservations, will be pivotal for the project’s development prospects. Gastrade and its project partners will be hoping to see the emergence of key international players aiming to supply gas to the wider region, including US gas exporters, firms associated with the prospective Greek-Bulgarian IGB link, including Serbian, as well as traders operating in the region.

For quite some time now, there has been talk of a US firm entering the Alexandroupoli FSRU consortium with a 20 percent stake. Cheniere has been named as a possibility but another undisclosed US contender is also believed to be in the running.

The Alexandroupoli FSRU consortium was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, also joined. At present, Gastrade holds a 40 percent stake and Gaslog holds 20 percent. DEPA and BEH are also expected to acquire respective 20 percent stakes, while any newcomer is expected to take on half of Gastrade’s current stake.

Agreements signed for IGB financing, TAP interconnection

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Bulgarian Energy Holding (BEH) and the European Investment Bank (EIB) have signed a Memorandum of Cooperation for the financing of the Bulgarian side of the Greek-Bulgarian gas grid interconnector (IGB), while, in a concurrent development, the IGB consortium and the TAP consortium, constructing the gas pipeline to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to Italy, have also signed an interconnection agreement to link the two pipelines.

Both agreements were signed at a meeting held by CESEC, the Central and South-Eastern European Gas Connectivity initiative. Greek energy minister Giorgos Stathakis, his Bulgarian counterpart, Temenuzhka Petkova, as well as other highly ranked EU officials attended the CESEC session.

The Greek energy ministry released an announcement underlining the significance of these two projects for Greece and the wider Balkan region. The IGB promises to carry gas transmitted through the TAP pipeline to the Bulgarian network as well as those of other EU member states, the energy ministry statement stressed.

The preliminary financing agreement between BEH and the EIB concerns a 110 million-euro loan with favorable terms to be guaranteed by the Bulgarian state.

Providing further backing, Greek Prime Minister Alexis Tsipras and his Bulgarian counterpart Boyko Borisov also signed a political agreement of support for the IGB interconnector in the presence of European Commission president Jean-Claude Juncker.

The Greek and Bulgarian sides agreed to commence work on the IGB by the end of 2018 for an operational launch within 2020.

Rush needed to overcome IGB hurdles, stick to time frame

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Greek and Bulgarian officials have admitted the prospective IGB gas grid interconnector, already well behind schedule, is facing new delays and issues. A rush will be needed to overcome various hurdles and stick to the project’s time frame.

Troubling news initially emerged from Bulgaria, when it was recently reported that  tenders for sub-contractors have been bogged down by legal action taken by firms not associated with the project’s development, including a winery.

ICGB, the IGB project’s consortium – involving the state-controlled Bulgarian Energy Holding (BEH) with a 50 percent stake, as well as DEPA, Greece’s public gas corporation, and Italy’s Edison with 25 percent stakes – has confirmed this news.

Despite noting that it expects this obstacle to be cleared within weeks, the consortium expressed concern of the emergence of similar issues in the future.

Earlier this month, the consortium announced the resignation of its chief executive Elio Ruggeri, who is now in charge of the LNG division at Italy’s Snam.

In comments offered this week, Bulgaria’s energy minister Temenuzhka Petkova insisted that the project’s current schedule remains valid. She also noted that EU funding worth 37 million euros and initially intended to finance a Bulgarian-Serbian interconnection could be redirected towards the IGB. The minister did not elaborate and offered no explanations as to how such a change of plan could impact the Greek-Bulgarian interconnection’s development and time frame. Petkova also informed that the IGB consortium could secure a more favorable financing agreement.

Her Greek counterpart Giorgos Stathakis, speaking at an Athens Energy Forum event yesterday, made reference to the IGB, noting its construction is expected to commence “within 2018”. Given the consortium’s most recent time frame, scheduling work to begin by this coming June, the project, it appears, is headed for a further delay.

Dimitris Tzortzis, the recently appointed chief executive officer at DEPA, Greece’s public gas corporation, believes work on the IGB will start in the third quarter this year. He described the project’s existing schedule as demanding. “We are depending considerably on continued full support from both the Greek and Bulgarian governments for the timely completion of related host government agreements,” Tzortzis commented.

The DEPA official added that he expects the IGB pipeline to begin operating in the second half of 2020.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Plenty of preliminary work is still needed before the project’s development commences.

