Greek enterprises face April 27 date for hydrogen project proposals

Leading Greek energy players are gearing up to participate in a European Commission effort concerning the development of the continent’s first major investments in eco-friendly hydrogen production, a key aspect in Brussels’ decarbonization drive.

Interested parties face an April 27 deadline to submit proposals concerning a number of categories, including PCI-supported sustainable low-emission hydrogen production, the emphasis placed on RES-generated hydrogen.

The White Dragon project, as it has been dubbed, has brought Greece’s biggest industrial corporations closer, as they prepare to jointly bid for project categories Brussels will subsidize in the context of the Hydrogen Europe program.

The White Dragon project provides for investments of 2.5 billion euros in electrolytic hydrogen production by means of solar energy from photovoltaic parks with a capacity of 1.5 GW. They are planned for northern Greece’s west Macedonia region, a lignite-dependent economy.

Gas utility DEPA, gas grid operator DESFA, petroleum group Motor Oil, the Mytilineos group, Terna, Hellenic Petroleum ELPE, Polish company Solaris, as well as the Demokritos National Center for Scientific Research and the Center for Research and Technology Hellas (CERTH) are taking part.

The hydrogen to be produced will be used for district heating, fuel to be exported via the Trans Adriatic Pipeline, and as fuel for large vehicles such as lorries and buses.

 

Motor Oil ‘Dioryga Gas’ FSRU on DESFA 10-yr plan, set to roll

Approval by RAE, the Regulatory Authority for Energy, of gas grid operator DESFA’s ten-year grid development plan, covering 2021 to 2030, with the inclusion of petroleum group Motor Oil’s “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, paves the way for this unit’s actualization.

Motor Oil anticipates the FSRU, promising to offer yet another natural gas entry point to the domestic system, can be launched by the end of 2023.

To accept LNG via sea routes, the floating storage regasification unit’s capacity is estimated at 2-3 bcm per year.

The “Dioryga Gas” FSRU project was incorporated into DESFA’s ten-year development plan following amendments to a preliminary plan, made once an agreement had been reached between the gas grid operator and Motor Oil.

This agreement ended a dispute between the two sides over the project’s absence from the operator’s ten-year plan. Motor Oil protested against the FSRU’s exclusion, expressing its disapproval to DESFA as well as RAE.

The project’s inclusion on DESFA’s ten-year plan will enable Motor Oil to take investment decisions needed for its development.

The petroleum group is currently also examining the regulatory and commercial frameworks concerning the project with the aim of offering optimal services to users. Motor Oil intends to stage a market test in 2021.

The “Dioryga Gas” FSRU project will ease the saturation pressure on Greece’s other FSRU, on the islet Revythoussa, just off Athens, reinforce gas supply to the Greek market as the country’s LNG storage capacity will increase by 80 percent, and also facilitate further penetration of natural gas in remote parts of the country.

Motor Oil buys Fortress 240MW RES units, ELPE also a bidder

Petroleum company Motor Oil, a member of the Vardinogiannis group, has acquired a 240-MW wind energy portfolio from private equity fund Fortress for a sum estimated at 123.5 million euros, renewable energy market sources have informed.

The Vardinogiannis group yesterday announced this acquisition, comprised of 220 MW in existing wind energy units and a 20-MW wind energy project now under construction, without naming the seller.

Motor Oil was named the preferred bidder following a two-round tender staged by Fortress that included Canadian fund Cubico in the second round, the sources informed.

The majority of this portfolio’s wind farms are located in central and northern Greece.

Interestingly, fellow Greek petroleum company Hellenic Petroleum (ELPE) also participated in the tender but did not make it past the first round, the sources said.

Both Motor Oil and ELPE have set ambitious goals for the addition of RES units to their respective production capacities.

Motor Oil, which had set an objective to build a RES portfolio of more than 300 MW over a two-year period, is already there given its existing installed capacity – prior to this acquisition – which exceeds 100 MW.

Had ELPE added the Fortress wind energy farms to its portfolio, it, too, would have taken a big step towards achieving its RES objective, set at 500-MW. The group is currently developing a 200-MW solar farm in the west Macedonia area, northern Greece.

Fortress, represented in Greece by local associate Nostira, had bought the aforementioned portfolio in September, 2018 from the Libra group, headed by shipowner George Logothetis.

 

Motor Oil launches west Balkan growth plan, under Shell brand, in Croatia

Petroleum retailer Coral, a member of the Motor Oil group, is eyeing west Balkan markets, troubled by gasoline and diesel quality and trading concerns, on the strength of the strong Shell brand name it represents.

The Motor Oil group acquired Shell Hellas in 2010 in a deal licensing the company to market the multinational’s brands. Motor Oil then renamed Shell Hellas as Coral and, approximately four years ago, founded companies in North Macedonia, Albania, Montenegro and Serbia.

Coral’s acquisition of a 75 percent stake in petroleum retailer Apios, holding a 3 percent share of the Croatian market and operating 26 petrol stations in the country, represents the beginning of the Greek firm’s growth plan for the west Balkan region, company officials said.

Croatia, this investment plan’s launch pad, is backed by robust economic projections. The country’s tourism industry has enjoyed solid growth over the past two years, generating increased revenues for petroleum firms.

Beyond Croatia, Coral plans to soon open two petrol stations in North Macedonia, under the Shell brand name. The company is also planning to enter the markets of Albania and Montenegro, where it also maintains the rights to use the Shell brand name.

