PM discusses Greek regional gas supply prospects in talks with US president

The crucial role to be played by northeastern Greece’s prospective Alexandroupoli FSRU as a project that promises to help reduce and eliminate the reliance of the Balkans and, by extension, east Europe on Russian gas was stressed during talks between Greek Prime Minister Kyriakos Mitsotakis and US president Joe Biden in Washington yesterday.

The Greek leader, who stressed that the Alexandroupoli FSRU will be installed at a port just 500 km from the Ukraine border, added the facility, discussed extensively between the two leaders, will play a pivotal role in Europe’s decision to end its reliance on Russian gas.

Mitsotakis also discussed Greece’s ambitious yet not unattainable objective of becoming an energy hub in the Balkans, as a first step, as well as a key player in eastern Europe.

Three prospective LNG terminals – Alexandroupoli FSRU I and II, as well as Dioryga Gas, close to Korinthos, west of Athens – combined with the existing LNG terminal on the islet Revythoussa, just off Athens, that will soon acquire a fourth storage unit, could elevate Greece’s regional role as a main gas supplier in the Balkans and eastern Europe.

 

 

 

LNG order costs fall as much as 40% below TTF prices

The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.

 

RAE decides on 12-month FSU rental for Revythoussa, 70% capacity boost

RAE, the Regulatory Authority for Energy, has decided on a 12-month rental solution for an FSU installation at the country’s LNG terminal on the islet Revythoussa, just off Athens, a move planned to increase the facility’s capacity by 70 percent at an overall cost estimated at 20 million euros, energypress sources have informed.

The FSU, to serve as an addition to three existing storage units at the Revythoussa LNG terminal, is planned for July, the sources added.

RAE’s finalized decision enables gas grid operator DESFA, operating the LNG terminal, to stage a second round of binding bids for reservation of capacities. The procedure is expected to take place imminently, by mid-May. Four companies participated in the non-binding first round.

The FSU to be moored will offer a capacity of between 150,000 and 174,000 bcm, increasing the terminal’s current capacity of 225,000 m3 to at least 375,000 m3.

 

 

Alexandroupoli FSRU development launch today, pivotal project

Development of the Alexandroupoli FSRU in Greece’s northeast, a project promising to boost energy security by broadening energy source diversification for Greece and the wider Balkan region, is scheduled to officially commence today.

The prime ministers of Greece and Bulgaria, as well as Serbia’s president, will attend today’s official ceremony. The leaders will highlight the need for energy source diversification in the Balkans and reduced reliance on Russian natural gas.

The Alexandroupoli FSRU promises to establish Greece as a gas hub for transportation of LNG into the EU.

Natural gas consumption in southeast Europe totals between 10 and 11 bcm annually, half this amount provided by Russia.

The Alexandroupoli FSRU, expected to be ready to operate by the end of 2023, is planned to offer a capacity of approximately 5.5 bcm, greatly diversifying gas supply to southeast Europe.

The project is budgeted at 380 million euros, of which 166.7 million euros will be provided through the National Strategic Reference Framework (NSRF).

The Alexandroupoli FSRU will be linked with Greece’s gas grid via a 28-km pipeline, enabling gas supply to Greece, Bulgaria and the wider region, including Romania, Serbia, North Macedonia, Moldavia and Ukraine.

 

REPower EU plan overambitious, ‘an objective, not a specific strategy’

The European Commission’s REPower EU transition plan, aiming to greatly reduce Europe’s reliance on Russian gas, is overambitious and should be regarded as an objective rather than a set of specific measures, officials taking part in the recent annual Gas Infrastructure Europe conference, an authoritative sector event, have concluded.

The calculations offered by the REPower EU plan are incorrect, Torben Brabo, GIE’s president, has told the Euractive agency, adding that a closer look at the figures concerning Russian natural gas supply, LNG supply, as well as biomethane projections, renders the European plan as overambitious.

LNG availability and purchase projections in the REPower EU plan are possibly too high, the GIE president stressed.

Officials linked with LNG infrastructure told the GIE conference that the LNG market’s actual conditions will prevent the EU plan’s lofty targets from being achieved. Anything beyond 50 percent of the target set will be difficult to attain, these officials contended.

American current gas liquefaction capacity does not suffice for supply of an additional 15 bcm of LNG to Europe, as specified in the EU plan, officials taking part in the GIE conference contended.