The IGB is receiving full political support from Greece, Bulgaria the EU and US. Combined with the TAP pipeline, to run horizontally across northern Greece, the IGB promises to serve as a vertical route for the wider region. TAP and IGB officials are currently engaged in advanced talks for an agreement to interconnect the two pipelines.

 

IGB construction, procurement tenders to be announced January

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Development of the Greek-Bulgarian IGB gas grid interconnector is expected to commence in mid-2018 as documentation concerning two project tenders, one for construction, the other for pipeline procurement, has been finalized, according to sources.

Both tenders are expected to be announced in January, which would enable the project to begin midway through next year, as ICGB, the project’s consortium, currently plans.

A number of key institutions, including the European Investment Bank (EIB), have expressed an interest in the project’s financing. Participation by the European Fund for Strategic Investments (EFSI) has not been ruled out.

The IGB is expected to be completed by 2020 along with TAP, the Trans Adriatic Pipeline, a project to transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing northern Greece, Albania and the Adriatic Sea, to southern Italy.

State-controlled Bulgarian Energy Holding (BEH) holds a 50 percent stake in the ICGB consortium, while DEPA, Greece’s public gas corporation, and Italy’s Edison control 25 percent stakes.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Its development promises to offer Azerbaijani natural gas an alternative route into southeast European markets. Procedures are already in motion for an extension to Serbia. The project will also enable LNG supply to regional countries currently subject to limited gas supply and facing major energy security issues.

New leadership appointed at DEPA gas corporation

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The two leading officials at state-controlled DEPA, the Public Gas Corporation, have been replaced by new faces hailing from the private sector, the energy ministry, TAIPED, the state privatization fund, and ELPE, which holds a 35 percent stake in DEPA, have decided, it has been confirmed.

Theodoros Kitsakos, DEPA’s outgoing chief executive officer, has been replaced by Dimitris Tzortzis, who possesses an extensive track record in private-sector enterprises involved in networks and telecommunications, as well as public administration.

Velissarios Dotsis, who also hails from the private sector and, in addition, has worked at Enterprise Greece, a government-sponsored group promoting investment opportunities in Greece and exports, has been named the new DEPA president.

The gas corporation’s new leadership will need to tackle a wide range of issues, including development of international projects such as the Greek-Bulgarian IGB interconnector; the floating LNG terminal at Alexandroupoli, northeastern Greece; matters concerning the Greek energy market’s liberalization; DEPA’s future role in the country’s retail natural gas marketl as well as the debt problems of two major-scale customers, ELFE (Hellenic Fertilizers and Chemicals) and EBZ (Hellenic Sugar Industry).

Tzortzis, the new chief executive officer, is a graduate of the National Technical University of Athens, where he studied Electrical Engineering and Computer Engineering. His past work contracts have included a 14-year tenure at Intracom, spells at Attica Telecommunications, HOL, the secretary general post at EETT (Hellenic Telecommunications & Post Commission) between May, 2015 and April, 2016, when he resigned, as well as an Intralot subsidiary.

 

 

 

BEH to soon enter Alexandroupoli FSRU with 25% stake, deputy says

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Bulgarian Energy Holding (BEH) expects to soon enter a consortium planning to develop a floating LNG terminal in Alexandroupoli, northeastern Greece, with a 25 percent stake, the company’s deputy chief executive officer Severin Vartigov noted during a speech at Energy Academy, a recent conference staged by the Greek Energy Forum in Athens.

Vartigov described the Alexandroupoli FSRU and the Greek-Bulgarian IGB gas pipeline interconnection as complementary projects to contribute to source  diversification and supply security in the wider southeast European region.

BEH will acquire a 25 percent stake in the Alexandroupoli FSRU consortium as soon as a due dilligence procedure has been completed, the BEH official noted.

The Alexandroupoli FSRU plan was initiated by Gastrade, a member of the Copelouzos group, before Gaslog, an international LNG carrier, and, most recently, DEPA, the Public Gas Corporation, also joined in. Besides BEH, Tellurian Energy, a US firm, has also considered entering the consortium.

Vartigov reminded that a construction permit for the IGB project’s Bulgarian segment was issued in September. He noted the project soon stands to secure additional EU funding worth 37.5 million euros for the increased level of competitiveness the project promises to offer.

The BEH deputy noted the IGB consortium is working intensively to ensure EU funding.

