Romania’s Transgaz taking on 15% stake in Volos’ Argo FSRU

Romanian gas grid operator Transgaz has agreed to take on a 15 percent stake in the Mediterranean Gas consortium, promoting the Argo FSRU project at Volos, on the mainland’s east coast, a move that further boosts the LNG terminal’s development prospects as it promises the terminal a gas supply route to Balkan and central European markets.

Mediterranean Gas has lodged an application to Greek authorities for an equity make-up revision facilitating Transgaz’s entry into the consortium with the 15 percent share.

Mediterranean Gas is also holding discussions with other potential partners to further expand its shareholder base, while developments on the matter are expected soon, sources informed.

A recent first-phase market test conducted by Greek gas grid operator DESFA to gauge a capacity increase for the country’s gas grid highlighted Volos’ prospective FSRU as one of the interconnection points of greatest interest for users.

Romania’s natural gas market is one of considerable size as it can absorb up to 13 bcm. Also, the country’s gas network offers interconnectivity with neighboring countries as well as with central European markets, and, as a result, offers potential for transportation of significant gas quantities to the north.

Transgaz operates a gas network totaling 25,000 km, has acquired the Moldovan network, and manages 7 bcm in gas storage facilities.

The Argo FSRU, which will be designed to supply up to 4.6 bcm of natural gas, annually, is planned to begin operating in early 2024.

Alexandroupoli FSRU on track for early-2024 launch

Development of the Alexandroupoli FSRU at the country’s northeastern port is progressing steadily and set for an on-schedule launch by the end of January, 2024, energypress sources have informed.

Tanker conversion work being conducted for the FSRU at Singapore’s Keppel Shipyard was 87.1 percent ready at the end of August, meaning all basic equipment, including burners and gasifiers, has been installed, the sources added.

Representatives of Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, visited the Keppel Shipyard just days ago.  The consortium’s chief executive, Kostis Sifneos, headed the visiting group.

The consortium’s members – the Copelouzos group’s Elmina Copelouzou, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz and Greek gas grid operator DESFA, all holding 20 percent shares – plan to soon hold a meeting to discuss the project’s steps leading to its launch, the sources added.

The FSRU vessel is expected to be ready to set sail for Alexandroupoli in mid-November, before reaching its destination in early December.

The Alexandroupoli FSRU, to offer a 153,500-m3 LNG capacity, will be connected to Greece’s gas network via a 28-km pipeline, through which gasified LNG will be distributed to the domestic market, Bulgaria, Romania, Serbia, North Macedonia, Hungary, Moldova and Ukraine.

The project will serve as a new energy gateway promising to play a key role in the energy security and independence of Greece as well as central and southeast Europe.

LNG facility strikes in Australia raise European concerns

Strike action at three LNG facilities in Australia, a key player in the global LNG market, has raised concerns in Europe as the ongoing dispute between employers and employees could have a significant impact on global gas supply and, by extension, the price of the Dutch TTF futures contracts.

The strike action, taking place at facilities that account for roughly 10 percent of global supply, has destabilized the European natural gas market over the past few weeks.

Europe needs to prepare for the possibility of further instability and price rises as it remains unclear how the ongoing dispute at the LNG facilities in Australia will play out, the Institute for Energy Economics and Financial Analysis (IEEFA) noted in a report.

North West Shelf, an LNG facility run by Woodside Energy, and two Chevron-run facilities, Gordon and Wheatstone, could be affected by the ongoing strike action, IEEFA warned. All three facilities, combined, represent roughly 10 percent of global LNG supply.

Australia, along with Qatar and the USA, represent nearly 60 percent of global LNG supply. Although the majority of Australian LNG exports are destined for Japan, China and South Korea, the disruption caused by the strikes will lead to Asia and Europe competing for LNG.

DESFA sees Revythoussa LNG regasification in 2024 at 3 bcm

Gas grid operator DESFA estimates that an LNG quantity of just over 3 bcm will undergo regasification at its Revythoussa terminal, just off Athens, in 2024 for subsequent delivery to the country’s grid.

The projection, resulting in 35.7 terawatt-hours (TWh) of natural gas, is slightly lower than the 38.08 TWh of natural gas delivered to the grid in 2022, when the level rose sharply year-on-year, by 54 percent.


Just two shipments scheduled for LNG terminal next month

Just two LNG cargoes are scheduled to make their way to gas grid operator DESFA’s Revythoussa terminal, just off Athens, in September, just a fraction of shipments ordered for the islet terminal a year earlier, when the energy crisis had peaked, the operator’s finalized unloading schedule for next month has shown.

