Alexandroupoli FSRU project headed for PCI list reentry

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

 

RAE, Bulgarian counterpart approve IGB market test bidding terms

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

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

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

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

 

Iran displaying two-pronged interest in the Greek market

Iran, active on the global energy circuit after being sidelined for years as a result of western-imposed sanctions, is expressing an interest to participate in the development of a prospective floating LNG station in Alexandroupoli, northeastern Greece, through NIGC, the National Iranian Gas Company, while a proposal has already been extended by NIOC, the National Iranian Oil Company, to ELPE (Hellenic Petroleum) for joint development of a new refinery in Greece.

Now ready to start supplying LNG, Iran is seeking distribution channels and customers. Last month, following a meeting between Iran’s oil minister Bijan Namdar Zangeneh and Bulgarian energy minister Temenuzhka Petkova, Bulgarian media reported that Zangeneh expressed an interest to start supplying Iranian LNG to Greece and Bulgaria once the IGB (Interconnector Greece Bulgaria) project is completed.  The Iranian minister also stressed Iran’s interest to help develop the Alexandroupoli LNG station.

Iran is considering taking its interest in the Alexandroupoli LNG station a step further by examining the prospect of acquiring a stake in the venture, energypress has been informed. NIGC’s registration for an oil and gas conference in Athens on September 28 is indicative of this interest. The event will provide Iranian officials with the opportunity to hold crucial talks at political and entrepreneurial levels.

As for the oil sector, Iran’s interest in acquiring a stake in ELPE, a move supported by the country’s oil ministry, emerged at the beginning of this year through statements conveyed by Iranian state-run news agencies.  The prospect has been linked to settlement of ELPE debt owed to NIOC. ELPE officials have not taken the proposal any further despite a reference on the matter by Greece’s minister for foreign affairs Nikos Kotzias during a visit to Tehran.

Iranian officials have made clear their interest for the joint development of a new refinery in Greece, which would primarily serve Iranian export needs. This proposal has been looked into by Greek officials. Two options are being examined, one for the expansion of an existing facility in Thessaloniki, the other the construction of a new unit in Thrace, Greece’s northeast. This Iranian proposal has not been linked to ELPE’s debt owed to NIOC.

Iranian state companies are expecting to receive billions of euros in payments from various countries as a result of lingering banking restrictions in Iran, despite the lifting of sanctions early this year. Iran plans to invest some of this money into production units facilitating the country’s oil and gas exports. Besides Greece, development of units in Bulgaria is also being examined.

IGB developments in October, Romania extension prospects favorable

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

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

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

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

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

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

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

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

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

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

 

 

Pivotal IGB project one step closer towards actualization

This week’s approval by RAE, the Regulatory Authority for Energy, of guidelines set for the IGB (Interconnector Greece-Bulgaria) project’s second-round market test, entailing the submission of binding offers by interested parties for pipeline capacity, brings the project one step closer to its actualization.

The project’s development is scheduled to begin within the second half of this year, while its launch is planned for early in the second half of 2018, assuming no more delays hamper the process, as has been the case in the past on the Bulgarian side.

The IGB will feature a 182-kilometer pipeline, 31 kilometers of which will cross Greek territory, running from Komotini, northeastern Greece, to Stara Zagora in Bulgaria, as well as supportive facilities such as metric stations and an operation center.

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

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

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

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

A final investment decision on the IGB’s development will be made once binding offers are submitted, as this stage will determine the project’s sustainability.

The IGB represents the first segment of the “Vertical Corridor” to initially connect the Greek, Bulgarian and Romanian natural gas grids. At a latter stage, this stretch may be extended to reach central European grids, such as Austria’s. The IGB will also facilitate a prospective floating LNG station in Alexandroupoli, northeast Greece.

The prospective gas hub in Alexandroupoli also stands to provide favorable conditions for the utilization of a depleted gas deposit in the Gulf of Kavala as an underground natural gas storage facility.

 

 

Authority approves IGB second-round market test guidelines

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

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

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

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

 

Energy cooperation a key part of Greek-Bulgarian declaration

Greece and Bulgaria have signed a joint declaration to continue and deepen their bilateral cooperation on many fronts, including energy, at a meeting led by the heads of state of the two countries in Sofia on Monday.

Both sides agreed that substantial progress has been achieved in the energy sector, a collective effort to develop the Greek-Bulgarian IGB natural gas interconnection being a key factor.

Greek and Bulgarian officials pledged to intensify the effort to construct the IGB project, running vertically with potential for wider source links in the Balkan region, including LNG stations and storage facilities.

The two sides also reiterated a commitment to accelerate the development of a second electricity interconnection project between Greece and Bulgaria and highlighted a common interest to promote sustainable energy sources at competitive prices, based on an EU strategy for the energy sector through the development of Projects of Common Interest (PCIs), intended to improve EU energy efficiency, security and source diversification.

“Energy cooperation has emerged as a key domain in our ties, through the promotion of new regional routes and pipelines of global significance,” remarked Greece’s Prime Minister Alexis Tsipras. He stressed that construction of the IGB, as part of the region’s vertical route, ranks as a top-priority project that promises to bolster the positions of both Greece and Bulgaria on the regional energy map, offering multiple benefits.