Coral already operates five petrol stations in Serbia and is preparing to launch an additional six in this country.

 

Suppliers target electromobility, smart home and city markets

Domestic energy suppliers, targeting the electromobility, smart home and smart city markets, are closely following rapid technological developments, internationally, company executives told an industry event, the 4th Ecomobility conference, held yesterday.

Elpedison, anticipating electromobility market growth, is offering related services for homes and businesses through its DriveGreen package, which includes electricity tariffs below night rates on a 24-hour basis and free-of-charge kilowatt hours every month for electric vehicle usage, the company’s chief executive, Nikos Zahariadis told the event.

A National Energy and Climate Plan projection on the auto market penetration of electric vehicles by 2030 is too ambitious as a result of high price tags on electric vehicles, lack of infrastructure and lofty taxes, Zahariadis noted. Revisions are needed if the NECP’s electromobility objective is to be achieved, he added.

Aristidis Grammatikopoulos, product development manager at energy supplier Fysiko Aerio, informed of the company’s participation in the development of recharging infrastructure. Fysiko Aerios has also prepared special packages and services for supply and installation of smart recharging units for domestic use, he added.

The Fysiko Aerio official also announced new smart-tech services, via mobile phone, offering customers optimal energy packages though an algorithm linked to individual energy consumption patterns.

Greek market data in 2020 show potential for the electromobility sector, despite difficulties, energy supplier NRG’s strategic manager Ilias Petris asserted.

The development of recharging infrastructure is the most pivotal factor for electromobility market growth, the NRG official stressed, adding that a current focus on the wider Athens area requires adjustment for a widespread approach.

The Motor Oil group, owner of NRG, has been a pioneer in electromobility through the installation of recharging networks along national highways as far back as two years ago, Petris noted.

 

Gas market competition intensifies, TAP lowering prices

Competition has intensified in the country’s wholesale gas market at a time of changing conditions and negotiations for 2021 deals between importers and major-scale consumers, namely electricity producers and industrial enterprises.

Many gas supply contracts expired at the end of 2020, requiring a large number of players to renegotiate deals. Some of these big consumers have already reached new agreements with gas wholesalers.

Market conditions have changed considerably compared to a year earlier. Supply of Azeri gas through the new TAP route has already begun to Greece as well as Bulgaria, increasing overall supply, which has obliged, and permitted, gas utility DEPA to pursue a more aggressive pricing policy as the company pushes to absorb quantities it has committed to through clauses in existing contracts.

Also, the TAP-related increase of gas supply to Bulgaria, combined with this country’s inflow of Russian gas through oil-indexed price agreements, currently relatively cheaper, is now depriving Greek wholesale gas companies of entry into a neighboring market that was available for trading activity last year.

Furthermore, conditions have also been impacted by a competition committee decision no longer requiring DEPA to stage gas auctions to make available a share of its gas orders to rival traders. This measure was introduced and maintained to help liberalize Greece’s gas market.

The new conditions are pushing Greek traders towards more competitive pricing policies. They appear to have acknowledged that their profit margins will be narrower in 2021.

DEPA, helped by the fact that a sizeable proportion of its gas purchases is oil-indexed, is said to be playing a dominant role in the ongoing negotiations for new contracts with customers.

It should be pointed out that, unlike rival gas importers such as Mytilineos, Elpedison and Heron, all benefitting through self-consumption of a large part of their gas orders for gas-fired power stations they operate, DEPA does not self-consume.

Prometheus Gas, a member of the Copelouzos group, remains a formidable player, while the power utility PPC and petroleum company Motor Oil are less influential in the wholesale gas market.

Higher LNG prices, compared to pipeline gas, will decrease demand for LNG this year and weaken the interest of traders for LNG supply through gas grid operator DESFA’s Revythoussa terminal on the islet just off Athens. Last year, this facility was a hot spot of trading activity as a result of lower-priced LNG.

Producers seeking lower-cost industrial electricity alternatives

Industrial electricity consumers of the high and mid-voltage categories are securing lower-cost agreements with independent suppliers, while energy-intensive consumers, currently negotiating with power utility PPC for new tariffs to take effect January 1, are pushing for better deals.

These developments are reshuffling the industrial electricity market, previously dominated by PPC.

Independent energy company Heron and Macedonia Paper Mills (MEL) recently announced an electricity supply agreement that includes a package of services for energy efficiency, electromobility and RES coverage of the producer’s energy needs.

Cement producer Heracles had previously reached an electricity supply agreement with Protergia, a member of the Mytilineos group, paving the way for further agreements between producers and independent suppliers.

These developments have had a wider knock-on effect, including for mid-voltage supply, as demonstrated by an agreement between energy supplier NRG, a member of the Motor Oil group, with the country’s other cement producing giant, Titan.

Following losses in 2018 and 2019, PPC is believed to be turning its focus on more profitable sectors and is no longer interested in maintaining a high share of the industrial electricity market – both high and mid-voltage.

DEPA Comm VDR open; 5-year stay for Infrastructure buyer

The video data room for the privatization procedure of DEPA Commercial, one of two new gas utility DEPA entities placed for sale, is now open to prospective bidders, but initial information made available is limited to non-financial details.

Financial details on DEPA Commercial will be made available as a second step to all consultants representing the potential buyers, while a third and final stage will follow to conditionally offer bidders confidential information in person at the DEPA headquarters.