The first of the two shipments, a 147,710-m3 order placed by Mytilineos, is scheduled to arrive at the LNG terminal on September 17, while a second LNG order, placed by Elpedison for a 90,000-m3 quantity, is planned to reach the Revythoussa terminal on September 30.

In September, 2022, a total of 10 LNG shipments totaling 514,435 m3 had reached DESFA’s LNG terminal.

DESFA posts significant revenue, profit gains for 2022

Gas grid operator DESFA has posted impressive financial results for 2022, including a 37.6 percent year-on-year revenue increase to 278.3 million euros from 202.6 million euros, as well as a 29 percent rise in profit, to 81.6 million euros from 63.1 million euros a year earlier.

Analyzing its financial results, DESFA’s administration mainly attributed last year’s significant revenue increase, up by over 75 million euros, to higher regulated earnings, which grew by 69.2 million euros.

In her message to shareholders, DESFA’s chief executive officer Maria Rita Galli, made note of the business model followed by the company. “In conditions of great instability and huge volatility, DESFA’s business model has proved resilient, with the company occupying a strong position at the forefront of initiatives launched at national and European level to enhance security of supply in Greece and southeastern Europe,” DESFA’s CEO noted.

“The speed with which DESFA reacted to the interruption of Russian gas flow to Bulgaria, transforming the Greek gas grid into a transit corridor, led to a gas exports increase of approximately 300 percent compared to the previous year, supported by 78 LNG cargoes unloaded at the Revythoussa terminal, whose storage capacity increased by more than 60 percent in record time with the installation, in June 2022, of a floating storage unit,” she continued.

DESFA also announced it is currently looking to separate regulated and non-regulated activities, through the formation of a new company, following a request by RAAEY, the Regulatory Authority for Waste, Energy and Water.

Collective gas orders increase in second purchasing round

A second round of collective European gas purchases, through a platform similar to one established for vaccine orders during the pandemic, has resulted in natural gas orders totaling nearly 12 bcm, well over a quantity ordered during the procedure’s first round in May.

However, the EU initiative fell short of attracting full participation. Second-round orders were delivered to twenty European grid entry points, the majority of quantities at entry points in the Netherlands, France, Italy, Bulgaria and Germany, as well as Ukrainian storage facilities, Sefcovic noted.

“The positive results of this second round illustrate that there is a need and clear added value to join forces, pool our demand and work together to guarantee stable and affordable gas supply to the EU market,” noted the European Commission’s Vice President Maros Sefcovic, who oversees the platform, named AggregateEU.

It was established by the EU following Russia’s invasion of Ukraine to prevent bidding wars between fellow member states and utilize their collective bargaining power potential for competitively priced energy supply as an alternative to Russian natural gas.

Approximately 5.5 bcm, or 45 percent, of the second round’s orders, totaling 11.98 bcm, were made for LNG, well over this energy source’s share of orders in the first round, below 20 percent of the total. Pipeline gas represented all other collective orders made through the platform in the second round.

A third round is expected to be staged in September and is planned to be followed by two further rounds before the end of the year.

Italgas’ Greek EBITDA goal for ’23, €106m, highlights local importance

Italian energy group Italgas’ 2023 EBITDA target of 106 million euros for its Greek portfolio, representing 9 percent of the group’s overall EBITDA objective this year, highlights the strategic importance of the group’s business plan in Greece.

Italgas’ CEO, Paolo Gallo, highlighted this importance during his presentation yesterday of the Italian company’s strategic plan for 2023 to 2029 to investors and analysts in London.

According to Italgas’ seven-year strategic plan, the Greek portfolio’s EBITDA will contract slightly to 8 percent of the group’s overall EBITDA in 2029.

Italgas plans to greatly increase the group’s activities in the Greek market and subsequently boost their value from 700 million euros in 2022 to 1.2 billion euros by 2029, at an annual growth rate of 7.3 percent.

A key objective for the group in the Greek market is to expand natural gas distribution to new areas through the addition of 42 municipalities to the network, either through pipeline distribution or LNG stations.

Italgas has acquired DEPA Infrastructure and its three gas distribution subsidiaries, EDA Attiki, EDA THESS and DEDA.

The Italian group is currently working on a plan to merge its three Greek gas distribution subsidiaries, a development expected to offer significant benefits in terms of efficiency, effectiveness and transfer of know-how. According to Italgas officials, this procedure is expected to be completed by the end of the year.


