ELPE negotiating reopening of North Macedonia oil pipeline

Hellenic Petroleum ELPE, Greek government and North Macedonian officials have begun talks aiming for the reopening of an oil pipeline linking ELPE’s Thessaloniki refinery with the company’s Okta refinery in the neighboring country through an extrajudicial settlement by the end of the year.

The issue was discussed at a meeting in Thessaloniki yesterday, held on the sidelines of a visit by US Secretary of State Mike Pompeo.

At the meeting, the ELPE and North Macedonian government officials appeared keen on achieving an out-of-court settlement, sources informed.

The Greek petroleum group is seeking compensation of 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

ELPE has already won an older case, on the same issue, at the International Court of Arbitration in Paris for compensation worth 52 million dollars. This verdict was delivered in 2007, three years after the case was filed.

The Greek and North Macedonian sides, encouraged by the US, agreed to form a committee to work, until mid-October, on a solution that could enable the oil pipeline to reopen following a seven-year interruption, sources informed.

The officials have set a deadline to reopen the pipeline by the end of the year, sources added.

ELPE has completed all technical work needed for the oil pipeline’s relaunch, sources said. The pipeline’s use in place of oil tankers would offer drastic transportation cost cuts.

The ELPE officials updated North Macedonia’s government officials on the company’s investment plan for the neighboring country, sources said. It is believed to include RES investments and a conversion of ELPE’s Okta facilities into a petroleum products hub that would serve the western Balkans.

ELPE is already present in Serbia and Montenegro and is now targeting the markets of Albania and Kosovo for supply of ready-to-use petroleum products.

The oil pipeline stopped operating in 2013 after ELPE deemed its Okta refining activities were no longer feasible. The 213-km pipeline has a 350,000-metric ton capacity.

Until 2013, the pipeline was used to transfer crude oil from ELPE’s Thessaloniki refinery to the Okta unit in Skopje.

Greek energy minister Costis Hatzidakis chaired yesterday’s meeting, which involved the participation of secretary-general Alexandra Sdoukou; deputy minister for economic diplomacy Kostas Fragogiannis; ELPE president Giannis Papathanasiou; ELPE chief executive Andreas Siamisiis; North Macedonian government deputies Liupko Nikolovski and Fatmit Bitikji; the country’s economy minister Kreshnik Bekteshi; US Assistant Secretary of State for Energy Resources Francis Fannon; and the US Ambassador to North Macedonia Kate Marie Byrnes.

Greek, North Macedonian operators working on gas, power links

Greek gas grid operator DESFA and its state-controlled North Macedonian counterpart MER plan to upgrade a memorandum of cooperation signed in 2016 for the construction of a 120-kilometer gas pipeline from Thessaloniki’s Nea Mesimvria area to the northern neighbor.

Heading a Greek delegation, Prime Minister Alexis Tsipras and his North Macedonian peer Zoran Zaev have agreed to sign a series of bilateral agreements and memorandums of cooperation in Skopje today.

The project, to interconnect the Greek and North Macedonian gas transmission systems, is regarded as one of the most significant energy investments being prepared by the two countries.

It is planned to offer an annual transmission capacity of about 3 billion cubic meters and also enable an interconnection with the TAP route – to supply Azerbaijan gas to European markets via Greece – for a diversification of sources.

The DESFA-MER association promises to be further enhanced by the North Macedonian operator’s moves for gas system interconnections with Kosovo and Montenegro.

Subsequently, the Greek-North Macedonian natural gas pipeline, once constructed, promises to offer a new supply route to Balkan markets.

DESFA is preparing to stage a market test for the Greek-North Macedonian pipeline during the second half of this year, sources have informed.

Meanwhile, Greece’s power grid operator IPTO and its North Macedonian counterpart MEPSO are discussing preliminary studies intended to lead to an upgrade of electricity interconnections between the two countries.