Qatar and other LNG exporters in the Middle East have already committed amounts to non-EU buyers, while the REPower EU plan’s 35-bcm biomethane objective appears to be too optimistic, they added.

 

 

 

 

Four Revythoussa FSU offers made, 6-month lease for start

Four companies have expressed non-binding interest in a procedure seeking FSU offers, both through lease and sale arrangements, for gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens.

The Revythoussa plan entails adding an FSU with a capacity of between 150,000 and 174,000 m3 to the LNG terminal, which would increase the facility’s current 225,000 m3 capacity, provided by three existing onshore storage units, to at least 375,000 m3, an increase of approximately 70 percent.

Local authorities were satisfied with the level of interest expressed by participants in the first-round procedure, staged to gauge the market for FSU availability. The procedure was staged with guidance from international broker SSY Gas.

A six-month lease solution for an FSU is now considered certain as an initial plan as RAE, the Regulatory Authority for Energy, keeps assessing market data to decide whether an FSU lease or purchase solution is best for Revythoussa over the longer term.

A follow-up tender inviting interested parties to submit binding bids will be staged as soon as RAE has reached its decision.

According to the plan’s schedule, a follow-up tender is planned for the first half of May. Officials aim to have an FSU moored at Revythoussa by the end of July.

 

Alexandroupoli FSRU project development launch on May 3

Development of the Alexandroupoli FSRU, in Greece’s northeast, a project promising to boost energy security and widen energy source diversification in Greece and the wider Balkan region, is scheduled to officially commence on May 3.

The Alexandroupoli FSRU, to be developed and operated by Gastrade, a project-specific consortium established by the Copelouzos group, has become particularly crucial given the energy market challenges faced by the EU following Russia’s invasion of Ukraine and the ongoing war.

The Alexandroupoli FSRU promises to initially offer a new gas transmission corridor to Greece and Bulgaria, and, at a latter stage, to Romania and North Macedonia, helping all these countries reduce their reliance on Russian natural gas.

Completion of the project’s second stage, expected in 2024, promises to double the unit’s capacity and enable natural gas transportation as far as Ukraine.

The Gastrade consortium is comprised of five partners, founding member Elmina Copelouzos of the Copelouzos group, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz, and DESFA, Greece’s gas grid operator, each holding 20 percent stakes.

All five partners have agreed to offer 2 percent each so that North Macedonia can enter the consortium with a 10 percent stake.

Prime Minister Kyriakos Mitsotakis and his Bulgarian counterpart Kiril Petkov will attend next week’s ceremony marking the start of work on the project.

PM calls emergency meeting after Russia gas cut to Bulgaria

Prime Minister Kyriakos Mitsotakis will hold an emergency meeting this afternoon at the government headquarters with the energy ministry leadership’s participation following Russia’s decision yesterday to disrupt gas supply to Bulgaria, following a disruption to Poland.

The Greek leader had a telephone discussion with his Bulgarian counterpart Kiril Petkov this morning, pledging Greek energy-supply support, within the framework of EU solidarity, following Russia’s decision to disrupt supply to the neighboring Balkan country.

This support will most likely stem from Greece’s LNG terminal at Revythoussa, the islet just off Athens, through a partial reservation of this facility’s capacity for Bulgaria’s needs.

Consumption in Bulgarian at this time of the year is low, meaning supply through the Revythoussa unit should help cover the neighboring country’s needs, at least temporarily.

Bulgarian-based MET Energy has already ordered a 142,500 m3 LNG shipment through the Revythoussa terminal.

Swift moves for Revythoussa capacity boost, FSU by July 30

Gas grid operator DESFA’s plan to boost the capacity of its LNG terminal on the islet Revythoussa, just off Athens, with the addition of a floating storage unit (FSU), is in full progress, the target date for its mooring being no later than July 30.

DESFA is now preparing to stage a related tender for this plan and, as a first step, is researching the international market to check on the availability of an FSU matching Revythoussa’s requirements, factors including the installation’s period, should a lease solution be chosen, and storage capacity.

RAE, the Regulatory Authority for Energy, is soon expected to decide on whether the FSU should be purchased or leased.

The authority is expected to hold a meeting today with DESFA officials to discuss the plan’s details.