Tsipras noted that Greece is continuing its work to upgrade the energy role of the Alexandroupoli port in Greece’s northeast through a plan to develop an LNG station.

The Greek prime minister added that he and his Bulgarian counterpart, Boyko Borissov, agreed on the need to utilize the energy sources of their respective nations as a means of establishing peace and cooperation, not division.

Tsipras said the joint declaration for energy cooperation confirms the importance placed by both sides on the sector.

In his comments, Borissov referred to the Alexandroupoli LNG station’s construction, noting that, in unison, the two countries can achieve plenty. “We can support Greece in the development of its capacity and achieve security for both countries, in other words, ensure that they won’t sidestep us.”

Skourletis, Hochstein talk pipelines, LNG terminal and DESFA

Environment and Energy Minister Panos Skourletis and Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs, have held a new meeting to discuss a range of key mutual energy-sector interests.

Emphasis was placed on the progress of the TAP (Trans Adriatic Pipeline) natural gas project, the prospects of the IGB, the Greek-Bulgarian interconnector, as well as a plan for the development of a floating LNG station in Alexandroupoli, strategically located in northeastern Greece to serve the wider Balkan area.

The two officials also exchanged views on the South Corridor, to incorporate the TAP project, running through northern Greece and Albania to Italy.

Skourletis reportedly spoke extensively on the government’s plan to transform Greece into an energy hub that may serve the wider region. Besides the trading and economic dimensions, this objective has the potential to bolster traditional ties and establish new ones, he noted.

The two officials, who were accompanied by associates, also discussed the long-running and unfinished sale of DESFA, Greece’s natural gas grid operator.

Azeri energy company Socar had agreed to purchase a 66 percent stake of DESFA after winning an international tender in 2013, but, more recently, the European Commission intervened to demand that a 17 percent share be offered to a certified European operator, which would reduce the Azeri firm’s control to 49 percent.

 

German deputy chancellor to visit following Putin, Valls

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

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

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

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

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

 

Road map for Alexandroupoli LNG station sets 2018 target

The development prospects of the LNG floating station in Alexandroupoli, northeastern Greece, gained further ground yesterday as a result of firm support offered by Bulgarian energy minister Temenuzhka Petkova, who noted that her country is interested, as well as officials at Cheniere, the US firm primarily active in LNG-related businesses, who clearly backed the project under the condition that LNG buyers have been previously secured.

The supportive comments were made on the eve of today’s ceremony in Thessaloniki to launch construction work for the Greek segment of TAP (Trans Adriatic Pipeline).

At a meeting held yesterday, Greek energy minister Panos Skourletis, joined by Petkova, Cheniere representation, as well as officials from DEPA, Greece’s Public Gas Corporation, Bulgarian Energy Holding, and Gastrade, a Copelouzos corporate group company, all reiterated their willingness to press ahead with the LNG floating station in Alexandroupoli, and agreed on a road map, according to energypress sources.

Its schedule sets the current year’s final quarter as a deadline for an investment decision, the objective being to have constructed the floating station by the end of 2018.

Highlighting Bulgaria’s interest in the project, a 14-member delegation took part in yesterday’s meeting. Cheniere was represented by three officials.

Though all parties linked to the Alexandroupoli LNG station’s development have clearly expressed their interest, further time is needed to synchronize this project with the Greek-Bulgarian pipeline, the IGB interconnector, as the two projects are interdependent.

The IGB pipeline would not be feasible without a floating LNG station, while the Alexandroupoli LNG project would be meaningless without the IGB. Not surprisingly, Gastrade, which is promoting the investment plan for the Alexandroupoli station, forwarded the biggest IGB capacity offer during a non-binding, first-round market test. Gastrade submitted an offer for two billion cubic meters, annually, of five billion cubic meters available. This level of interest will need to be confirmed in the market test’s upcoming second round, when traders must submit binding offers. A minimum of 1.7 billion cubic meters will need to be submitted to make the IGB project feasible.

Skourletis yesterday announced that the deadline will be shifted from the summer to September. During this additional time, certain LNG station procedures will be completed. The slight change of schedule is intended to keep the progress of the two projects synchronized.

If Cheniere, DEPA, Bulgarian Energy Holding and Gastrade reach a final agreement to develop the LNG floating station, then Gastrade will submit a binding order to reserve IGB capacity.

“Greek and Bulgarian government support is certain and, subsequently, everything indicates that the IGB project will be developed,” Skourletis remarked yesterday.

The IGB pipeline project’s budget is estimated at 220 million euros. The Bulgarian government has already offered state guarantees covering half the amount. The European Investment Bank is expected to contribute to the project’s financing. The IGB’s Bulgarian segment is planned to cover 151 kilometers, while the Greek section will run for 31 kilometers. A tender could be announced before the end of this year if a final development decision is reached by autumn.