Natural gas price spike prompts new market alert

News that the Netherlands intends to soon stop production at Groningen, one of Europe’s largest gas fields, as a result of earthquake-related risks, pushed gas prices up by 28 percent yesterday, not surprising, as Groningen is a key gas source for countries in Europe’s west.

The development has made even more urgent the intention of Greece and Spain, along with other EU member states, to reestablish a common front as protection against the outbreak of any new energy crisis.

This group plans to request the continuation of a windfall earnings recovery mechanism in the wholesale electricity market when EU energy ministers meet on Monday to discuss a new structure for the bloc’s energy market.

The Dutch TTF benchmark has risen 113 percent over the past 15 days, from 23 euros per MWh to 49 euros per MWh yesterday, before easing off to 39 euros per MWh.

A temporary disruption of operations at some of Norway’s gas fields has unsettled European markets. Though production at these Norwegian gas fields will soon be normalized, the Netherlands have yet to reach a final decision on the country’s Groningen gas field. However, it is expected to continue producing should a new energy crisis hit Europe or if its upcoming winter is a cold one.

At this stage, ambiguity prevails as it remains unclear if Europe’s natural gas market finds itself at the onset of a new upward trajectory.

A sudden increase in LNG demand in Asia as a result of China’s post-pandemic return to full production is another major concern for European energy market players. Such a development promises to escalate prices.


Spain, Greece want windfall recovery mechanism continued

Greece and Spain, part of a group of EU member states seeking to reestablish a common front against any new energy crisis, intend to call for the continuation of a windfall earnings recovery mechanism in the wholesale electricity market when EU energy ministers meet on June 19 to discuss a new structure for the bloc’s energy market.

The European Commission last year adopted a windfall earnings recovery mechanism that was essentially based on a Greek model before it was applied by member states with some variation.

The Spanish government and the country’s energy minister Teresa Ribera want a recovery mechanism included in the European electricity market’s new structure and activated whenever any price crisis breaks out.

The proposal has already received support from Greece, to be represented at next Tuesday’s meeting by the interim government’s energy minister Pantelis Kapros, and a number of other EU member states.

This group of member states is now working on establishing a united stance on the recovery mechanism ahead of next week’s meeting.

It remains to be seen if the alliance will be strong enough to convince Brussels to include the mechanism in its plan for the new market structure.

Some EU member states remain concerned about the possibility of a new energy crisis despite EU gas storage facilities being 60 percent full and a  continual inflow of LNG at European ports.



Alexandroupoli FSRU pipeline work in progress, tanker to arrive November

Development work for the Alexandroupoli FSRU at the country’s northeastern port is in full progress on all fronts, in preparation for the project’s launch early next year.

Besides the project’s floating LNG storage and regasification infrastructure, work is also in progress on the offshore and onshore pipelines to transmit gas to the national grid and, from there, the Greek-Bulgarian IGB pipeline connection for gas quantities to the Balkans.

Officials at Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, offered an on-site presentation of the FSRU’s work in progress to visiting ambassadors. This mission was organized by George Tsounis, the US ambassador to Greece, and included the ambassadors of Bulgaria, Romania, Moldova and Ukraine.

The FSRU’s subsea pipelines, to measure 24 km, and overland pipelines, measuring a further 4 km, have been delivered to the Alexandroupoli port for installation.

The Alexandroupoli FSRU promises to serve as an additional source of gas supply for Greece and other Balkan countries. Quantities will be transmitted through the IGB for delivery to Bulgaria and, by extension, Romania.

The project’s specially equipped floating tanker is expected to arrive at its Alexandroupoli location in late November, while the FSRU facility should start operating early in 2024.

Gastrade has already been granted a further license for an additional FSRU, intended to serve Moldova and Ukraine, if the results of a related market test indicate that such an additional project would be viable.

It remains unknown when Gastrade could make an investment decision on this additional FSRU.


DESFA, RAAEY apart on tariff agreement as deadline nears

Gas grid operator DESFA and RAAEY, the Regulatory Authority for Waste, Energy and Water, still far apart on the operator’s WACC figure for the next regulatory period covering 2024 to 2027, are engaged in tough negotiations as a June 5 deadline for new tariffs approaches.

DESFA set a WACC figure of 9.14 percent in a proposal put through consultation in mid-March. It has been firmly opposed by RAEEY, believing this figure is unjustifiably high.

DESFA ended 2022 with a WACC figure of 7.44 percent, a starting point for RAEEY in its negotiations. The authority, viewing DESFA’s new WACC figure as pivotal as it will serve as a guide in the levels to be set for other operators, believes the operator’s new level should be a little over last year’s 7.44 percent level, and certainly under 8 percent.

