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Energy ministry multi-bill at parliamentary committee

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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

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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

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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

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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

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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

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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

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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’

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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

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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

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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

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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

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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

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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’

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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.

 

Four LNG shipments planned for Revythoussa terminal in January

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Four LNG shipments totaling 443,130 cubic meters are scheduled to be delivered to gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, in January, a quantity that is roughly half the amount planned for this month.

More specifically, for January, the Mytilineos group has ordered an LNG shipment of 147,710 cubic meters, gas utility DEPA has placed an order for 73,855 cubic meters, Elpedison has ordered 147,710 cubic meters and Swiss company KOLMAR has ordered an LNG shipment of 73,855 cubic meters.

 

 

Greece becoming a key gas exporter, rise in loads relayed

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Greece is developing into a major exporter of natural gas with roughly one in three shipments that reach the country relayed to other countries, well over last year’s level of 9.8 percent.

Russia’s war on Ukraine has increased the geostrategic importance of Europe’s south, including Greece, in terms of gas transportation, supply routes from the continent’s south to north now dominant, a reversal of the flow in previous decades.

LNG shipments to Greece supply a large number of landlocked European countries, all the way north to Ukraine. As a result, Greece’s gas exports have skyrocketed in 2022.

In the first eleven months this year, the country’s gas exports reached 26 TWh, more than triple the level recorded for all of 2021, when the year’s gas exports totaled 7.6 TWh.

Greece’s gas exports are expected to rise even more in 2023 as a result of last October’s launch of the IGB pipeline running from Greece to Bulgaria.

Technical solutions are now being sought so that gas exports can also be made via the IGB pipeline as soon as the Alexandroupoli FSRU, a project led by Gastrade, is launched in late 2023. The Alexandroupoli LNG terminal’s arrival will further boost Greece’s capacity to export gas.

 

 

Greek LNG imports increase ranked among world’s highest

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Greece is ranked 12th on an international list of 45 countries registering the biggest LNG import increases between January and October this year, according to a report presented yesterday at the World LNG Summit & Awards by independent LNG consultant Andy Flower.

Greek LNG imports during this period increased by approximately one million metric tons compared to the equivalent period in the previous year, the report showed. This increase highlights Greece’s rising stature as an emerging gas hub for gas transportation to the Balkans and eastern European countries.

France topped the list with an increase in LNG imports of approximately 10 million metric tons (mtpa), followed by the UK with a 6 million mtpa increase, and Spain with an increase of just under 6 million mtpa.

Greece’s prospective Alexandroupoli FSRU, in the northeast, offers potential for an even greater increase in LNG imports as, once completed, the facility will stand as one of the EU’s biggest FSRUs and LNG terminals.

The Alexandroupoli FSRU promises to offer a regasification capacity of 4 million tons and a storage capacity of 153,500 cubic meters, figures making it Europe’s fourth biggest FSRU.

Gas-fueled power stations output down, Italy imports up

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The energy-mix share of gas-fueled power stations has contracted significantly as a result of the country’s rigid month-ahead pricing method used for natural gas, which prevented electricity producers from taking advantage of falling spot market prices throughout October. Gas prices remained fixed at higher price levels recorded at the end of September.

Given the circumstances, energy companies chose to shut off gas-fueled power stations in significant numbers. This resulted in a sharp increase of electricity imports from Italy, where, as is also the case in other European markets, the spot market greatly influences gas price levels.

Italy’s day-ahead electricity market was below that of Greece’s throughout October, ending the month at 211.63 euros per MWh, compared to 232.6 euros per MWh in Greece, Europe’s highest, despite a 44 percent drop from September.

Gas-fueled power stations in Greece ended up representing just 23 percent of the energy mix in October, well below usual levels of around 40 percent.

New European LNG benchmark to be shaped by EU-27 prices

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Europe’s new LNG benchmark will be determined by LNG price-level data presented by the EU’s 27 member states, the objective being to offer a broader, better-balanced and more reliable pricing formula than the existing one, shaped by the Dutch TTF index, sources have informed energypress.

ACER, Europe’s Agency for the Cooperation of Energy Regulators, will present a preliminary plan for this new market correction mechanism at a meeting in Brussels today to be attended by the EU’s permanent representative committee, Coreper, involving all EU member states.