DESFA has indicated it could lease an FSU for a period of between 12 to 18 months and, as part of this plan, would receive the vessel between May 1 and July 30.

The operator is moving fast as the European Commission has requested all EU natural gas storage facilities be filled to 80 percent of capacity by November 1. In addition, the danger of a Russian disruption of gas supply to Europe also requires swift action, as does the higher energy demand anticipated during the summer season.

 

Lignite extraction boosted as part of emergency plan

Power utility PPC has boosted its lignite mining output by an additional 5,000 to 6,000 tons a day for its Meliti and Agios Dimitrios power stations in northern Greece and by an extra 7,000 to 8,000 tons a day for its Megalopoli power station in the Peloponnese, in response to Prime Minister Kyriakos Mitsotakis’ call, early in April, for increased lignite reserves should Russia disrupt its natural gas supply to Europe.

The objective is to increase lignite extraction by 45 to 50 percent over a two-year period for reserves amounting to more than 15 million tons, up from the present quantity of 10.5 million tons, which would enable lignite-fired production to reach 6.5 TWh annually, up from 4.5 TWh projected in the current energy plan.

The majority of PPC’s seven lignite-fired power stations will need to be temporarily withdrawn if increased lignite quantities are to be accumulated at the yards of these power stations.

Of the country’s seven lignite-fired power stations, just one, Agios Dimitrios IV, is scheduled to operate today.

The additional 2 TWh of electricity generation that could be produced annually as a result of this initiative would still not suffice if Russia were to stop supplying natural gas to Europe.

Greece’s annual electricity consumption is estimated at 55 TWh. Last year, natural gas-fueled electricity generation covered 20 TWh of the country’s overall electricity demand, with 40 percent of the natural gas used supplied by Russia.

This means Russia’s natural gas was responsible for 8 TWh of Greece’s electricity generation last year. The Greek plan for an additional 2 TWh in generation through greater lignite production would only cover 25 percent of electricity currently produced using Russian natural gas.

Additional LNG shipments, accelerated development of RES projects, and an energy-saving policy for households, businesses and industry will also be needed to cover the gap.

Revythoussa LNG truck-loading station set for June launch

A prospective LNG truck-loading station at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, is expected to be launched in June, enabling up to 4,300 loads per year, according to a latest update from the operator.

DESFA submitted its proposals for operating framework revisions, as well as a pricing formula, to RAE, the Regulatory Authority for Energy, in December and is expecting these to be approved within the next few days.

Furthermore, the new LNG truck-loading station’s reservation platform is planned to begin operating next month, ahead of the station’s anticipated launch in June.

Due to LNG’s high concentration, the Revythoussa truck-loading station will enable specially equipped trucks to transport large quantities of the fuel along road routes, simulating natural gas pipelines for increased flexibility in gas supply.

Trucks loading LNG at Revythoussa will be transported to the islet by ferryboat. Routes to the islet will be offered from three different points around the wider Athens area, Elefsina, Perama and Almyra.

Revythoussa FSU purchase advantageous over rental

The purchase of a floating storage unit (FSU) for installation at the Revythoussa islet LNG terminal just off Athens, to boost the unit’s capacity for the country’s protection against a further supply crisis, is financially advantageous compared to a one-year rental of an equivalent floating storage system, officials at gas grid operator DESFA, operating the terminal, have determined following their analysis of a related cost-benefit analysis.

The analysis, forwarded for consultation by RAE, the Regulatory Authority for Energy, last Friday, compares the costs of purchase and rent solutions over a five-year period.

Taking into account depreciation over the five-year period, the purchase of an FSU works out to be 48.4 million euros cheaper than a rental solution, DESFA officials have calculated.

An FSU rental for one year would cost a net amount of 110.6 million euros, whereas a purchase would cost 172.8 million euros, ultimately beneficial over a five-year period, according to the DESFA officials.

A capacity boost at the Revythoussa LNG terminal is seen as crucial in the effort to protect the country’s energy supply security should Russia disrupt its natural gas supply to Europe.

If Moscow does decide to cut supply to the continent, Greece, it is estimated, will need to order an additional 50 or so LNG shipments over the next 12 months.

Revythoussa FSU 12-month rental or permanent solution

Greek authorities are making comparisons in preparation for a choice between an FSU one-year rental and a permanent floating storage unit at the Revythoussa LNG terminal as part of a plan to boost the country’s gas storage capacity ahead of next winter.