The WACC level to be applied by DESFA over the next regulatory period from 2024 to 2027 is one of four aspects that need to be resolved before gas transmission network usage tariffs are set.

DESFA also needs to finalize its operational expenditure figure for the next regulatory period so that an allowed revenue for the operator may be set. The operator has yet to send this data to RAAEY and, consequently, appears likely to miss the June 5 deadline on this matter.

DESFA’s socialization percentage concerning the operating cost of its Revythoussa LNG terminal just off Athens is another unresolved matter. DESFA has proposed that it be maintained at the current level of 50 percent for the next regulatory period.

However, Gastrade and Motor Oil, both developing new floating LNG terminals in other parts of Greece, have protested, contending this figure is excessive and would offer DESFA’s Revythoussa facility an unfair advantage and undermine the financial viability of their investments. ACER, Europe’s Agency for the Cooperation of Energy Regulators, has backed the two companies on this issue.

DESFA’s ten-year development plan covering 2023 to 2032, a fourth prerequisite needed before its new gas transmission network usage tariffs are set, has already received RAAEY’s approval.


DESFA opts to not extend expiring FSU deal for LNG terminal

Gas grid operator DESFA will not make use of an option to extend its expiring one-year lease agreement for an additional floating storage unit installed at the operator’s LNG terminal on the islet Revythoussa last summer as an energy security measure, the operator’s head official has informed.

“We have already agreed with RAE, the Regulatory Authority for Energy, that it [agreement] will not be renewed and the tanker will be released as it was a temporary solution that served the need to maintain strategic LNG stocks for power generators during the winter period,” Maria Rita Galli, CEO at DESFA, told Greek daily business newspaper Nafteboriki.

The current one-year FSU agreement, worth 20 million euros, expires in June. It ended up being a high-cost solution for DESFA as a result of the mild winter conditions as well as LNG quantity loss resulting from evaporation issues at the upper level of the FSU, a situation that could have been greatly restricted had a decision been reached to connect this unit to the Revythoussa terminal for direct transmission into the grid.

DESFA is believed to be examining the prospect of renting a new tanker for a shorter duration of five months, which would entail far lower cost, energypress sources have informed. If so, DESFA is expected to stage a tender within the upcoming summer for a new LNG tanker lease agreement.

Market officials anticipate the installation of a replacement LNG tanker will probably be needed to cover natural gas storage needs ahead of next winter.

The additional FSU currently in use increased the Revythoussa LNG terminal’s capacity by 70 percent, to approximately 370,000 cubic meters.

Motor Oil reexamining Dioryga Gas FSRU project in Corinth

Energy group Motor Oil is reexamining its plan for the Dioryga Gas FSRU project in Corinth, west of Athens, over concerns created by a change in market conditions, the group’s management revealed yesterday during its presentation of 2022 financial results to analysts.

Petros Tzannetakis, Motor Oil’s deputy managing director, told analysts the group is taking a closer look at details concerning the project.

“We are not saying that we will not go ahead, but that we are still looking at a lot of details,” Tzannetakis noted.

Results of a market test were favorable but market conditions have changed as it has become costlier and more difficult to find LNG carriers, the Motor Oil deputy explained, noting “we still need time before making an investment decision.”

If the project is deemed feasible, the investment will go ahead, Tzannetakis informed.

In its final market test, the Dioryga Gas FSRU project attracted record slot reservation figures for durations of up to 25 years and quantities totaling up to 2 bcm per year.

Located just 22 km from Greece’s existing Revythoussa islet LNG terminal, the Dioryga Gas FSRU would supply electricity producers in Greece as well as markets in southeast Europe.

Last October, RAE, the Regulatory Authority for Energy, approved a capacity increase for the Dioryga Gas FSRU to between 135,00 and 210,000 cubic meters. Motor Oil aims to launch the FSRU in the first quarter of 2024, if the company decides to go ahead with the project’s development.


Short-term measures sought to contain any new energy crisis

Energy minister Kostas Skrekas, who believes that recent European Commission proposals to further counter the energy crisis are on the right track but remain too timid, intends to call for firmer, more immediate action aimed at containing any new crisis at tomorrow’s Energy Council of EU energy ministers.

The energy minister is expected to express support of Brussels’ approach at tomorrow’s Energy Council but also underline major challenges faced by Europe, especially next winter, when, according to many analysts, a sharp rise in energy demand will not be able to be covered by existing LNG supply levels, and, as a result, bring about a new round of sharp price rises.