Vartigov told the conference the IGB interconnection will be completed and ready to operate by the end of 2019.

The Bulgarian official also expressed aspirations for development of a Serbian-Bulgarian gas pipeline interconnection. He described this plan as a low-cost project as Serbia has already been offered EU funding that would cover 60 percent of the cost of the segment covering Serbian territory. BEH is ready to cover the cost concerning the Bulgarian side, Vartigov said.

A Romanian-Bulgarian gas pipeline interconnection has been completed but, at present, can only flow one way, from south to north, as a result of low pressure hampering Romania’s natural gas grid, Vartigov noted. He said he is confident the Romanian government will soon install new compressors to boost the national gas grid’s pressure and enable reverse flow.

 

 

DEPA chief invites Serbia to take part in Alexandroupoli FSRU, IGB pipeline

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The head official at DEPA, Greece’s Public Gas Corporation, has extended an invitation to Serbia for participation in major energy projects planned for the region, namely the Greek-Bulgarian IGB gas pipeline interconnection and a floating LNG terminal in Alexandropoli, northeastern Greece.

Theodoros Kitsakos, DEPA’s chief executive officer, asked Serbian officials for the country to become involved in these projects during a series of meetings in Serbia.

Kitsakos visited the neighboring country to take part in an ecomomic forum earlier this week, held to discuss regional energy developments.

The DEPA chief met with key Serbian officials, including the gas utility and energy ministry heads, as well as energy-sector entrepreneurs, as part of an effort to promote DEPA’s strategic plan for the wider region.

Speaking at the economic forum, Kitsakos stressed the considerable gas needs of the wider Balkan region and Europe, overall, require the utilization of additional supply sources.

European gas consumption requirements represent 13 percent of global demand but the continent’s gas deposits amount to just one percent of the world’s total supply, Kitsakos pointed out.

EU additional grant decision for IGB expected in first quarter of 2018

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ICGB AD, the company engaged in the development of the Interconnector Greece-Bulgaria (IGB) project, currently has access to an approved European Energy Program for Recovery grant that may reach as much as 45 million euros, Teodora Georgieva, executive officer at the ICGB joint venture, has told Azerbaijani news ageny Trend

“Furthermore, the project’s company is involved in an ongoing application process for structural funds offering [additional] financing to Bulgaria and Greece, as the targeted additional grant financing to be obtained by both countries amounts to 39 million euros and 12 million euros, respectively,” said the executive officer.

The additional EU structural funds grant for Greece and Bulgaria is subject to evaluation by the European Commission and the final decision is expected in the first quarter of 2018, she added.

Georgieva noted that besides the approved grant financing and the open application for additional grant financing, the Bulgarian government has approved, in the adopted budget for 2017, a state guarantee of up to 110 million euros in negotiated borrowing for the ICGB project.

She recalled that an 80 million-euro state guarantee for the project was first approved in the 2015 state budget before being increased to 110 million euros in the 2016 state budget.

“The total investment cost of the project is estimated at approximately 240 million euros (excluding the value-added tax) out of which 220 million euros account for capital expenditures. The funds for the project are to be provided by a grant financing, shareholder loan / equity and external loan financing,” added Georgieva.

The IGB gas pipeline will enable supply to Bulgaria of Azerbaijani gas, especially gas produced by Azerbaijan’s Shah Deniz 2 field. The IGB is planned to be connected to the Trans Adriatic Pipeline (TAP), offering Shah Deniz field gas deliveries to European markets. TAP will run across Greece, Albania and the Adriatic Sea to Italy.

The initial capacity of IGB will be 3 billion cubic meters of gas.

Alexandroupoli FSRU project headed for PCI list reentry

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The prospective floating LNG terminal in Alexandroupoli, northeastern Greece, stands a serious chance of regaining its place on a list of EU Projects of Common Interest (PCI), the results of a latest regional working group meeting in Brussels have indicated.

The Greek government’s effort to put the Alexandroupoli floating storage regasification unit (FSRU) back on the PCI list, which would facilitate EU funding, is believed to have gained momentum. The project is now expected to be placed in a second-tier group of projects seeking entry into the PCI list and, from there, eventually be promoted to the main PCI list, an energypress source informed.

The Alexandroupoli FSRU, to be developed by Gastrade, is expected to gain further PCI credibility once plans to develop the nearby Greek-Bulgarian IGB gas interconnector have been finalized.

