IGB

RAE, Bulgarian counterpart approve IGB market test bidding terms

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

DEPA not yet ready to decide on LNG station involvement

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The prospective IGB (Interconnector Greece Bulgaria) pipeline and floating LNG station in Alexandroupoli, northeastern Greece, are directly linked projects, Theodoros Kitsakos, the recently appointed chief executive officer at DEPA, Public Gas Corporation, has pointed out.

DEPA is keeping a close watch on the Alexandroupoli LNG project but is not yet ready to make a decision on its possible involvement, Kitsakos informed. The LNG station will be developed by the Copelouzos Group, which is engaged in talks with DEPA about the latter’s participation.

A successful market test for the IGB plan and the project’s development will greatly determine the commercial potential of the Alexandroupoli LNG station, as well as DEPA’s role, Kitsakos explained.

Kitsakos remained particularly reserved about DEPA’s involvement in major international projects but stressed the corporation remains interested and active.

“We’ve seen and heard many things over the past few years. I would say I’m holding a medium-sized basket, neither big nor small,” he remarked.

A finalized investment plan signed last month for the IGB project comes as a major first step for the project’s development, but much will depend on the results of a second market test. It needs to be completed by February 29. A first market test had indicated that a one billion cubic meter amount would remain unsold.

Kitsakos indicated that DEPA and its partners at Poseidon – a joint venture formed by DEPA and Italy’s Edison to construct and operate the IGB pipeline’s Greek side – are not only ready to conduct the required work on the project within Greece but also willing to participate in its development on the Bulgarian side.

The IGB project has been classified as a Project of Common Interest (PCI) by the European Union and, as a result, has secured roughly 45 million euros of EU funding, representing one quarter of the project’s total cost.

 

Bulgaria mulls doubling IGB capacity ahead of market test

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

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

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

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

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

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

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

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

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

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

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

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

Cheniere officials in Athens for IGB, LNG project meetings

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A team of highly-ranked executives of US energy company Cheniere, primarily active in LNG-related businesses, is in Athens for a series of talks with officials at the energy ministry, the Copelouzos corporate group, and DEPA, the Public Gas Corporation, seeking gas supply deals for the Greek market, as well as Bulgaria, through the prospective Greek-Bulgarian IGB interconnector.

Cheniere is believed to have received offers for a role in the local gas market and inclusion in a consortium to construct a floating LNG terminal in Alexandroupoli, northeastern Greece, a project undertaken by Gastrade, a member of the Copelouzos corporate group. Both Gastrade and DEPA have approached Cheniere for its participation in this project’s development, according to sources.

Cheniere has yet to respond to the Alexandroupooli project request but the arrival of company officials in Athens for today’s meetings signifies that a definite interest exists. No details concerning any prospective partnerships are known at this stage.

The American company is also expected to examine the prospect of utilizing the IGB pipeline if an appropriate gas demand level is determined in the Bulgarian market. A finalized investment plan for the IGB project was signed between Greek and Bulgarian officials in Sofia last week.

Interestingly, Cheniere yesterday replaced its chief executive and co-founder, Charif Souki. The change comes at a time when the US company is preparing to export LNG beyond the US market for the first time.

According to a Bloomberg report, the change was prompted by activist investor Carl Icahn’s increased stake in Cheniere over the past four months, which has provided him with two seats on the company board.

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

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

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

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

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

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

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

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

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

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

Kerry expresses US support for TAP, IGB pipeline projects

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

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

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

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

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

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

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

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

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

 

IGB shareholders reach agreement on pipeline, DEPA boss announces

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The partners behind the prospective IGB pipeline project, to interconnect the Greek and Bulgarian gas networks, reached an agreement Tuesday on their respective commitments, Spyros Paleogiannis, CEO at DEPA, the Public Gas Corporation, noted during a speech yesterday at a conference staged by IENE, the Institute of Energy for South-East Europe.

The head official at DEPA, to develop the IGB project in association with Bulgaria’s BEH and Italy’s Edison, noted this week’s agreement will be endorsed by the consortium’s board tomorrow, ahead of a finalized investment plan to be set by the end of this month.

An announcement on the project by its partners had been postponed twice this year for a variety of reasons, including Greece’s two national election battles.

The IGB pipeline, measuring 170 kilometers in length and budgeted at approximately 250 million euros, will interconnect the Greek and Bulgarian gas networks from Komotini, northeast Greece, and Stara Zagora, in Bulgaria’s south. Its initial capacity will measure 3 billion cubic meters per year, with potential for an increase to 5 billion euros.

The project is being backed by the EU, to provide 40 million euros in financial support for the pipeline, which will further contribute to Europe’s energy integration, as well as the US, believed to be planning for LNG supply to southeast Europe through terminals in Greece and Croatia.

The IGB project has been granted environmental permits by both Greek and Bulgarian authorities, but has yet to receive an EU license to operate as an Independent System Operator (ISO).

An initial market test conducted a few months ago showed limited commercial interest in terms of capacity reservation, which was limited to one billion cubic meters per year, a third of the prospective pipeline’s total initial capacity. A month ago, investors announced that a second test will be conducted.