Mediterranean Gas

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

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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.

War, energy crisis hastening plans for new LNG facilities

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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.