A decision for a capacity boost at the Revythoussa LNG terminal, with the addition of a fourth unit, has already been reached, highly ranked energy ministry officials have informed. A competitive procedure will be staged for the contract.

The option of renting an FSU for the Revythoussa LNG terminal, a facility operated by DESFA, the gas grid operator, would take approximately two months to complete, sources said.

This solution would make operations at the Revythoussa LNG terminal more flexible as it would enable unloading of two LNG orders simultaneously, instead of just one, as is the case at present.

A disruption of Russian gas supply to the EU would force all member states to try and secure additional LNG shipments.

The second alternative, entailing the installation of a permanent floating storage unit at the Revythoussa LNG terminal, would require more time to complete without offering any additional advantages, compared to the FSU rental, energy ministry officials noted.

Officials at RAE, the Regulatory Authority for Energy, are comparing market data such as domestic gas demand projections, and also considering Revythoussa’s prospects for a bigger role as a natural gas gateway for neighboring countries. Bulgaria and Romania are already using the Revythoussa terminal for LNG imports.

DESFA calls for doubled gas network capacity, PPPs

The country’s changing energy policy, especially following an EU decision aiming to drastically reduce Europe’s reliance on Russian natural gas, will require far greater gas transmission capabilities, inevitably prompting the need for a major network capacity boost, double the current capacity, with project participation from private-sector investors through public-private partnerships, DESFA, the gas grid operator, has informed RAE, the Regulatory Authority for Energy.

The EU’s energy policy, steering Europe towards energy-source diversification, promises to establish Greece as a southeastern transit country handling far bigger quantities than at present.

Speaking at the recent energypress Power & Gas Fourum, Michalis Thomadakis, DESFA’s Director of Strategy and Development Division, noted: “Certain projects need to be developed so that we can fully utilize the new role the Greek gas transmission system is being called upon to adopt in the wider region. This can only be done with investments. It basically means that the system’s capacity needs to be doubled.”

A disruption of Russian natural gas supply to Europe would create a need for approximately 40 bcm to the Balkan region. Much of this quantity would pass through Greek territory.

New infrastructure promising to greatly increase Greece’s LNG importing capacity is already in the making. Projects include the Alexandroupoli FSRU in the country’s northeast, the Dioryga Gas FSRU planned for the Korinthos region west of Athens, as well as an additional storage tank at Greece’s only existing LNG terminal on the islet Revythoussa, just off Athens.

Given these prospects, DESFA is currently looking to develop new pipelines and make network revisions that would facilitate greater quantities to other European markets.

 

 

Lignite re-emphasis temporary measure for security, PM says

A government decision for an increased lignite share of the country’s energy mix is purely temporary and driven by energy security concerns, Prime Minister Kyriakos Mitsotakis clarified during a speech yesterday in Kozani, northern Greece.

The same goes for Athens’ thoughts about extending the lives of state-controlled power utility PPC’s two lignite-fired power stations, Meliti and Agios Dimitrios V. PPC plans to withdraw these units by the end of 2023, as part of the country’s decarbonization strategy, but this exit date may now be delayed.

The technical future of PPC’s Ptolemaida V, a new convertible power station, is unclear. During yesterday’s speech, the Greek prime minister informed that, if needed, this facility would operate as a lignite-fired facility until 2028, before switching to natural gas. This switch could be made at an earlier date if the war ends and natural gas prices fall significantly, seen as unlikely at present.

This overall change in direction is directly linked to the European Commission’s decision to significantly revise the EU’s Fit for 55 plan, originally setting a target for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels. Details of the Fit for 55 revisions, prompted by the impact on markets of Russia’s ongoing war in Ukraine and the EU’s resulting decision to drastically reduce its reliance on Russian natural gas, are expected to be announced by the European Commission in May.

The EU’s new energy strategy is expected to lead to an increase in the use of biomethane and green hydrogen, as well as reduced gas consumption, regardless of the supplier, be it Russia, the USA, Qatar or Algeria.

Authorities admit the international LNG market cannot increase production to a level that would fully replace Russian gas supply.

FSRU at LNG terminal, Italy storage, lignite use decided

Energy minister Kostas Skrekas has staged an emergency meeting with the country’s crisis management team to establish measures that would need to be implemented should Russia decide to disrupt its natural gas supply to Europe.