As was recently reported by energypress, a plan to transform a depleted natural gas deposit in south Kavala, northern Greece, into an underground gas storage facility has regained its place on a revised PCI list, released on June 30.

The south Kavala underground gas storage facility had been removed from the PCI list during a revision made two years ago.

All other infrastructure projects of Greek interest have retained their places on this revised PCI list. These include the Poseidon gas pipeline, planned to run from Greece to Italy, indicating that this project is a serious contender for a role in a prospective new route to carry Russian gas to Europe (Turkish Stream) as well as another major project to bring gas to Europe from the eastern Mediterranean (East Med).

The Euro Asia Interconnector, a submarine cable project to link the Greek, Cypriot and Israeli electricity networks, as well as East Med, a prospective gas pipeline to transmit gas from Cyprus’s Exclusive Economic Zone (EEZ) to mainland Greece via Crete, have also retained their places on the PCI list.

So, too, has the IGB, the Greek-Bulgarian Interconnector, for which a final investment decision is expected imminently.

Tesla, a prospective natural gas pipeline to offer a link from Greece to Austria, is also on the updated PCI list.

 

 

US envoy displays interest in Greek, Bulgarian energy cooperation

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The US Department of State’s Acting Special Envoy and Coordinator for International Energy Affairs, Mary Warlick, expressed a strong interest in Bulgaria’s regional gas interconnection projects, especially the IGB, to link Greek and Bulgarian gas transmission systems, during a meeting with leading Bulgarian government officials.

The developing energy partnership between Greece and Bulgaria, seen as crucial for energy security in southeast Europe, has drawn the attention of the USA amid its rivalry with Russia.

Besides Greek-Bulgarian energy cooperation, Warlick and the Bulgarian officials, Deputy Prime Minister Tomislav Donchev and Foreign Minister Ekaterina Zakharieva, also discussed other Bulgarain strategic plans in the energy sector, such as gas transmission interconnections with Turkey, Serbia and Romania.

In comments following the meeting, Zakharieva stressed that these projects are pivotal for energy supply diversification, not only for Bulgaria but the entire southeast European region.

Commenting on the Greek-Bulgarian IGB project, Zakharieva noted that the project’s development would enable a natural gas link between Europe’s north and south. Transmission of major Azerbaijani natural gas amounts, exceeding one billion cubic meters, would be possible once the Trans Adriatic pipeline begins operating, the Bulgarian official informed.

The IGB project also dominated a meeting in Sofia several days ago between Greek energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova. The two officials agreed on a final IGB market test to take place in autumn. Gas traders will be expected to submit binding bids for allocation of pipeline capacity.

Respective National Strategic Reference Framework (NSRF) funding available to the two countries through the EU funding program has been ensured for the IGB project.

 

IGB’s final market test to take place in autumn, officials agree

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A final market test for the prospective IGB (Greek-Bulgarian Interconnector), entailing the submission of binding bids by gas traders for the allocation of pipeline capacity, will take place this coming autumn, officials agreed at a meeting in Sofia today involving the participation of energy minister Giorgos Stathakis and his Bulgarian counterpart Temenuzhka Petkova.

EU funding for the IGB project has been ensured through respective National Strategic Reference Framework (NSRF) programs, Teodora Georgieva and Konstantinos Karayannakos, the executive officers of ICGB, the consortium established to develop the IGB project, informed the meeting’s participants while also stressing that major progress has been made over the past two years.

The project’s licensing procedure is at an advanced stage and awaiting pending regulatory decisions, the ICGB officials informed.

Stathakis and Petkova also discussed the prospective floating storage regasification unit (FSRU) in Alexandroupoli, northeastern Greece.

The IGB and Alexandroupoli FSRU will be designed to complement each other while the development of these two projects promises to create a competitive market that will have a positive impact on regional natural gas price levels, the Greek energy ministry noted in a statement.

The productive cooperation achieved between Greece and Bulgaria in the energy sector promises to ensure natural gas supply diversification in southeast Europe, the ministry’s announcement stressed.

The two ministers pledged to further enhance the mutually beneficial Greek-Bulgarian cooperation in the energy sector.

Officials at the meeting agreed that the Alexandroupoli FSRU’s completion will need to coincide with the commercial launch of the IGB project, scheduled for early 2020.