The new European LNG benchmark, promising a more accurate reflection of international prices for LNG, the dominant global energy source at present, will not affect existing agreements, officials have pointed out.

EU officials are striving for an imminent launch of this new LNG pricing tool, the aim being to have it introduced by early 2023. Last month, the European Commission noted it wants the new LNG benchmark to be ready by March 23.

On a wider scale, although the European Commission hopes EU member states can resolve differences for a common solution to the energy crisis, there have been no indications of possible consensus. On the contrary, the North-South divide remains and expectations for a common European approach to the issue this winter are extremely low.

Revythoussa LNG gasification demand doubles capacity

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Gasification demand for prospective LNG shipments to be delivered to the LNG terminal on the islet Revythoussa, just off Athens, by importers who have secured slots at the facility, has doubled the facility’s gasification capacity during the second stage of gas grid DESFA’s ongoing annual auction for 2023.

Gas companies secured Revythoussa slots for their LNG imports at the auction’s first stage last week and are now bidding for gasification places in the procedure’s second stage, which started yesterday and will be be completed tomorrow.

Gasification capacity available at the Revythoussa LNG terminal is approximately 15 million cubic meters per day, but gasification bids, it has become known, are currently two times over this capacity.

High gasification demand had been anticipated given the enormous potential for natural gas exports to the Balkans, as was highlighted be the high bids for Revythoussa LNG slots placed by importers at last week’s auction. Slot prices reached as high as 4 million euros, three-and-a-half times over price levels recorded a year earlier.

Revythoussa LNG slot prices soar, driven by Balkan exports

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Driven by LNG export potential to Bulgaria and the wider eastern European region, energy companies have submitted bids of between 3.5 and 4 million euros for slots at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens.

These bids, made at an ongoing DESFA auction offering slots for the next four years, are roughly three-and-a-half times higher than price levels recorded last year.

Two Bulgarian companies, Bulgargaz and Kolmar, as well as Greece’s power utility PPC and Motor Oil, were the winning bidders at the auction’s session yesterday, securing four of eight Revythoussa slots offered. The other four slots are expected to be taken by bidders today.

Earlier in the week, on Monday, gas company DEPA secured eight slots for 4 TWh, Mytilineos secured five slots for 5 TWh, as did and Bulgaria’s MET.

Greece’s recent transformation as a strategic gas exporter for the wider region has prompted a surge in demand for slots at the Revythoussa LNG terminal.

During the year’s first nine-month period, the country’s gas exports increased by 293 percent, representing over 20 TWh. Bulgaria was the main recipient. Greece has been covering the neighboring country’s gas needs for some months now, following natural gas pipeline disruptions from Russia.

 

Energy crisis gap bridging the main aim at today’s EU summit

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The EU’s 27 leaders participating at today’s EU summit will strive to heal divisions that have created blocs within Europe for energy crisis solutions rather than seek finalized solutions on how price levels could de-escalate.

The EU-27 will be asked to agree to European Commission proposals announced yesterday. They include collective natural gas orders for reinforced bargaining power and prevention of bidding wars by fellow EU member states for LNG quantities, as well as a supplementary gas benchmark offering a more accurate reflection of market conditions.

A Brussels request concerning a temporary price cap on gas used for electricity generation, a strategy already adopted by Spain and Portugal, is expected to be contested by the EU leaders.

Brussels considers the proposal for a price cap on gas used for electricity production should be further examined, judging by European Commission president Ursula von der Leyen’s comments in European Parliament yesterday.

France, using minimal amounts of gas for electricity generation as a result of its considerable nuclear capacity, has expressed support for such a plan. Germany accepts it but Greece, Italy, Belgium and other EU member states object as a result of the significant fiscal cost entailed.

Some EU members favoring a general price cap on gas, including Greece and, more recently, the Netherlands, are expected to remain adamant on their  preferred approach at today’s summit.

Germany strongly opposes a general price cap on gas, fearing it will repel gas suppliers and push up prices as a result of reduced supply and higher demand.

International gas prices lowered by favorable conditions

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More favorable market conditions of late have prompted a de-escalation of international gas prices, currently on a downward trajectory. This morning, the international price for natural gas reached as low as 107.355 euros per MWh, a new four-month low.