Gas grid operator DESFA will need to deliver a cost-benefit analysis to the ministry by tomorrow on a plan entailing the addition of an FSRU at the Revythoussa islet LNG terminal, just off Athens, as a capacity-boosting move.

In addition, the operator has until Tuesday to report back to the ministry on the progress of its talks with Italy’s SNAM aiming to reserve storage capacity at the neighboring country’s underground gas storage (UGS) facilities.

DESFA must also update its estimate on additional LNG shipments that would be required in Greece if Russia disrupts its natural gas supply to Europe.

Gas company DEPA Commercial, Greece’s biggest gas importer, is closely monitoring the availability of LNG shipments in international markets in order to secure additional shipments, if this is deemed necessary.

Furthermore, power utility PPC will forward, by Tuesday, to the energy ministry, its annual lignite extraction plan for continual operation of its available lignite-fired power stations.

 

 

 

 

Europe on edge, tested by Putin’s ruble payment demand

Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.

 

 

 

War, energy crisis hastening plans for new LNG facilities

Russia’s war on Ukraine and the energy crisis are precipitating new natural gas and LNG supply solutions, a development that has increased the importance of related projects planned in Greece.

The EU’s decision to drastically reduce the continent’s reliance on Russian gas by two-thirds this year and terminate the dependence prior to 2030 has increased the importance of supply routes not linked to Moscow’s interests.

This development has increased the feasibility of new infrastructure promising to facilitate natural gas and LNG supply to Europe from alternative sources.

A major US-EU agreement established late last week for supply of an additional 15 bcm, at least, of American LNG to the continent this year, and gradual supply increases further ahead in time, has greatly boosted the prospects for related infrastructure.

The EU intends to follow up on this agreement by also establishing further supply deals with other producers, including Qatar and Egypt, in an effort to increase its LNG imports by a total of 50 bcm.

The EU’s new direction, focused on LNG imports, is seen as essential as the deterioration in relations between Europe and Moscow is expected to last many years.

Related projects in Greece promise to serve as LNG gateways for the country as well as southeast and central Europe, while also establishing Greece as a gas hub with an increased geostrategic role.

The Gastrade consortium recently decided to begin planning a second FSRU for Alexandroupoli, northeastern Greece, as an addition to a prospective first unit.

Petroleum group Motor Oil aims to begin development of its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by the end of the year.

Gas grid operator DESFA is preparing to further upgrade its LNG terminal on the islet Revythoussa, just off Athens.

Also, the Mediterranean Gas company is planning to develop an FSRU at Volos port, on the mainland’s east coast. RAE, the Regulatory Authority for Energy, has already issued a license for this project.

In addition, another investor, still undisclosed, is set to begin licensing procedures for yet another FSRU in Greece, sources have informed.

 

 

 

EU falls short of decisive action on energy price de-escalation

An EU-US agreement for supply of an additional 15 bcm of American LNG to the continent this year, as part of a plan envisioning annual supply amounts reaching 50 bcm by 2030, was the most important piece of news to emerge from the Brussels summit on March 24 and 25, along with a decision for joint LNG orders by the EU to producing countries.

Steps taken by the EU for natural gas and electricity price de-escalation were, once again, far from resolute. Though the EU leaders decided on the need for a price ceiling on natural gas, specific decisions were not taken. Instead, the European Commission was called upon to process proposals and present its conclusions by the next summit of EU leaders, scheduled for May.

Consumers in the EU, especially those in the south, more exposed to the energy crisis’ price fluctuations as a result of a lack of energy storage facilities, will, until further notice, need to keep persevering amid the insecurity and threat of escalated prices.

Today’s wholesale electricity price in Greece is 245.56 euros per MWh, up from Friday. Price levels in the short term will depend on how energy markets interpret the announcements following last week’s two-day summit.

 

 

EU headed for joint energy supply plan, challenges faced

The EU appears headed towards adopting a strategy for joint supply of natural gas, LNG and hydrogen, along the lines of a policy implemented for joint Covid-19 vaccination orders at the height of the pandemic, to combat skyrocketing energy prices, a draft prepared ahead of tomorrow’s summit, bringing together the EU’s 27 leaders, has indicated.

Governments of Europe’s south, hit harder by the energy crisis, and European consumers across the continent are anticipating measures that can help contain sharply increased gas, electricity and oil prices.