Vertical Corridor preliminary work progressing, new MoU to be signed

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DESFA, Greece’s natural gas grid operator, is expected to sign a new Memorandum of Understanding within the next few days with its counterpart operators in Bulgaria (Bulgartransgaz), Hungary (FGSZ) and Romania, (Transgaz) as well as ICGB, the consortium established to develop the prospective IGB (Greek-Bulgarian Interconnector) pipeline project. The new MoU’s aim will be to explore the possibility of interconnections beyond Bulgaria, with Romania and Hungary, a stretch that would represent a big part of the Vertical Corridor.

Activities to be carried out by authoriities as part of this process will include an examination of which projects need to be developed, as well as the technical requirements of interconnections and  compressor stations.

The anticipated MoU will come as the next step following a Joint Statement signed by the four operators and ICGB last September in Budapest, on the sidelines of a Central and South Eastern European Gas Connectivity (CESEC) meeting chaired by the European Commission.

For that statement, the signees declared an intention to bolster their efforts, at technical and regulatory levels, for the development of the Vertical Corridor, expected to be comprised of a network of short pipelines to transmit natural gas from Greece all the way to Ukraine, and vice versa. This project promises to increase the diversification of supply sources in the intermediate countries – Bulgaria, Romania and Hungary.

The IGB will carry Azerbaijaini natural gas stemming from the Shah Deniz 2 field and is expected to be linked with the TAP project, currently under construction and planned to cross northern Greece, Albania and the Adriatic Sea, all the way to southern Italy.

Construction of the IGB project is expected to begin in 2018 and completed early in 2020.

Authorities are scheduled to meet again in Sofia on July 10 and 11.

IGB construction expected to begin at end of year

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Construction of the prospective IGB (Greek-Bulgarian Interconnector) project will begin at the end of this year, officials involved in the project have ascertained.

According to sources, an additional market test aiming to increase the commitment of companies with respect to their pipeline capacity reservations is essentially already underway, despite the fact that the process has yet to be officially launched. Negotiations with gas companies are already being held.

Regardless of the results to be produced by these negotiations, the IGB project is expected to be developed as it ranks as a leading EU infrastructure priority.

 

Greece also impacted by Nord Stream II developments

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A series of developments last week concerning the construction of the Russian Nord Steam II gas pipeline project could impact the southeast European region, including Greece, in various ways.

Maros Sefcovic, the European Commission vice president responsible for Energy Union, announced a timeline for talks with EU member states, at which authority will be sought by Brussels ahead of negotiations with Gazprom for the Nord Steam II, which would expand deliveries of Russian natural gas to Germany.

These talks with EU member states are expected to take place in late August, enabling negotiations with Russian officials immediately afterwards. Russia has not embraced the prospect of the European Commission’s step-by-step process, requiring bilateral agreements.

Europe is currently divided into two camps over Nord Steam II. On the one side, a number of countries have grouped together as the project’s development would deprive them of Russian gas transit fees. At the other end, Germany and various European companies involved in the pipeline’s prospective construction are pressuring the European Commission to endorse its development. Brussels will need to balance these opposing sides while also keeping in mind energy supply security in the EU.

Germany’s pressure has softened the European Commission’s view of the Russian pipeline plan, as indicated by a number of recent legal revisions.

Adding to the complexity, the US Senate recently voted in favor of sanctions against Russia, including in the energy sector, a development that would prevent Russian and foreign enterprises from engaging in oil and natural gas deals. These proposed sanctions still need to be signed by President Donald Trump to take effect. EU member states, especially Germany and Austria, both traditional Gazprom business partners, strongly object to the US Senate proposal.

As for Greece’s neighbors, Bulgaria has kept a close watch on the Nord Steam II developments. Following the cancellation of South Stream, Sofia proposed to Russia and other suppliers a plan entailing the establishment of a natural gas hub in Varna, on the Bulgarian Black Sea coast.

Russia’s reception to the idea has been lukewarm until now but the proposal is gaining some momentum. The development of Nord Steam II is expected to also provide impetus to the Bulgarian proposal, a submarine crossing through the Black Sea to Varna, its intention being to supply the wider region, including other parts of Europe. This is an alternative plan to Turkish Stream, also supported by Sofia, as a second priority.