As previously reported, the second-round, binding-bids deadline for the DEPA Commercial sale, offering investors a 65 percent stake, has been extended to March, 2021.

The field of second-round qualifiers is comprised of two partnerships, Hellenic Petroleum (ELPE) with Edison and power utility PPC with Motor Oil Hellas, plus Mytilineos, TERNA, the Copelouzos group, Shell, and the Swiss-based MET Group.

As for DEPA Infrastructure, the other new DEPA entity up for sale, energy minister Costis Hatzidakis is preparing a legislative revision that will require the winning bidder to retain its company shares for a period of at least five years.

This condition will also apply for the DEPA Infrastructure subsidiaries EDA Attiki, EDA Thess and DEDA, the gas distributors covering the wider Athens area, Thessaloniki-Thessaly and rest of Greece, respectively. DEPA fully owns DEDA and EDA Attiki and holds a 51 percent stake in EDA Thess.

The DEPA Infrastructure binding-bids deadline has also been extended to the end of February, 2021. Italgas, EPH, First State Investments, KKR, Macquarie and Sino-CEEF have qualified for the final round.

 

Business plan, better results, new activities in DEPA Commercial VDR

The virtual data room for a forthcoming privatization to offer a 65 percent stake in DEPA Commercial, an offshoot of gas utility DEPA, expected to be opened for potential buyers to assess by the end of this week, will present a business plan, improved financial figures at DEPA, new company activities envisaged, as well as DEPA’s outlook on the course of the country’s natural gas market and the company’s position within it.

According to privatization fund TAIPED’s revised Asset Development Plan, participants will submit binding bids in December.

The field of first-round entries, comprising two consortiums and five companies, will have roughly three months to prepare binding bids, according to the schedule.

Hellenic Petroleum ELPE and Italy’s Edison are one of the privatization’s two participating consortiums, the other formed by power utility PPC and Motor Oil Hellas. The five individual participants are: Mytilineos, TERNA, Copelouzos group, Shell and the Swiss-based MET group.

New partnerships could be established by the field of participants as long as they do not affect the sale’s competition standards and have been approved by TAIPED.

The sale of DEPA Commercial is a major attraction for potential buyers as it offers a big slice of the wholesale and retail markets, including gas supplier Fysiko Aerio Attikis, a subsidiary covering the wider Athens area. Fysiko Aerio Attikis already serves close to 400,000 households and 10,000 businesses.

DEPA Infrastructure VDR open, DEPA Commercial data soon

A virtual data room has just been opened for the six bidding teams preparing to make second-round offers in the privatization of gas company DEPA Infrastracture, an offshoot of gas utility DEPA.

Czech company EPH, Italy’s Italgas, the Australian investment funds First State Investments and Macquarie, US firm KKR and China’s Sino-CEEF & Shanghai Dazhong Public Utilities now have access to all relevant data concerning the DEPA Infrastructure sale.

Another VDR is expected to be opened within the next few days for bidders participating in the privatization of DEPA Commercial, DEPA’s other entity up for sale.

The participants in this sale, seven entries in total, are: Motor Oil Hellas-PPC, ELPE-Edison, Mytilineos, GEK-TERNA, the Copelouzos group, Dutch company Shell and the Swiss-based MET Group.

VDR information for the DEPA Commercial sale will be made available over three phases as a protective measure intended to ensure competition. The first phase, offering non-sensitive data, will be open for all. Access to VDR information during the second stage, offering sensitive data, will be restricted to consultants. Bidders will be offered conditional access to confidential information in the third phase.

Greece’s privatization fund TAIPED is aiming to declare preferred bidders for both sales in the final quarter of this year. Market officials, however, believe this is more likely to occur in the first quarter of 2021.

DEPA Commercial bidders are allowed to team up and establish consortiums but partnerships for the DEPA Infrastructure sale are not permitted.

Bidders participating in the DEPA Commercial sale are mainly eyeing the company’s prized asset, retail gas supplier and subsidiary Fysiko Aerio Attikis, covering the wider Athens area. This company already serves close to 400,000 households and 10,000 businesses.

PPC Renewables OKs terms for Motor Oil joint venture, a 100-MW wind farm

The board at PPC Renewables has approved the fundamental terms of a prospective agreement with Motor Oil for the development and construction of a 100-MW wind farm on one of the Greek islands, still unspecified, energypress sources have informed.

On another front, PPC Renewables yesterday announced a tender for the construction of a 50-MW solar energy complex project in Megalopoli, Peloponnese, whose budget is estimated at 30.7 million euros, not including VAT.

The winning bidder, to be selected through an online auction scheduled for September 30, will be tasked with the Megalopoli project’s design, procurement, transportation of materials and installation of the project’s two parks and substation.

The Megalopoli project will be comprised of two solar energy parks, one with an 11-MW capacity, the other 39 MW.

The project’s 11-MW section recently secured a tariff of 49.11 euros per MWh at an auction staged by RAE, the Regulatory Authority for Energy. The 39-MW section will operate within the target model’s framework, through two-way power purchase agreements with power utility PPC, PPC Renewables’ parent company.

Meanwhile, preliminary procedures are progressing rapidly for the development of another PPC Renewables-PPC solar energy project, in northern Greece’s Ptolemaida region, until now a lignite-dependent local economy. This project’s planned capacity, 230 MW, makes it one of Europe’s biggest solar energy projects. The project promises to play an important role in Greece’s decarbonization effort.