The joint supply plan’s implementation would come as a bold initiative by the EU, taking steps to greatly reduce its reliance on Russian gas, but various obstacles will need to be overcome.

Joint energy orders will be far trickier for the EU to execute than the mass orders it had placed with pharmaceutical companies for Covid-19 vaccinations back in June, 2020, as the former are commodities traded in fluctuating markets.

LNG suppliers such as the USA, Qatar and Algeria would have to redirect to Europe quantities usually shipped to Asian markets at highly profitable prices. Also, the reaction of China, America’s number one buyer of LNG, remains unknown.

The joint-supply strategy would be combined with the establishment of an energy safety reserve, as the European Commission has ordered EU member states to fill underground gas storage (UGS) facilities to 90 percent of their capacities by November 1, in preparation for next winter.

This would resolve energy sufficiency concerns but currently elevated prices are an issue. Also, many European UGS facilities have, until now, been managed by Russia’s Gazprom. It remains unclear if the Russian gas giant would be legally obliged to abandon these facilities.

The joint-supply strategy has been on the negotiating table since last year but held back by disagreements.

 

 

Revythoussa LNG terminal to acquire fourth storage facility

Gas grid operator DESFA is preparing to upgrade its Revythoussa LNG terminal on the islet close to Athens by adding a fourth LNG storage unit at the facility as a means of further reinforcing the country’s energy system for greater energy-crisis protection.

According to sources, the operator has finalized its decision on the plan, to be developed as a floating storage unit (FSU), or permanently moored LNG tanker.

The FSU’s storage capacity is planned to exceed 100,000 cubic meters, almost half the Revythoussa facility’s current 225,000 cubic-meter capacity offered by three existing LNG storage tanks installed on the islet.

Besides bolstering the Greek energy system, the Revythoussa LNG terminal upgrade also promises to create supply opportunities for Balkan markets.

In the event of a disruption of Russian gas to the Balkans, the Revythoussa LNG terminal, as it stands, could cover basic energy needs of the Bulgarian market. The Revythoussa LNG terminal is already supplying Bulgaria.

The terminal was last upgraded in 2018 with the construction of a third LNG tank, a 148 million-euro investment that has enabled transmission of gasified LNG quantities amounting to five billion cubic meters annually.

 

East Med regains attention as EU reshapes gas strategy

The energy crisis, skyrocketing natural gas prices, and the EU’s new energy policy, aiming to end the continent’s reliance on Russian gas as soon as possible, are developments creating bigger prospects for the East Med pipeline, whose development could upgrade Greece’s role in the energy sector as well as geopolitically.

Importantly, higher gas prices have boosted the feasibility of the East Med pipeline project, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, as was supported yesterday by Edison CEO Nicola Monti.

The US withdrew its support for the project in January, citing technical and commercial sustainability concerns. Many analysts have forecast gas price levels will remain elevated for an extended period, which could make East Med a profitable investment for companies that construct and operate the pipeline.

Earlier this week, the European Commission announced its ambitious Repower EU roadmap, prioritizing the search for alternative natural gas sources and supply routes as a means of ending the continent’s reliance on Russian gas.

East Mediterranean gas deposits are well positioned, close to European markets. It remains unclear as to whether it would be more beneficial to transport these gas quantities in the form of LNG or via the East Med pipeline.

Given the bolstered bargaining power of gas producers and LNG exporters, the EU could be better off pursuing a pipeline solution. Also, Shell’s forecast of an LNG shortage in international markets from 2025 onwards should be kept in mind.

DEPA Commercial plans extra LNG orders for March, April

DEPA Commercial is planning to place extra LNG orders for March and April as a result of higher consumption levels at natural gas-fired power stations, prompted by increased electricity exports, as well as a greater level of natural gas exports to Bulgaria.

The gas company intends to import three LNG shipments in April and is also considering an additional LNG order for this month, which would be shipped in along with a 40,000-cubic meter order placed by energy company Elpedison, scheduled to arrive in just a few days, on March 13.

Should DEPA Commercial go ahead with this latter March order, it would be the gas company’s second for the month. DEPA Commercial has already placed a 73,855-cubic meter LNG order that is due to arrive tomorrow.

Natural gas-fired power stations in Greece have been operating at full capacity in recent times to cover increased electricity exports to neighboring countries, where electricity prices have exceeded those of the Greek market.