In a recent report, Goldman Sachs reminded that the structural deficit in European gas balances caused by the interruption of Russian gas supply has not yet been addressed.

Any sharp increase in energy demand during the lead-up to next winter, when Russian gas quantities that filled European energy storage facilities last year will have to be covered by the LNG market, could, according to Goldman Sachs, double current wholesale gas prices back up to levels of at 100 euros per MWh, as supply remains limited.

International projects currently being developed to boost global LNG supply are not expected to emerge and offer results before 2025.

Greek officials are seeking the establishment of a new European fund that could provide state guarantees for CfDs and other possible measures included in the European Commission’s set of proposals, such as hedging.

Athens believes that, without some form of support, prospective benefits of measures proposed by the European Commission will be limited to EU member states possessing fiscal leeway and marginalize the rest.


Overdevelopment danger for LNG terminals in Europe, IEEFA warns

Major LNG terminals being developed in various parts of Europe, including Greece and Germany, in response to reduced Russian gas supply, could fail to achieve full commercial potential as the continent may end up possessing a far greater number of such facilities than required by 2030, the Institute for Energy Economics and Financial Analysis (IEEFA) has warned.

If REPower EU objectives are attained and Turkish gas demand remains steady, then European demand for LNG will be restricted to a level of just 150 billion cubic meters in 2030, down from 175 bcm in 2022, IEEFA pointed out. At such a level in 2030, LNG terminals in Europe would operate at less than 40 percent of capacity.

IEEFA also stressed that European gas operators have an incentive to over-expand their infrastructure and asset base in order to deliver profits to shareholders, even if projects do not end up being fully utilized.

Existing legislation provides operators with guaranteed revenues collected through tariffs, IEEFA pointed out. Evidence strongly suggests the Russian attack on Ukraine has accelerated Europe’s energy transition by dramatically boosting the penetration of green technologies that reduce demand for gas and LNG, the institute added.


Energy ministry multi-bill at parliamentary committee

Greek Parliament’s Standing Committee on Production and Trade begins is set to begin discussions today on a multi-bill covering a wide range of energy-sector issues. The committee’s talks are expected to continue during the week, but a date has yet to be set for the multi-bill’s tabling in Parliament for ratification.

Energy-sector issues included in the multi-bill include a formula for filtering out stagnant RES projects as a means of freeing up required grid capacity.

Non-auction tariff levels in 2023 for small-scale wind and solar energy projects of up to 6 MW is another matter included in the energy ministry’s multi-bill, as are power purchase agreement (PPA) rights for RES projects, instead of fixed tariffs, which were trimmed as part of the new deal.

Also included is an article concerning a compensation amount for gas company DEPA Commercial following the cost of its recent decision to cancel LNG orders, not required as a result of lower energy demand this winter.

It also includes revisions exempting businesses and farmers from public service compensation surcharges, included in electricity bills, worth 63 million euros.

In another section, the multi-bill includes terms increasing upper capacity limits to 100 kW on solar energy panels installed for net-metering purposes by churches, charities, NGOs and schools.

Moreover, the revisions include an EU formula to be adopted for the development of offshore wind farms as a pilot project off Alexandroupoli, northeastern Greece.


Energy transition fund to cover DEPA Commercial for LNG cancellations

DEPA Commercial will be compensated through the energy transition fund for its cancellation of two LNG orders made with TotalEnergies a few months ago as part of the country’s overall effort to bolster energy security ahead of this winter period.

A multi-bill submitted to Parliament yesterday by the energy ministry includes a special revision facilitating this compensation payment to DEPA Commercial, which cancelled two LNG orders submitted to TotalEnergies as a result of a sharp reduction in domestic natural gas consumption.

The legislative revision specifies the compensation payment to DEPA Commercial will be made within a two-month period once all supporting documents have been forwarded by the gas company to DAPEEP, the RES market operator.

The two DEPA Commercial orders were planned for delivery between November, 2022 and March, 2023 as cover in the event of a disruption of Russian gas supply to Greece. But the orders ended up proving excessive given the prevailing conditions.

Shipowner renews interest for power station at Skaramangas

Billionaire shipowner George Prokopiou, the new owner of Hellenic Shipyards at Skaramangas, west of Athens, has rekindled his interest for the development of an LNG-fueled power station at the grounds of the shipyard, Greece’s biggest, energypress sources have informed.