Bulgaria’s stance runs contrary to the Greek position. Athens would prefer the Russian gas route to run through Greek territory, within the framework of the Poseidon plan. The two sides will need to strike a balance as both are seeking to work together to develop the IGB interconnector, which would offer a Greek-Bulgarian gas link.

 

IGB launch date reset for first quarter of 2020 in revised project plan

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Construction work on the prospective IGB (Greek-Bulgarian Interconnector) has been rescheduled to start within 2018 and the commercial launch set for the first quarter of 2020, according to the project’s latest timeline revision, presented by its contractor, ICGB, to European Commission officials in Brussels late last month.

ICGB presented its revised IGB plan as part of the effort to seek PCI (Projects of Common Interest) classification, which would ensure EU funds. Other European PCI candidate projects were also presented by their developers.

The IGB, whose length and diameter are planned to measure 182 km and 32 inches, respectively, will link Komotini in Greece’s northeast with Stara Zagora in Bulgaria.

Its development schedule has been pushed forward in time on a number of occasions, the latest shift caused by recent elections in Bulgaria.

As a result, a crucial third market test, during which prospective IGB users will need to submit binding offers for capacity reservations, will be rescheduled. Authorities had planned to stage the test in May or early summer.

Temenuzhka Petkova’s return, last week, to the helm of Bulgaria’s energy ministry has been viewed favorably. Regarded as being a staunch supporter of the IGB project, Petkova is expected to move fast in an effort to make up for lost time.

Officials keeping a close watch on the project’s developments believe the IGB will be developed with or without the third market test.

Concurrent progress is also being made on the floating LNG terminal in Alexandroupoli, another prospective gas project in Greece’s north. Gastrade, supporting the project’s development, plans to have completed its FEED (Front-End Engineering and Design) study by late June. Contractors and shipyards are then expected to be commissioned to construct the project’s various segments.

Gastrade is currently also exploring financing options for the project, whose total budget is estimated between 350 million to 370 million euros. Roughly half of this amount is expected to be provided by the company itself. Loans by Greek and foreign banks as well as EU funding will be sought for the remainder.

 

 

 

Last IGB market test, FSRU plan for Alexandroupoli imminent

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The prospective IGB (Greek-Bulgarian Interconnector) project’s third and final market test, entailing the submission of binding bids by gas traders for the allocation of pipeline capacity, appears to be nearing.

The IGB project is directly linked to a plan for the development of a floating LNG termimal in Alexandroupoli, northeastern Greece, as one project would benefit the other.

Bulgaria’s new energy minister Nikolay Pavlov is believed to be maneuvering to make up for lost time as a result of the recent early elections held in Bulgaria. The third-round market test was originally scheduled to take place in March.

In addition, a required FEED (front-end enginnering and design) study concerning the Alexandroupoli LNG terminal is expected to be completed by the summer. This means that Gastrade, the enterprise behind the project, is expected to reach a final investment decision by the end of 2017.

GasLog, a venture headed by shipping magnate Peter Livanos, holds a 20 percent stake in Gastrade. GasLog has transported numerous LNG shipments for US firm Cheniere, interested in exporting gas to Europe via the prospective Alexandroupoli facility.

The Greek city’s floating storage regasification unit (FSRU), supported by the European Commission as an EU project of common interest, which would ensure EU funding, is planned to be developed as a 170,000 cubic-meters facility situated 17.6 kilometers southwest of the Alexandroupoli port.

Returning to the IGB project, a first market test was staged in April, 2016 but was deemed invalid. A second test held last November prompted offers covering 50 percent of the pipeline’s planned capacity, or 1.4 to 1.5 bcm, from DEPA, the Public Gas Corporation, Bulgargaz and Italy’s Edison. All three are involved in the project’s development.

 

 

Technical study for Alexandroupoli LNG unit by this summer

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Technical studies for a floating LNG terminal being planned for Alexandroupoli, northeastern Greece, are expected to be completed by this coming summer.

The prospective project was described as one of pivotal importance for Europe’s energy security and US interests, Robin Dunnigan, Deputy Assistant Secretary for Energy Diplomacy at the US Department of State’s Bureau of Energy Resources, noted yesterday following talks with officials at Gastrade, a Copelouzos corporate group company interested in the LNG unit’s development, as well as Greece’s energy minister Giorgos Stathakis.

The official pointed out that the US’s transformation from natural gas importer to exporter has led to a revision of the country’s outlook on the southeast European region and projects such as the prospective Alexandroupoli facility.