Market officials explained that LNG is currently available in abundance with some tankers unable to secure delivery destinations as Europe’s storage facilities are close to full.

At the same time, demand for Russian gas in Asia, primarily China – where Russia has turned to as a result of restricted exports to Europe – has fallen significantly. Mild weather conditions in Europe at present have helped contain demand for gas.

This gas price drop will not become fully apparent in the retail market until mid-November – unless a new price surge is experienced – as prices are set based on the previous month’s prices.

Brussels seeks to prevent internal EU bidding for LNG

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A European Commission proposal for joint European gas orders, one of the most crucial aspects of Brussels’ energy-crisis package to be discussed at tomorrow’s EU summit, aims, besides boosting Europe’s bargaining power, to prevent EU member states from bidding against each other, an unwanted prospect that would increase prices, ultimately favoring stronger members.

The Brussels proposals also include a measure that would discourage speculation in derivatives through the establishment of a temporary intraday price-increase mechanism. It would protect market players from huge price fluctuations within the same day by setting limits. TTF fluctuations above and below limits set will be prohibited, according to this proposal.

The details of how these two proposals could actually work remain to be seen.

“The LNG market is in danger of becoming a jungle. Things will be tight in coming years and a first-come, first-served logic could prevail. In practice, this means bigger countries will manage to buy faster and cheaper than smaller ones, so a brake is needed,” Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, told energypress.

Unrestricted competition between countries would drive up prices, undesired by all, as an oligopoly exists in LNG supply, the professor added.

November electricity prices, out tomorrow, down 15-20%

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The country’s electricity suppliers, now finalizing their pricing policies for next month, are expected to announce, tomorrow, reduced tariffs for November, down by 15 to 20 percent compared to the current month’s levels, sources have informed.

Based on new law, suppliers are required to announce their electricity prices for the forthcoming month by the 20th of each preceding month.

Supplier tariffs, sources informed, should range between 0.45 to 0.50 euros per MWh, which, if confirmed, will result in a reduction of between 15 and 20 percent, compared to October’s prices.

The government’s level of subsidy support for electricity bills next month has yet to be announced. Given the current de-escalation in electricity prices, the government may choose to only rely on the Energy Transition Fund for next month’s subsidies and not use any budget money for this purpose, sources said.

Market analysts are projecting further electricity price reductions until the end of the year as a result of a drop in TTF natural gas prices. The Dutch index has fallen by 66 percent since an August 26 peak of 349.90 euros per MWh, reaching 116.45 euros per MWh yesterday.

The EU’s overachievement of gas storage levels, now averaging 91 percent of capacity, as well as an abundance of LNG supply to Europe, are key factors that have driven down the TTF.

 

Political agreement sought for gas price cap, eyes on Germany

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Though no gas price-cap decision is expected at today’s informal EU meeting of heads of state, participants will be expected to establish the basis for a political agreement at the European Council meeting on October 20.

All eyes are on Germany following a significant step taken by the European Commission to adopt a proposal forwarded by 15 EU member states supporting a price cap on gas. The German government now appears to the considering the proposal but an agreement is not yet guaranteed.

If Berlin is to accept the gas price cap proposal, assurances will be needed on how the risk of LNG shipments straying to Asian markets – where buyers appear willing to offer whatever sums are necessary to secure shipments, instead of staying in Europe – may be eliminated.

Another issue the German government would want addressed to offer its consent concerns how a rise in gas demand, as a result of lower prices, can be prevented.

Disagreement between Berlin and other EU member states on a gas price cap has now somewhat softened. The matter is gradually shifting away from the political sphere and closer to market reality.

Greece, Belgium, Italy, Poland and Spain, the five EU member states most supportive of a price cap on natural gas, represent the nucleus of the 15 member states calling for a gas price cap and are working feverishly on a flexible proposal to be forwarded to the European Commission as soon as possible.

Germany considering price cap, gas usage drop a condition

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The German government now appears to be considering an EU proposal for a price cap on gas ahead of tomorrow’s informal EU meeting of heads of state, but Berlin’s acceptance of such an initiative would be conditional, requiring a compulsory and significant reduction in gas consumption levels throughout the EU.