The shipowner held exploratory talks with major Japanese companies active in this domain during his recent visit to Japan, as part of a business delegation accompanying Prime Minister Kyriakos Mitsotakis on his official visit to the country, the sources noted.

Legislation ratified last year on property-usage matters concerning Hellenic Shipyards permits additional uses of the shipyard grounds, including installation of facilities for production, storage and transmission of electricity and natural gas.

Hellenic Shipyards are strategically placed at a coastal front close to the LNG terminal on the islet Revythoussa.

The shipyards’ transfer of ownership to Prokopiou is currently being completed. Local authorities have reacted strongly against the prospect of a power station being developed in the Skaramangas area.

Charge on power producer gas wipes out Gazprom imports

An extraordinary fee of 10 euros per MWh imposed on natural gas-fueled power stations appears to have been instrumental in virtually wiping out, in January, Russian gas imports, which represented just 0.67 TWh of Greece’s 5.9 TWh total in gas imports for the month.

The extraordinary fee prompted a sharp drop in demand last month for natural gas used by electricity producers operating natural gas-fueled facilities. This fall in demand had begun taking shape in December but took on far greater proportions in January.

LNG imports via the LNG terminal on the islet Revythoussa, just off Athens, represented the lion’s share of orders, reaching 3.9 TWh of January’s 5.9 TWh gas imports tally, or 66 percent.

According to data provided by gas grid operator DESFA, overall natural gas demand in Greece fell by 38 percent last month compared to January, 2022. Electricity producers registered a 42 percent drop in demand for natural gas last month, to 2.1 TWh from 3.66 TWh in the same month a year earlier.

Analysts expect new round of gas price increases this year

Analysts are projecting an eventual rise in gas prices over the next few months as a result of the combined effect of several factors, the main one being Europe’s almost entire dependence, these days, on imported LNG.

This LNG dependence, following Europe’s drift away from Russia, along with Europe’s limited LNG gasification infrastructure, until at least 2025, will inevitably lead to price increases at some point in 2023, analysts have noted.

Natural gas prices have been falling in recent times and are expected to, once again, drop below the price level of coal. This price descent, analysts believe, will reignite industrial activity in Europe, boosting gas demand.

Also, Chinese production, currently operating at below full capacity as a result of the country’s strict adherence, until recently, to a zero-Covid policy, is also expected to get back into top gear within 2023.

In addition, if Europe avoids recession, then global gas orders will skyrocket.

Taking these factors into account, Europe needs to maintain links with pipeline gas supply if energy security is to be ensured on the continent, analysts have noted.

This highlights the significance of projects such as the East Med gas pipeline plan, now seeming to be back in favor. It promises to connect Israel, Cyprus and Greece, over a total distance of 2,000 kilometers, before crossing to Italy via the Poseidon pipeline, a 210-kilometer stretch.

Officials fear local infrastructure impact of Turkish-Bulgarian gas deal

A Turkish-Bulgarian gas supply agreement reached last month is troubling Greece’s energy players at institutional and market levels as its impact could affect the role of Greek infrastructure, officials have told energypress.

Local officials are mostly concerned about the deal’s gas supply quantity eventually growing in size rather than the small gas quantities it currently involves, as they only cover a small percentage of Bulgaria’s gas needs.

The majority of Bulgaria’s gas needs are still planned to be covered by LNG shipments coming in through the LNG terminal at Revythoussa, close to Athens, while the prospective Alexandroupoli FSRU in Greece’s northeast will, no doubt, contribute to cover Bulgarian gas demand, once the project is launched.

Turkey and Bulgaria, represented by their respective state energy companies, Botas and Bulgargaz, signed a 13-year gas supply agreement on January 3, according to which Turkey is required to supply Bulgaria an annual gas quantity of 1.5 bcm.

EFET, the European Federation of Energy Traders, wants the Turkish-Bulgarian agreement investigated by the European Commission’s Directorate-General for Energy and Directorate-General for Competition, contending European regulations and the overall institutional framework defining the operation of gas infrastructure within the EU and access to interconnection points have been breached.

DEPA cancels 2 LNG orders submitted to TotalEnergies

A sharp reduction in domestic natural gas consumption has prompted gas utility DEPA to cancel two LNG orders submitted to TotalEnergies a few months ago as part of the country’s overall effort to bolster energy security ahead of this winter period, energypress sources have informed.

The cancellation will not come without repercussions as DEPA, based on the agreement’s terms, will be required to pay TotalEnergies compensation of approximately 10 million euros for each cancelled order. This sum may be covered by the Energy Transition Fund, as foreseen by law.