Work began last month on two smaller 15-MW units to represent part of the overall 230-MW project. Work on the main 200-MW section is expected to commence in January.

Over 300 jobs are expected to be created for the Ptolemaida project’s construction needs, offering vital support for the local economy.

DEPA Commerce sale may change gas, electricity markets

Ongoing procedures in the sale of DEPA Commerce could serve as a catalyst for major changes in the retail gas and electricity markets, leaving fewer players in these markets.

Challenges of the new era, from electromobility to renewable energy, are expected to soon lead to the establishment of various energy-sector mergers and partnerships in Greece.

Talks between company officials for potential partnerships have proliferated since seven consortiums were confirmed as the qualifiers through to the second and final round in the sale of gas utility DEPA’s commercial division.

Hellenic Petroleum (ELPE) chief executive Andreas Siamisiis, during a press conference yesterday, left open the prospect of an entry by an additional partner into the consortium formed by ELPE and Italy’s Edison. This consortium is among the sale’s seven qualifiers.

Such a development could even influence the line-up of electricity supplier Elpedison, a joint venture formed by ELPE and Edison for Greece’s retail market, Siamisiis admitted.

It is believed that fellow qualifiers Motor Oil and Greek power utility PPC, who also joined forces for the DEPA Commerce sale, are moving to expand their consortium for this sale.

Highlight the importance of the DEPA Commerce sale, and its potential to lead to sweeping changes, six major Greek energy companies are involved in the DEPA Commerce sale, a record level of interest for any local energy-market sale in recent years.

Besides the three aforementioned Greek players, Mytilineos, GEK-TERNA and Copelouzos are also vying for DEPA Commerce.

Electricity producers are the market’s biggest gas consumers, which entwines the interests of gas and electricity players.

Electromobility creating various opportunities, players preparing

Besides the auto industry and recharging network investments, the country’s push towards electromobility, strongly supported by a draft bill delivered by the government yesterday for consultation, is also creating various other new business opportunities.

Enterprises active in battery and recharging technology, spare parts for electric cars and e-bikes, for example, can expect production opportunities.

Business opportunities are emerging for electricity companies, fuel companies, network owners and operators, recharging technology manufacturers and technology firms.

The government’s draft bill includes provisions enabling fuel stations, shopping centers, super markets, parking lots, as well as municipalities and prefectures to install recharging stations. An extensive, widely accessible recharging network will be pivotal to the country’s overall electromobility effort.

The draft bill also includes a provision for the establishment of electric vehicle charging operators, expected to primarily develop their own recharging stations, at locations either owned by them or prospective partners.

The operators will also be able to collaborate with shopping centers, super markets, municipalities and any other entities wanting to install recharging stations but lacking the size or interest to get too involved with more complex procedures.

Hellenic Petroleum (ELPE) has already announced the establishment of a subsidiary to focus on the energy group’s electromobility interests. Also, Motor Oil has taken its first steps, mainly through NRG, the group’s supply firm.

Both these major energy groups have already installed some recharging stations along highways and at other points. All major fuel companies plan to follow suit.

The country’s major independent electricity suppliers, Heron, Elpedison and Protergia, plus smaller players, have all incorporated electromobility into their strategic plans.

Power utility PPC, aspiring to dominate this sector, has already announced three MoUs, with the AB Vasilopoulos supermarket chain, Beat taxi service, and airport operator Fraport Greece. PPC aims to have installed 1,000 recharging stations around Greece over the next two to three years.

Some electricity suppliers have formed partnerships with car industries. Elpedison has teamed up with Mercedes Benz Hellas, Motor Oil’s NRG with BMW, and Protergia with Kosmocar-Volkswagen.

 

Six Greek heavyweights among DEPA Commercial contenders

Six major Greek energy market players are among the contenders through to the second round of the DEPA Commercial sale, the biggest domestic turnout for an energy-sector tender in recent years, highlighting the gas market’s significance and prospects over the next decade.

The country’s energy transition plan is aiming for zero emissions by 2030.

Hellenic Petroleum (ELPE), joined by Italian partner Edison, a Motor Oil and power utility PPC partnership, Mytilineos, Gek-Terna and the Copelouzos group are the six Greek contenders, among a list of seven bidding teams shortlisted for the DEPA Commercial sale’s final round, entailing binding bids.

Gas utility DEPA, from which DEPA Commercial has been established for the utility’s privatization, may have lost its monopoly in the natural gas market, but its assets and market share promise the new owner a leading position during Greece’s decade of decarbonization, electric vehicle market growth and drastic reduction in fuel consumption.

As a result, fierce bidding for DEPA Commercial is expected.

The company’s acquisition will provide the new owner with a portfolio of 350,000 customers plus DEPA Commercial’s international supply contracts with Russia’s Gazprom, supplying pipeline gas to the Greek company for years; Algeria’s Sonatrach, supplying LNG; and Turkey’s Botas.

Gas quantities from Azerbaijan have also been reserved by DEPA Commercial via the imminent TAP route.

 

 

 

Seven bidders through to DEPA Commercial sale’s final round

The Board of Directors of the Hellenic Republic Asset Development Fund (HRADF), during today’s meeting decided, that seven interested parties meet the criteria to participate in Phase B (Binding Offers Phase) of the tender process for the acquisition of 65% of the share capital of DEPA Commercial (Trade) S.A., with an option of acquiring the total of its issued share capital by virtue of a Memorandum of Understanding (MoU) between DEPA S.A. shareholders, HRADF and Hellenic Petroleum S.A. (HELPE), the development fund has announced in a statement.