Dunnigan pointed out that annual US LNG exports are expected to exceed 100 billion cubic meters over the next five to seven years, increasing the country’s global market share in the sector to around 20 percent.

This prospect has increased the importance of the Alexandroupoli LNG station for US gas trading companies as the facility is being regarded as a gateway for American shale gas into the Balkans and central Europe.

The US energy official also noted that the US government plans to offer support to American firms planning to invest in Greece’s energy market, a remark interpreted as an indirect reference to Cheniere, which has expressed an interest to export LNG and supply the wider Balkans via the prospective Alexandroupoli facility. To date, Cheniere has already completed sixteen American LNG shipments to Europe.

Work on the FEED (front-end engineering and design) technical study being conducted for the Alexandroupoli floating station began recently. Its expected completion by this coming summer will enable Gastrade to make a final investment decision by the end of 2017.

If all goes well, the Alexandroupoli facility, a floating Storage Regasification Unit (FSRU) with a 170,000 cubic meter capacity planned for a location 17.6 km southwest of the Alexandroupoli port, will begin operating at the end of 2019.

Classified as an EU Project of Common Interest (PCI), the facility is planned to be incorporated with the region’s TAP pipeline and Greek-Bulgarian IGB interconnection.

 

Greece must back US in Europe’s energy battle, ambassador tells

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Greece will need to pursue its energy policies in accordance with American regional priorities and interests or else be viewed as a rival force, the Barack Obama-nominated US ambassador to Greece Geoffrey R. Pyatt noted yesterday at a local industry event, the Athens Energy Forum. The US and Russia are currently maneuvering natural gas supply control in Europe.

Though expressing support for Greece’s aspiration to become a regional energy hub, as indicated by his firm backing for the development of projects such as the TAP and IGB pipelines, as well a floating LNG unit in Alexandroupoli, northeastern Greece, all of which will help boost non-Russian gas supply, including American, to Europe, Pyatt made clear the US’s opposition to the development of the ITGI pipeline, planned to transmit Russian natural gas to Europe via Greece and Italy.

The ITGI project is being discreetly supported by the Greek government, DEPA, the Public Gas Corporation, and Edison, along with Russia’s Gazprom.

Pyatt also reminded, in a less direct fashion, that the US possesses a number of alternatives to get its LNG to European markets. He made reference to a new LNG terminal in Lithuania, one of the gateways available to the US, along with Turkey – as highlighted by a recent LNG delivery to the country by US LNG trader Cheniere – and Poland, receiving strong US support for a major LNG terminal.

Greece will need American support to develop its LNG terminal plan in Alexandroupoli, part of the strategy that would help transform the country into a regional energy hub.

Not surprisingly, the US ambassador devoted a significant part of his speech at yesterday’s Athens conference to explaining why America believes Russia’s natural gas transmission plans for Europe should not be reinforced by third parties.

Pyatt made numerous references to the EU’s intention to end its heavy reliance on Russian natural gas, noting that this represents a golden opportunity for the US to ship in LNG tankers to the continent. Despite the high expectations, the results have been subdued so far.

Gazprom has already made a move to reserve TAP capacity as part of its natural gas transmission plans to Europe. This initiative has been met with cautious optimism, and, in some cases, approval by TAP consortium members. The Russian energy giant’s initiative has, as expected, provoked a negative US reaction.

 

 

 

Vertical Corridor partners set for new agreement to be signed in Athens

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Bulgarian, Romanian and Hungarian gas grid operator representatives are soon expected to travel to Athens to sign a new agreement with their Greek counterpart for the Vertical Corridor, to run though the territories of all these countries.

Two months ago, the four gas grid operators along with ICGB, the consortium behind the prospective IGB (Greek-Bulgarian Interconnector) pipeline project, signed a joint declaration in Budapest to intensify efforts at technical and regulatory levels in order to further propel the Vertical Corridor’s prospects.

A Memorandum of Understanding was also signed by the gas grid operators of Greece, Bulgaria, Romania, Hungary as well as Ukraine. The representative operators – Greece’s DESFA, Bulgaria’s Bulgartransgaz, Romania’s Transgaz, Hungary’s FGSZ and Ukraine’s Uktransgaz – have now decided to take the next step and sign a MoU for the project’s construction.

Romania, whose existing gas network needs to be upgraded if it is to be incorporated into the Vertical Corridor, will use the MoU as support in its quest for related EU funds.