Two days ago, electricity exports reached 27.5 GWh, while electricity imports were under 6 GWh.

Additional natural gas exports to Bulgaria in recent times have also prompted the need for more LNG in Greece.

To date, four LNG orders for March, totaling 261,447 cubic meters, have been placed by three companies, DEPA Commercial, Mytilineos and Elpedison.

In general, enterprises are moving cautiously with any extra LNG orders as a result of fluctuating natural gas prices in international markets. Companies placing gas orders at current price levels could be set back millions by any sudden price dip.

 

EC announcing plan to end EU dependence on Russian gas, oil

The European Commission will today present a new energy plan for the EU-27 that will aim to end Europe’s dependence on Russian natural gas imports, amounting to roughly 155 billion cubic meters per year, as well as Russian oil.

Tools to be used for an end of this energy dependence will include LNG imports from the US and Qatar, further LNG terminal investments throughout Europe, accelerated development of RES projects, and emphasis on biogas and hydrogen.

A preliminary announcement of the EU’s new energy doctrine was made yesterday by European Commission President Ursula von der Leyen following a meeting with Italian Prime Minister Mario Draghi.

She also spoke of the need to protect consumers, especially lower-income groups, as well as enterprises, against skyrocketing energy prices as the continent braces for even higher electricity prices next month.

If natural gas prices remain at levels of over 300 euros per MW/h, wholesale electricity prices in Greece could soon exceed 700 euros per MWh. The wholesale electricity price in Greece today is at 462.90 euros per MWh, up 52 percent in a day.

The energy market turbulence is expected to persist until at least early next year.

 

Gastrade decides on additional Alexandroupoli FSRU by 2025

Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal planned for Greece’s northeast, has reached a decision to also install an additional FSRU unit at the location, expected to be completed in 2025, as a follow-up to the first terminal, set for completion in 2023.

The consortium’s decision for an additional FSRU in Alexandroupoli had been in the making from as far back as last summer, when the energy crisis was at its early stages, but was accelerated by the long-term turmoil now seen in relations between the west and Russia following the latter’s invasion of Ukraine last week.

Russia’s invasion of Ukraine has further highlighted the need for Europe to reduce its dependence on Russian gas as soon as possible. A completely new reality now appears to be in the making.

Southeastern Europe’s gas needs to result from Europe’s reduced energy dependence on Russia, through strategic diversification, has increased the prospect of Greece’s northeast becoming an energy hub that would facilitate gas exports in all directions, including to Ukraine.

The Gastrade consortium is comprised of five partners, founding member Elmina Copelouzos of the Copelouzos group, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz, and DESFA, Greece’s gas grid operator, each holding 20 percent stakes.

All five partners have agreed to offer 2 percent each so that North Macedonia can enter the consortium with a 10 percent stake.

Escalating war increases threat of gas shortages, prices surging

The escalating war in Ukraine following last week’s invasion by Russian forces has increased fears of natural gas shortages in the European market, which has led to a new price surge, adding to the price ascent prompted by the preceding energy crisis.

Markets are now jittery over concerns that the ongoing bombardments in Ukraine could damage gas pipelines running across the country. The prospect of a Russian retaliation to stricter sanctions threatened by the west is another concern pressuring markets.

Greece is in a somewhat sheltered position as the country imports Russian gas quantities via the Turkstream pipeline, crossing the Black Sea, but, given the overall developments, Athens cannot remain complacent.

The country’s crisis management committee will be meeting again today to discuss measures should the adverse conditions created by Russia’s war in Ukraine deteriorate further.

Greek authorities are expected to try and maintain reserves at the country’s LNG terminal on the islet Revythoussa, just off Athens, as close as possible to full capacity, and use pipeline gas to the fullest extent.

The country’s gas needs for March have been fully covered by four LNG shipment orders – two by Elpedison, and one each by Mytilineos and DEPA – expected at the Revythoussa terminal. Additional orders could be placed if needed. LNG orders have yet to be placed for April.

Natural gas prices surged yesterday, ending the day at 121 euros per MWh. At such a level, retail electricity prices could reach close to 300 euros per MWh. Today’s retail electricity price is 254.94 euros per MWh.