Germany’s Vice Chancellor Robert Habeck, who heads the country’s energy portfolio, set this condition during a meeting yesterday with the energy ministers of Greece, Belgium, Italy, Poland and Spain, representing the five EU member states most supportive of a price cap on natural gas.

The European Commission’s recent proposal for an optional reduction in gas consumption would need to be made compulsory if Berlin is to accept a price cap on gas, Habeck told the five energy ministers, according to sources.

Despite Germany’s softer stance, work is still needed if a price cap on gas is to be implemented. An official decision cannot be reached at tomorrow’s EU meeting of heads of state as it is an informal session.

It will be followed by another informal meeting in Prague next Tuesday between the EU’s energy ministers.

Brussels is also working on the establishment of a new benchmark for natural gas that better reflects Europe’s new energy reality in which LNG, not pipeline gas, is now the dominant gas source.

RAE approvals steps towards new FSRUs off Corinth, Thessaloniki

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RAE, the Regulatory Authority for Energy, has approved Elpedison’s Thessaloniki FSRU project as well as the final phase of a market test for Motor Oil’s FSRU plan, Dioryga Gas, off Corinth, west of Athens.

For Elpedison, the authority’s approval essentially signals the go-ahead for the Thessaloniki FSRU (floating storage unit) as the decision awards a 50-year project license until 2072.

A 50-50 joint venture involving Elpedison’s two partners, Edison and HELLENiQ, formerly known as Hellenic Petroleum (ELPE), the Thessaloniki FSRU will be developed at the Thermaic Gulf, just a few kilometers from Dock 6 at Thessaloniki port.

The Thessaloniki FSRU, planned to consist of four storage tanks offering a total of 170,000 cubic meters, is scheduled to be launched in 2025.

Besides approving guidelines for the final phase of Motor Oil’s market test concerning the Dioryga Gas FSRU project off Corinth, RAE also approved a capacity boost for this project, to 210,000 cubic meters from 170,000 cubic meters, as had been specified in the project’s original license, as well as Diorygas Gas’ transfer to Motor Oil’s MORE subsidiary, also hosting the petroleum group’s RES projects.

 

DEPA’s TotalEnergies LNG deal a break away from Russia, TTF

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A gas supply agreement reached between DEPA Commercial and France’s TotalEnergies, securing, for the former, French LNG quantities totaling 10 TWh, nearly one-third of annual Russian gas supply, based on references prices not linked to the Dutch TTF hub, up to 90 euros per MWh more expensive than other hubs, paves the way for further agreements not connected to the TTF and Russian supply.

According to sources, DEPA Commercial is currently working on a strategic long-term LNG supply agreement with another major international player, once again using a pricing formula linked to a hub other than the TTF.

These moves are ensuring energy sufficiency for DEPA Commercial’s customers as well as the country, at competitive prices.

DEPA Commercial’s 10-TWh LNG agreement with TotalEnergies, which, according to sources, will result in supply from November until March next year, is equivalent to five months of Russian gas consumption in the Greek market.

The TotalEnergies amount should be enough to cover the country’s needs during this five-month period if Russia completely disrupts gas supply to Europe. In 2021, Greece’s gas imports from Russia totaled 35.37 TWh.

The Greek energy ministry’s leadership and DEPA Commercial officials are preparing for a trip to Azerbaijan, postponed three weeks ago, to seek an agreement for further gas quantities, at prices that are more competitive than the current Azerbaijani supply deal, DEPA Commercial’s most expensive.

 

 

Operators tasked with LNG refueling of autonomous gas networks

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LNG refueling at autonomous gas networks will be assigned to companies developing this infrastructure, RAE, the Regulatory Authority for Energy, has decided.

RAE took its decision after Italgas, buyer of gas company DEPA Infrastructure, responded favorably to a proposal by the authority for DEPA Infrastructure’s distribution subsidiaries to take on the refueling task at autonomous gas networks.

Gas grid operator DESFA was also interested in taking on these services. Grid operators are most appropriate for network refueling services as they have a clear picture of consumption levels at any given moment, and, by extension, LNG refueling needs.

Hesitation by some operators prompted RAE to turn to Italgas. The Italian company is already accustomed to autonomous gas network refueling as a result of an equivalent model it applies for Sicily, where local networks are refueled with LNG.