The Vertical Corridor will enable gas flow from the south to the north. Greece’s exisiting LNG terminal in Revythoussa, an islet just off Athens, could supply the Vertical Corridor. The Greek unit’s capacity will be boosted once revamp work there is completed. As a result, southeast European countries will be provided access to LNG.

The Vertical Corridor, to incorporate the IGB interconnector, will provide southeast Europe with access to Caspian gas that will be transmitted to the region through the TAP (Trans Adriatic Pipeline) project, now being developed.

Brussels, backing these projects, is keeping a close watch on developments.

 

Four more firms interested in IGB market test, Petkova says

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Four additional companies have expressed an interest to take part in the prospective IGB (Greek-Bulgarian Interconnector) project’s second-round market test, entailing the submission of binding bids for allocation of pipeline capacity to traders, Bulgarian energy minister Temenuzhka Petkova announced today during a speech at an event organized in Sofia by ICGB, the consortium behind the pipeline project.

Petkova, during her speech, also noted that Bulgaria may seek to acquire a 25 percent stake in a prospective floating LNG station in Alexandroupoli, northeastern Greece.

Greek energy minister Panos Skourletis, who attended the Sofia event, stressed the IGB’s geopolitical and regional significance.

The two officials also held a meeting on the occasion of the Greek minister’s visit to the Bulgarian capital for talks on the IGB project, the Alexandroupoli LNG station, completion of work for installment of reverse flow systems on an existing natural gas pipeline linking Greece and Bulgaria, as well as other energy matters of mutual interest.

Though scheduled for October, the IGB market test’s second round has been delayed and will now most likely take place in November or December.

Both sides appear confident that the second round will produce positive results and give the green light for the pipeline infrastructure project’s development.

 

Energy Minister in Sofia next week for conference, IGB talks

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Energy Minister Panos Skourletis will travel to Sofia next week for an energy conference and take the opportunity to meet with his Bulgarian counterpart Temenuzhka Petkova for a discussion on the prospective IGB Greek-Bulgarian interconnector’s upcoming market test, crucial for the project’s development.

Greek and Bulgarian officials are working frantically to prepare the market test’s second round, entailing binding bids for allocation of pipeline capacity to traders. Though scheduled for October, this second round has been delayed and will now most likely take place in November or December.

Both sides appear confident that the market test’s second round will produce positive results and give the green light for the pipeline infrastructure project’s development.

Speaking at Global Oil and Gas, an energy conference held in Athens yesterday, Dimitris Manolis, Head of International Activities and Projects at DEPA, Greece’s Public Gas Corporation, offered details on the IGB project.

The DEPA official noted that environmental permits for the project have been granted by authorities in both in Greece and Bulgaria, while the project’s entire route has also been endorsed.

A target date for the IGB’s commercial launch has been set for the second half of 2019, Manolis told the Athens conference.

IGB market test to be slightly delayed, activity heightened

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Authorities involved with the IGB Greek-Bulgarian Interconenctor have expressed confidence over the project’s development, noting that the latest developments, both on entrepreunerial and political levels, ensure its actualization.

Much of the optimism has to do with a memorandum of cooperation signed just days ago and overseen by Maros Sefcovic, European Commission vice president responsible for Energy Union.

The gas infrastructure route, planned to run vertically to Ukraine, according to the memorandum, will utilize existing national networks for a pipeline that will have access to both LNG and natural gas transmitted through the TAP (Trans Adriatic Pipeline) project, planned to cut across northern Greece, Albania and the Adriatic Sea to supply Europe from the south.

The memorandum’s signing is expected to provide new impetus to the project’s development.

Meanwhile, one company that had taken part in the IGB’s first-round market test, for non-binding allocation of capacity, has withdrawn and been replaced by another. The market test procedure’s second round of binding bids is now expected to be delayed and not be completed in October, as had been scheduled. Instead, the second round will now most likely take place in November and December.

A considerable portion of the capacity requested through the first-stage market test is based on the prospective development of an LNG terminal in Alexandroupoli.

Considering the latest developments, the IGB project is expected to be endorsed by the European Commission even if its entire capacity is not taken up during the market test’s second round of binding bids, according to authorities linked to the project.

The IGB promises to offer a key alternative energy source in the eastern Balkans, all the way up to Ukraine.