DEPA’s cancellations concern two LNG orders submitted in September, each for 10 TWh quantities. These orders were secured at particularly competitive prices as other indices besides the TTF were also factored into the pricing formula to lower the price level. At the time, the TTF was as much as 90 euros per MWh higher than other platforms also used for such transactions in the European market.

The two DEPA orders were planned for delivery between November, 2022 and March, 2023 as cover in the event of a disruption of Russian gas supply to Greece. But the orders have ended up proving excessive given the prevailing conditions.

PM: ‘Greece aiming to become energy exporter, energy security provider’

Greece is aspiring to become an energy exporter and energy security provider, Prime Minister Kyriakos Mitsotakis has told members of the national Japanese business organization KEIDANREN during an official visit to Japan, the first by a Greek leader in 17 years.

Mitsotakis, heading a Greek delegation on a visit aiming to attract Japanese investments, told KEIDANREN members Greece has a significant role to play in Europe’s new energy structure now being developed.

This role is based on new infrastructure transforming the country into an energy hub, Greece’s prospective provision of energy security to the wider region, ongoing hydrocarbon exploration efforts, as well as investments for an increased RES-sector share of the country’s energy mix, the Greek leader noted.

“We are investing heavily in regasification facilities, especially in northern Greece. And we aspire to become an energy exporter and an energy security provider, at least for our Balkan neighbors,” the Prime Minister noted. “For the first time, we are actively exploring for potential natural gas deposits southwest of Crete. The exploration is being led by ExxonMobil and the initial findings are very, very promising,” he added.

Greece is one of the world’s ten biggest RES electricity producers, Mitsotakis pointed out while commenting on the significant role the country has to play in the new RES landscape developing in Europe.

Japan possesses the world’s biggest fleet of LNG tankers, in terms of value, according to 2022 data provided by Vessels Value, an internationally recognized data platform for ship valuations.

Japan’s LNG fleet was worth 30.3 billion dollars last year, the world’s highest, followed by Greece, at 29.9 billion dollars and South Korea, at 17.1 billion euros, according to Vessels Value figures.


Gas demand plummets, power stations off, gas importers hit

Natural gas demand has fallen sharply in Greece, firstly as a result of the mild winter weather being experienced, which has restricted household gas demand for heating purposes, and secondly as gas-fueled power stations have remained sidelined for many hours per day because they are not competitive and are being undercut by electricity imports.

Retail gas demand for household, professional, small-scale industrial and industrial usage has fallen by as much as 50 percent, market officials have told energypress.

The reduced level of competitiveness affecting gas-fueled power stations has been primarily attributed to an extraordinary levy of 10 euros per MWh imposed, as of November 1. Also, many businesses have turned to alternatives such as diesel and LNG.

The sharp drop in natural gas usage has especially affected gas importers, some of which are committed to import agreements with take-or-pay clauses, while others have reserved slots at the Revythoussa LNG terminal close to Athens for LNG shipments.

Electricity imports currently cover approximately 25 percent of daily demand, data provided by the Hellenic Energy Exchange for the past week has shown.

Copelouzos: Alexandroupoli FSRU to transport gas to Ukraine

Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal now being developed in Greece’s northeast, will also install an additional FSRU unit at the location, the group’s chief, Dimitris Copelouzos has asserted in comments to media, noting the facility will be capable of transporting natural gas to Ukraine.

According to sources, the Copelouzos group has already held preliminary talks with officials of the embattled country on the prospect of natural gas supply from Greece’s northeast.

A second Alexandroupoli FSRU is expected to be completed in 2025, as an addition to the first terminal at the location, now nearing completion.

The Copelouzos group chief, asked by journalists on the route to be used for transporting natural gas to Ukraine, responded: “Via the pipeline that is now empty,” a reference to the Trans Balkan Pipeline, which transported Russian gas to Greece through the Sidirokastro entry point in the country’s northeast until early 2020.

This route was replaced by Turk Stream in early 2020 so that Ukraine could be bypassed.

The Trans Balkan Pipeline runs from Russia, crossing Ukraine, Moldova and Bulgaria, before branching out to Greece and Turkey.

Investments, including compressor stations in Bulgaria, will be needed to fully utilize the capacity offered by the Trans Balkan Pipeline, sources pointed out.

PPC takeover of ENEL Romania could be just weeks away

Power utility PPC, currently conducting due diligence for its planned acquisition of Italian energy group ENEL’s Romanian subsidiary ENEL Romania, has completed about 70 percent of the procedure, without issues, and could strike a deal within the next two to four weeks.