The prequalified interested parties to participate in Phase B of the tender are (in alphabetical order):

  1. C. G. GAS LIMITED
  2. Consortium HELLENIC PETROLEUM SA & EDISON INTERNATIONAL HOLDING N.V
  3. Consortium MOTOR OIL HELLAS CORINTH REFINERIES SA & PPC SA
  4. GEK TERNA SA
  5. MET HOLDING AG
  6. MYTILINEOS SA
  7. SHELL GAS BV

Following the signing of the relevant Confidentiality Agreement, the prequalified interested parties will receive the documents of Phase B (Binding Offers Phase) and will grant access to the virtual data room (VDR), where data and information related to DEPA Commercial S.A. are uploaded, the statement added.

 

 

 

 

DEPA Trade sale short list this month, sooner than expected

Privatization fund TAIPED is expected to announce its short list of final-round qualifiers in a tender offering a stake of at least 65 percent, possibly even 100 percent, of DEPA Trade – a new entity formed by gas utility DEPA as part of its privatization – within the next few weeks, far sooner than expected.

Deteriorated international investment conditions have prompted fears of a slower sale procedure.

The privatization fund, now close to finalizing its appraisals of nine first-round bids, has requested clarification from participants.

The DEPA Trade privatization was expected to drag well behind that of DEPA Infrastructure, seen as a lower-risk sale effort offering investors regulated earnings, but the two privatization efforts now appear likely to move ahead almost concurrently, or a few weeks apart.

A list of six final-round qualifiers in the DEPA Infrastructure sale was announced a week ago. Authorities are aiming to complete this sale towards the end of the year.

As for DEPA Trade, this entity promises the winning bidder an immediate advantage in Greece’s natural gas market as more than 200,000 customers around the country will be gained.

DEPA Trade’s wholesale gas trading activity is another appealing factor, despite the fact that it shrunk to 40 percent of the market’s total last year, as the growing southeast European market offers huge potential.

DEPA Trade’s nine first-round bidders are: C.G GAS LIMITED; MET HOLDING AG; POWER GLOBE LLC; SHELL GAS B.V.; VITOL HOLDING B.V.; GEK TERNA; HELLENIC PETROLEUM (ELPE) & EDISON INTERNATIONAL HOLDING N.V. consortium; MOTOR OIL HELLAS & GREEK POWER UTILITY PPC (consortium); MYTILINEOS.

 

Petroleum sector rebounding, Motor Oil deputy tells

The petroleum market is now rebounding, a trend reflected by rising sales figures in May, Motor Oil’s deputy chief executive Petros Tzannetakis has told analysts during a virtual conference.

The official, responding to a related question, expressed cautious optimism for the petroleum sector’s performance this coming summer.

“Greece’s successful management of the pandemic can attract tourists. The borders have been opened and, at the same time, demand for gasoline is rising. I am cautiously optimistic,” Tzannetakis said.

It is currently not possible to make predictions on aviation fuel demand, he noted.

Motor Oil proved to be durable and resilient amid the pandemic’s unprecedented demand and price collapse for petroleum products, the deputy chief noted. The  corporate group’s major debt reduction and high-level liquidity played a key role, he pointed out.

Record sales figures in preceding years contributed to the corporate group’s resilience during the lockdown period, he explained.

Authorities, market players to discuss LNG terminal’s slot reservation rules

The latest developments of a plan aiming to revise slot reservation rules at gas grid operator DESFA’s LNG terminal on the islet Revythoussa just off Athens will be discussed between authorities and market players at a one-day conference planned by RAE, the Regulatory Authority for Energy, for this Thursday.

A latest proposal delivered by DESFA to RAE as part of consultation will serve as the basis of the discussion.

The new slot-reservation formula being worked on for the Revythoussa terminal will aim to maximize LNG shipments to the facility while also restricting time slots registrations made by traders purely for the sake of protecting gas market shares.

Power utility PPC and Motor Oil were both left off the Revythoussa facility’s unloading plan for 2020 after failing to secure slots amid conditions of heightened demand.

Authorities want to avoid a repeat of such a situation. PPC and Motor Oil had used the LNG terminal a year earlier.

Participants at this Thursday’s event will be offered the opportunity to present observations before Revythoussa rules are revised and implemented for next winter.

The event should offer LNG importers a clearer indication of the terminal’s new rules before ordering plans for 2021 are pursued. As has been the case this year, LNG demand is also expected to be elevated in 2021.

Revythoussa at full capacity in May, 10 LNG orders scheduled

A total of nine LNG shipments are scheduled to be delivered to the Revythoussa islet terminal just off Athens in May, taking the facility to full capacity for yet another month, data provided by gas grid operator DESFA has shown.

Three LNG tankers are scheduled to bring in three big orders for a total of ten recipients in May.

The inflow has already begun. Last week, the Maran Gas Ulysses, a tanker belonging to the Aggelikousis group, imported 149,254 cubic meters for four buyers, Motor Oil, Heron, gas utility DEPA and Mytilineos, whose share, 74,627 cubic meters, was the biggest.