Europe now appears determined to reduce its dependency on Russian gas, covering between 40 and 45 percent of the continent’s needs. The issue has become a top priority on the EU agenda, but the road towards achieving this objective remains unclear.

EC stresses need for increased LNG imports, diversification

The European Commission, according to an official document that was recently leaked, has called for wider energy source diversification in Europe, greater LNG imports, as well as better utilization of infrastructure by EU member states, which would reduce the amount of Russian gas needed in the EU.

The number of LNG facilities and interconnections has increased since a previous crisis in 2009, enabling all European countries to have either direct or indirect access to LNG terminals, the document notes.

Europe’s improved grid interconnectivity has proven crucial over the past few months in the continent’s ability to tackle the latest energy crisis, the document highlights.

The European Commission has proposed an increase in LNG imports, noting terminals and interconnections are not operating at full capacity.

The European Commission is currently holding talks with gas-producing countries and gas transit countries (USA, Qatar, Japan, Egypt, Azerbaijan and Turkey) to facilitate gas trade by making the international gas market more flexible.

The Brussels document also proposes the conversion of European natural gas projects into hydrogen projects as well as the establishment of green hydrogen agreements with countries that are ready to produce hydrogen on a large scale for supply to Europe, including Australia, Chile, Morocco, Namibia, Saudi Arabia, UAE and Ukraine.

 

Athens to discuss plan should Russian gas supply be cut

The Greek government is on high alert fearing the entry of Russian troops into two rebel-held regions in Ukraine’s east could disrupt Russian natural gas supplies to Europe and prompt energy insufficiencies, including in Greece.

In response to the development, energy minister Kostas Skrekas has been asked to attend an emergency meeting of the Government Council for Foreign Affairs and Defense (KYSEA), to be headed by Prime Minister Kyriakos Mitsotakis, and present a detailed update on the strategy he could implement to avert a natural gas shortage in Greece should Russia disrupt its gas supply to Europe or the EU imposes economic sanctions on Russia, including its gas exports.

Russian president Vladimir Putin has recognized Donetsk and Luhansk as independent states.

The fundamentals of the Greek energy minister’s plan had been presented at a recent government meeting on February 14.

According to sources, the worst-case scenario would entail a disruption of Russian natural gas supply via the TurkStream pipeline, which supplies Bulgaria and then Greece.

In this event, Greece would need to utilize gas grid operator DESFA’s LNG terminal, on the islet Revythoussa just off Athens, to its fullest, as well as the TAP pipeline supplying natural gas from Azerbaijan.

The Revythoussa LNG terminal is currently filled to capacity and would remain so with two shipments each month for as long as the Ukraine crisis continues, sources have informed.

However, the big question for Greece, and Europe as a whole, is whether LNG shipments will be available, and at what price.

Milder weather conditions, resulting in less gas consumption, would help ease the pressure on grids throughout Europe.

Small-scale LNG supply to detached locations now imminent in Greece

The arrival of small-scale LNG supply in Greece is now imminent following the completion in the  construction of an truck loading station at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens.

Revythoussa’s LNG truck loading station, the first such installation in southeast Europe, represents an important step towards the introduction of small-scale LNG supply in Greece. A second step, the installation of an LNG jetty by DESFA at its Revythoussa facility, is planned to soon follow.

Once this project is completed, Greece will become Europe’s latest country possessing truck-loading facilities, enabling LNG supply from Revythoussa to non-interconnected facilities around the country.

This prospect will offer greater energy supply flexibility to Greek industries, small-scale producers and farms in remote areas detached from the country’s natural gas grid.

 

European gas reserves rise slightly, helped by LNG inflow, weather

Europe’s natural gas reserves have risen slightly, helped by the arrival of LNG tankers at European shores in recent weeks and, possibly more crucially, the mild winter weather experienced around the continent during the festive period, latest data has shown.

Gas deposit deficits have narrowed since December 24, while inflow marginally exceeded consumption between December 30 and January 1, according to Gas Infrastructure Europe (GIE).

This trend is definitely beneficial for Europe ahead of the further winter period, improving reserve levels for greater sufficiency until March.

Natural gas prices in Europe dipped to 66 euros per MWh yesterday before rebounding to 80 euros per MWh.

At present, it is estimated that 46 American LNG tankers are bound for Europe carrying a combined quantity of approximately 4.1 billion cubic meters. It remains to be seen if gas prices can keep falling.