Geopolitical activity heightens for TAP work launch ceremony

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

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

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

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

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

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

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

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

 

Petkova to visit for LNG talks during TAP construction launch

As part of the government’s overall effort to push ahead with major natural gas infrastructure projects, Greek energy minister Panos Skourletis, his Bulgarian counterpart Temenuzhka Petkova, and investors linked to the prospective floating LNG station in Alexandroupoli, northeastern Greece, are scheduled to meet next week, on May 17, when a ceremony will be held in Thessaloniki to launch construction work for the TAP (Trans Adriatic Pipeline) project’s local segment.

US energy company Cheniere, primarily active in LNG-related businesses, DEPA, the Public Gas Corporation, Bulgargaz, and Gastrade, a member of the Copelouzos corporate group, will be represented by head officials or key representatives at the meeting, to focus on the Alexandroupoli LNG station.

Its fate is directly related to that of the Greek-Bulgarian interconnector (IGB), and vice versa, which is why the Greek energy ministry is seeking to coordinate development of the two projects.

It has become perfectly clear that the IGB interconnector cannot be developed unless its capacity is sufficiently covered when the second stage of a market test is held. Interested parties will need to submit binding offers. Developing the LNG station in Alexandroupoli without an IGB plan would not make any sense.

At present, the prospects for the IGB’s development appear to be positive. Just days ago, ICGB, a 50-50 joint venture – involving Poseidon (DEPA and Edison) and Bulgarian state-run company BEH – that has taken on the IGB project, informed that nine non-binding bids for 5 billion cubic meters were made during the market test’s first round. Not surprisingly, Copelouzos group member Gastrade, behind the investment plan for the Alexandroupoli LNG station, placed the biggest non-binding bid for IGB use, this being 2 billion cubic meters, annually, of 5 billion in total. It is estimated that a minimum usage level of 1.7 billion cubic meters is needed to make the IGB project sustainable.

If Cheniere, DEPA, Bulgargaz, and Gastrade agree to develop the Alexandroupoli LNG station, then the Copelouzos group can be expected to follow up with a binding offer for IGB capacity.

Should progress be made at next week’s meeting for the LNG station, the IGB’s prospects will be propelled, and, subsequently, many of the non-binding bids will be cemented as binding bids in the market test’s second stage.

The IGB project is being heavily supported by the EU and USA, which is keen to supply the wider Balkan region with American LNG. Until now, Russian supply has been dominant in the region.

 

Energy issues not a top priority for Putin visit to Athens

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

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

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

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

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

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

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

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

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

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

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

 

Bulgarian energy minister in Athens soon for LNG station talks

Bulgarian energy minister Temenuzhka Petkova will soon make an official visit to Athens to take part in a meeting to focus on the plan to develop a floating LNG station in Alexandroupoli, northeastern Greece, following an invitation extended by her Greek counterpart Panos Skourletis. A date for her visit has yet to be announced.

Skourletis and Petkova discussed energy matters of mutual interest for Greece and Bulgaria during a telephone conversation yesterday. The discussion also covered the results of a first-round feasibility market test conducted for the prospective Greek-Bulgarian IGB interconnector. Interested parties were invited to indicate natural gas capacities they would require. The two officials agreed that the procedure’s next stage, when binding offers will be made, will be crucial in determining the interconnector project’s feasibility.

Petkova, during yesterday’s discussion, confirmed the Bulgarian government’s interest in the development of the floating LNG station in Alexandroupoli, which promises to further validate the IGB interconnector.

Concern expressed about IGB market test results

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

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

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

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

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

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

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

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

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

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

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

 

 

Energy union head reiterates EU support for TAP, IGB in talks with PM

Talks between Prime Minister Alexis Tsipras and Maros Sefcovic, the European Commission vice president responsible for Energy Union, at a meeting in Athens yesterday, primarily focused on Greece’s prospective role as a key energy hub and gateway for new gas entering Europe from the Caspian region, the visiting official told reporters afterwards.

Sefcovic, who is touring European capitals to check on the energy union progress of EU member states, reiterated the European Commission’s full support for the development of both the TAP and Greek-Bulgarian IGB natural gas pipeline projects.

Tsipras told the visiting official that Greece is playing a crucial role in the regional energy sector’s future as a result of the country’s geographical position, while also making note of the effort being made by Athens to utilize opportunities such as that of the prospective TAP natural gas pipeline.

Construction work on the Greek segment of this infrastructure project, to bring new gas to Europe via Greece’s north, Albania and Italy, is scheduled to officially commence in May. A ceremony is planned to take place in Thessaloniki to mark the start.

In an exclusive comment to the Athens News Agency, the European Commission’s vice president said Greece is making satisfactory progress on energy efficiency objectives set as part of the EU’s wider drive towards energy union.

The visiting official said he offered encouragement to Athens to continue pursuing reforms in the energy sector, while adding that he will contribute to an effort for Greece to utilize EU structural funds for investments in energy efficiency projects.

The Commission’s vice president noted that he and Greek partners are looking for ways to boost Greece’s level of innovation, growth, and competitiveness, which, he added, would offer benefits to the Greek economy, citizens and the integrated European energy market.

 

EU pushing IGB plan regardless of market test result

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

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

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

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

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

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

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

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