The next shipment, scheduled to be delivered to the Revythoussa terminal on May 20 by the Gaslog tanker belonging to the Livanos group, will deliver 147,710 cubic meters of LNG for Elpedison and power utility PPC, taking the bigger share of the two buyers, 127,031 cubic meters.

A third and final LNG shipment for the month is scheduled to arrive May 31 on the British Saphire tanker, owned by BP. This vessel will bring in 121,123 cubic meters of LNG for DEPA and Elpedison, the bigger of the two buyers with a 64,993 cubic-meter order.

A total of five big LNG shipments are expected in June for orders placed by Mytilineos, Elpedison and DEPA.

Motor Oil, PPC Renewables in talks for major wind energy park

Talks between PPC Renewables and the Motor Oil Hellas group for joint development, installation and operation of an island-based wind energy farm with a capacity of approximately 100 MW have reached an advanced stage, sources have informed.

The project’s feasibility, however, will depend on the development of a grid interconnection with the mainland system.

PPC Renewables and Motor Oil are currently examining details concerning the prospective wind farm’s sustainability, interconnection and financing. Once they have reached conclusions, the two sides will decide on whether to proceed with the project.

PPC Renewables and Motor Oil have already joined forces to express first-round interest in a tender offering a stake in DEPA Trade, a new entity established by gas utility DEPA.

PPC Renewables has set as a strategic objective the formation of partnerships with domestic and foreign players for new projects not included in the existing portfolio of parent company PPC, the power utility. PPC Renewables intends to develop these new projects without involvement by PPC.

The company’s wind energy park plan with Motor Oil could serve as a base for more projects involving the two sides.

PPC Renewables has already planned a series of collaborations with foreign partners, including Germany’s RWE, UAE group Masdar Taaleri Generation  D.O.O. (MTG), as well as EDP Renoveis, a Portuguese company with a Chinese main shareholder. PPC Renewables is striving to have developed RES projects with a total capacity of 1.5 GW by 2024.

Motor Oil has made clear its plan to broaden its portfolio with emphasis on green energy. The refining group wants to establish a solid presence in the renewable energy market through acquisitions and partnerships.

Motor Oil has already completed two acquisitions, a wind-energy purchase from Stefaner and a solar energy project acquisition from Metka EGN, a member of the Mytilineos group.

 

DEPA Trade sale’s PPC-Motor Oil union, Shell return surprise

The privatization of DEPA Trade – a new entity established by gas utility DEPA – offering the Greek State’s 65 percent stake in a procedure whose deadline for first-round offers expired yesterday, produced two surprises. Firstly, Shell reemerged in the country’s gas market following a withdrawal less than two years ago. Secondly, in an unanticipated move, power utility PPC teamed up with Motor Oil for a joint bid.

Shell departed from the Greek natural gas market in July, 2018 by selling its 49 percent stakes in gas supplier EPA Attiki and gas distributor EDA Attiki, both covering the wider Athens region, to DEPA.

Shell received a total of 150 million euros, 39 million for its 49 percent stake in EPA Attiki and 111 million euros for its 49 percent stake in EDA Attiki.

The company’s reemergence can be primarily attributed to an interest in DEPA’s long-term contracts with Gazprom, Sonatrach and Botas, with an eye on the wider Balkan and southeast European regions, sources said.

PPC and Motor Oil decided to join forces for the DEPA Trade sale as a result of the failure of both to secure slots for 2020 at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens. PPC holds a 30 percent stake in its partnership with Motor Oil, sources informed.

Following its Revythoussa failure, PPC has been more aggressive in a market test for the Alexandroupoli FSRU, expiring today. PPC wants to secure a capacity at this prospective unit in the country’s northeast as the company is determined to have LNG access. A successful bid in the DEPA Trade sale would bolster this position.

Hellenic Petroleum (ELPE) and Edison did not submit a joint bid for DEPA Trade through Elpedison, their joint venture for Greece’s retail energy market, as had been speculated. Instead, they are believed to have made separate bids. The two had not shaped a common action plan in the event of a successful DEPA Trade bid, sources said. However, the establishment of a new joint venture by the two firms at a latter stage, specifically for DEPA Trade, cannot be ruled out.

The country’s planned privatizations, including DEPA Trade, face likely delays as a result of the coronavirus pandemic’s repercussions. The progress of these sales will depend on the course of the pandemic.

DEPA Trade’s first-round bidders forwarded their offers on-line and must follow up with deliveries of official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

DEPA Trade offers due today, at least 7 players interested

Five Greek and two international investment groups are expected to submit bids for the DEPA Trade privatization, whose first-round deadline expires today at 5pm.

DEPA Trade was established as a new gas utility DEPA entity for the privatization, offering the Greek State’s 65 percent stake.

Bidders may also submit their expressions of interest online, via email, as a result of restrictive measures prompted by the coronavirus crisis, but will need to follow-up with official documents by April 24. The evaluation of first-round offers is not expected to begin any sooner than April 25.

The local bidders expected to submits bids, all leading energy players, are Mytilineos, GEK Terna, Motor Oil, Hellenic Petroleum (ELPE) and the Copelouzos group.

ELPE plans to submit a joint bid in partnership with Edison, possibly through Elpedison, their joint venture for Greece’s retail energy market, sources informed.

The Copelouzos group is also working on delivering a joint offer, with Czech firm KKCG.

Shell is among the foreign companies looking interested, despite its sale, two years ago, of stakes in DEPA gas supply and distribution companies.