If the two sides do reach an agreement, PPC will fully acquire the Italian group’s Romanian subsidiary, a big move facilitating the Greek utility’s plan for expansion into the Balkan energy market with Romania, the region’s fastest growing economy, as a base.

An agreement between PPC and ENEL Romania would offer the former full control of ENEL Romania’s assets, regardless of the subsidiary’s varying stakes in network, supply and RES projects, ranging from 51 to 100 percent. ENEL holds the managerial rights to all its ventures in Romania, also included in the sale.

PPC officials have ruled out any chance of also expressing interest in ENEL’s interests in the Greek market. Asset prices in the Greek market greatly exceed those in Balkan markets, they explained.

An ENEL Romania deal would offer PPC three million customers in Romania as an addition to the company’s five million existing customers in Greece.

It would also offer PPC access to rich natural gas deposits in the Black Sea, while a Romanian venture would be supplied favorably-priced LNG arriving at Greek ports – currently via the Revythoussa islet terminal just off Athens and, in the near future, through a prospective FSRU at Alexandroupoli, northeastern Greece.

TTF drop over, gas prices on the rebound, analysts forecast

Natural gas prices, up 20 percent over the past week on levels that had plunged to less than 65 euros per MWh in the last month, are establishing a new upward trajectory, market experts believe.

Colder weather anticipated around Europe over the next few months, a slight drop in gas storage facility reserves around the continent, as well as slightly higher prices offered by Asian buyers, already attracting some LNG shipments to China, now moving again after letting go of its zero-Covid policy, are the key factors seen putting an end to the recent decline in gas prices.

The combined effect of these factors is expected to maintain natural gas prices at levels of between 70 and 80 euros per MWh. Natural gas was priced at 74.80 euros per MWh on the TTF index yesterday, a rise based on expectation rather than any substantial change in current market conditions.

Natural gas storage capacities in Europe have now dropped to an average of 83.5 percent after reaching levels of 95.5 percent of capacity in November.

Though gas prices are currently roughly 40 percent below levels of 120 to 130 euros per MWh recorded this time last year, market volatility is expected to remain a concern in 2023, market analysts told energypress.

Price levels, they have forecast, will soon climb back up to levels of more than 100 euros per MWh before falling again next autumn, when gas storage facilities have been refilled to 90 percent of capacity.

Natural gas prices tumble to 12-month low, crucial period still ahead

European natural gas prices tumbled to 65 euros per MWh yesterday, a new 12-month low last reached in mid-January, 2022, prior to Russia’s invasion of Ukraine.

The price drop has been attributed to mild European winter conditions, so far, that have flattened demand and kept the continent’s energy storage facilities 84 percent full, well above the level recorded a year ago and approximately 30 percent higher than the average level recorded over the past five years.

Analysts insist European market conditions remain fragile, despite the favorable price trajectory of natural gas so far this winter. A sudden change of weather conditions, combined with a complete disruption of Russian gas supply to Europe, could spark a new round of price volatility and deplete European gas reserves by the end of winter, analysts have warned.

The European energy market, experts have long pointed out, will face its toughest test in spring, when EU member states will begin efforts to refill their gas storage facilities in preparation for the winter of 2023-2024.

This refilling period could once again spike natural gas prices to levels of 120 euros per MWh, analysts have noted. Russian pipeline gas supply is expected to be considerably lower in spring, while the LNG market, on which Europe now greatly depends, is expected to be tight in spring.

A worst-case scenario for Europe would combine a complete disruption of Russian natural gas supply with an increase of LNG demand in the Chinese market. Such a combination would prompt a natural gas shortage estimated to reach as much as 57 billion cubic meters, or 15 percent of projected demand.

PPC ‘transforming rapidly, entering natural gas, LNG market’

Power utility PPC’s participation at the 22nd World LNG Summit indicates the energy group is transforming rapidly, on many levels, one of these being its involvement in natural gas and LNG markets, Konstantinos Nazos, PPC’s General Director of Energy Management, has pointed out in comments to energypress.

“It is a very interesting conference and I think the fact that it is being held in Athens highlights the role that our country has to play in the future in terms of LNG and, more generally, electricity supply security in the wider region,” Nazos noted.

Energy security, in relation to sustainability and cost-effectiveness of solutions, is the most challenging matter that needs to be resolved, the PPC official determined, having heard summit speeches and held meetings during this event.

“We are still close to the crisis. We have successfully dealt with many risks without having left it behind. We have managed to turn those risks into opportunities and we are looking for more,” Nazos commented.