Dutch firm Vitol is the other foreign player believed to have been drawn to the DEPA Trade sale. Vitol had reached the final stage of an ELPE sale with Algeria’s Sonatrach as a bidding partner, but the pair ended up not submitting a binding offer.

Expressions of interest in DEPA Trade may also come from Swiss-based Hungarian firm Met Energy Holding, active in natural gas wholesale trade. This firm is already present in Hungary, Croatia, Italy, Serbia, Slovakia, Spain, Turkey and Ukraine. Qatar’s Power Global is another possibility.

DEPA Trade’s portfolio includes 409,000 customers – households and businesses.

 

Crisis impacting energy sub-sectors in different ways

Energy companies are not being impacted in a universal way by the impact of the coronavirus pandemic, its effects varying from one sub-sector to another, as was made clear during conference-call presentations of 2019 financial results by two different types of firms, Motor Oil, active in refining and fuel trade, and Mytilineos, whose interests include energy production and supply.

Motor Oil needs to counter lower international oil prices, lowered by the coronavirus outbreak combined with a price war between Russia and Saudi Arabia. Oil prices may have fallen but fuel demand is expected to slide further as stricter coronavirus stay-at-home orders are enforced.

The main challenge for Motor Oil is to maintain liquidity at levels ensuring sustainability.

As for the corporate group Mytilineos, represented by Protergia in the retail energy market, it has yet to experience a drop in electricity demand. Italy, hardest-hit by the coronavirus in Europe, has seen electricity demand drop by 7 percent.

The significant decline in natural gas prices is expected to offer Mytilineos purchase cost savings of about 99 million euros over a one-year period.

The group is continuing its development of a new gas-fueled power plant.

Despite the crisis, the Mytilineos group aims to continue operating its units at full capacity and utilize the availability of low-cost fuel.

Fuel price plunge pressuring refineries, opportunities seen

The plunge of international crude oil prices is impacting Greek refineries and local fuel trade, while, worse still, market forecasts are impossible to make, even for the short term.

Hellenic Petroleum (ELPE) and Motor Oil, Greece’s two refinery groups, are being tested by the fall of Brent prices to levels of around 30 dollars per barrel. Highlighting this challenge, unleaded 95 octane fuel prices have dropped to less than 1,000 euros per cubic meter (including surcharges before VAT) for the first time in many years.

This represents a drop of more than 100 euros compared to prices on March 9, dubbed “Black Monday” as it was the worst day in markets since the financial crisis, a result of the outbreak of the oil price and output level war between Russia and Saudi Arabia, along with the coronavirus spread’s impact on demand.

The drop in prices is seen continuing. Domestic fuel demand is falling as a result of the Greek government’s broadened enforcement of restrictive measures aiming to contain the coronavirus spread. Local transportation needs have subsequently dropped dramatically, while the only other viable option left for Greek refineries, exports, has been canceled out by plunging fuel demand internationally. Borders have closed and airlines are limiting flights.

The cost of fuel stocks, purchased at far higher prices, is a big concern for both ELPE and Motor Oil. This cost, however, can be partially offset by opportunities currently available for lower-cost production.

On a more positive note, both refineries reduced their loan servicing costs prior to the crisis. This is particularly so for ELPE as the petroleum group was pressured by high borrowing costs. Motor Oil has traditionally pursued a more conservative borrowing policy.

Both refineries will need to take extremely cautious steps amid these highly unpredictable market conditions, analysts agree.

Energy sector transactions forecast to grow in 2020

Energy sector acquisitions and mergers are expected to represent an increased share of overall transactions this year, according to officials at professional services multinational PwC.

The combined effect of a European turn towards investments for green energy growth and Greece’s decarbonization plan is focusing Greek investment interest on the renewable energy sector, PwC officials pointed out during a presentation of an annual report.

Hellenic Petroleum ELPE’s recent decision to purchase an unfinished 204-MW solar energy park from Germany’s Juwi for 130 million euros, as well as petroleum group Motor Oil’s move to acquire a 47-MW RES project from Mytilineos for 45.8 million euros were highlighted as signs of things to come.

PwC officials also confirmed the interest of major foreign funds for RES investment opportunities in Greece, as was disclosed by energypress earlier this week.

Gas utility DEPA’s privatization of DEPA Infrastructure, a new company entity, will be completed this year, while nine prospective bidders, in the procedure’s preliminary stage, have already emerged to express official interest, PwC officials pointed out.

In 2019, Greece’s energy sector represented 5.8 percent of the country’s total number of takeovers and mergers, transactions worth a total of 4.3 billion euros.

 

Motor Oil makes second renewable energy investment in 3 months

Petroleum group Motor Oil, making gradual, carefully considered and targeted adjustments to meet demands of the renewable energy era, has added 47 MW to its RES portfolio through the acquisition of shares in two companies, Radiant Solar Holdings and Greensol Holdings, at a total cost of 45.8 million euros, the group’s second RES sector initiative in three months.

These stakes were previously held by METKA EGN, a member of the Mytilineos group.

Motor Oil’s move into the RES market will not feature the same traits and coverage of other refining and energy sector companies, officials at the corporate group have informed. However, Motor Oil officials see diversification as necessary for a reduction of the group’s carbon footprint.

The group also plans to develop solar energy parks at its refining units as an energy-saving initiative.

Last October, Motor Oil acquired an 85 percent stake of Stefaner Energy, holding three wind energy production licenses with a total capacity of 9.4 MW.

Rising LNG imports reshaping gas market, led by Mytilineos

The drastic reduction of LNG price levels in recent times has not only boosted the amount of LNG imports into Greece but also reshaped market shares held by domestic gas traders.

Last year, natural gas consumption rose to a new record level of more than 60 TWh, up from 52.4 TWh in 2018 and 53.7 TWh in 2017.

LNG imports rose sharply to 30.92 TWh in 2019 from 11.59 TWh in 2018 and 15.54 TWh in 2017.

Overall gas consumption increased by approximately 15 percent last year while LNG import levels nearly tripled compared to two years earlier.

For the first time ever, LNG represented half of the country’s total gas consumption in 2019.

In 2019, a total of six traders imported LNG to the Revythoussa terminal, close to Athens, some of these for the first time.

Mytilineos made the most LNG shipments for a 50.2 percent share. Gas utility DEPA followed with a 26.1 percent. Elpedison was next with a 12.4 percent market share, trailed by power utility PPC (7.6%), Heron (2.4%) and Motor Oil (0.4%).

Market leader Mytilineos imported a total of ten LNG shipments to the Revythoussa terminal in 2019, some of these originating from the US, via Shell and BP, managing US shale gas exports.

A total of six LNG shipments to Greece in 2019 carried American shale gas. This trend is continuing this year. A 140,000 cubic-meter shipment of American LNG arrived at the Revythoussa terminal on January 25.

Mytilineos also chartered large-scale Q Flex tankers to Revythoussa in 2019, a development enabled by the completion of upgrade work at the LNG facility.

The Q Flex tankers, built in Qatar and offering a 201,000 cubic-meter capacity, were previously unable to approach the Greek terminal.

 

Improved Gazprom deal raises DEPA in the eyes of investors

Lower-price deals sealed or about to be sealed between gas utility DEPA and its international suppliers are among the factors the government is relying on for a successful privatization procedure of the gas utility, a procedure launched yesterday, beginning with DEPA Trade, one of DEPA’s two new entities formed for the sale.

DEPA is believed to have renegotiated a far more favorable supply deal with Russia’s Gazprom, the Greek utility’s biggest supplier.

Forty percent of DEPA’s natural gas orders from Gazprom will no longer be pegged to fluctuating international oil prices. Instead, this percentage of DEPA’s Gazprom orders will be linked to price levels of Dutch gas trading platform TTF, one of Europe’s biggest hubs. Just days ago, prices at TTF were about half those of pipeline gas. The other 60 percent of DEPA’s orders with Gazprom will remain oil indexed.

This development promises to make DEPA’s supply deals with Gazprom far more competitive. Prospective bidders already appear to be warming to the prospect.

Major Greek corporate groups such as Mytilineos, Hellenic Petroleum (ELPE) – already holding a 35 percent stake in DEPA and considering teaming up with its Elpedison partner Edison for the DEPA sale – GEK Terna and Motor Oil are believed to be gearing up for bids. The Copelouzos group’s involvement in the DEPA Trade sale is considered certain – in a partnership with Czech entrepreneur Karel Komarek, holding a key stake in Greek lottery OPAP.

RAE to change LNG terminal rules following congestion

RAE, the Regulatory Authority for Energy, has decided to shape a new regulatory framework for gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, attributing recent congestion problems at the unit that have left companies without slots for 2020 to an outdated legal framework from 2011 no longer serving new market needs, energypress sources have informed.

The authority is expecting proposals from DESFA before it starts shaping a new regulatory framework for the LNG terminal. The new framework, whose details remain unknown, will not apply in 2020 but is planned for 2021.

Lawmakers behind the set of rules shaped nearly a decade ago viewed LNG as a supplementary fuel, but it has taken on a far more significant role in the Greek energy market over the past few years, the sources noted.

Stronger LNG demand expressed by major-scale consumers and energy groups has been driven by increased global LNG output and significantly lower prices compared to pipeline gas.

Companies left without slots on DESFA’s finalized unloading plan for 2020, just announced, will eventually secure places during the year as other qualifiers have overstated their slot requirements and will make resulting vacant capacities available, the sources said.

According to the finalized unloading plan, the Mytilineos group will import a total of 22 LNG shipments in 2020, beginning January 1, Elpedison has planned an equivalent number of shipments, gas utility DEPA has scheduled 14, including Algerian contracts, while Heron has scheduled five shipments.

Power utility PPC and Motor Oil Hellas, both importing LNG shipments through the Revythoussa terminal in 2019, have been left out.

 

No changes to LNG unloading plan for 2020, PPC, Motor Oil both miss out

Gas grid operator DESFA has announced a finalized unloading plan for 2020 at the Revythoussa LNG terminal without any changes to a temporary plan as participating players did not make any revisions to their initial requests for slots.

According to the finalized unloading plan, the Mytilineos group will import a total of 22 LNG shipments in 2020, beginning January 1, Elpedison has planned an equivalent number of shipments, gas utility DEPA has scheduled 14, including Algerian contracts, while Heron has scheduled five shipments.

Power utility PPC and Motor Oil Hellas, both importing LNG shipments through the Revythoussa terminal in 2019, have been left out of the facility’s unloading plan for 2020 as they failed to secure slots. Both companies have reacted firmly.

Players requesting bigger capacities are given priority, according to a DESFA formula, which remained largely unchanged, except for one revision, introducing tougher penalties for importers should they cancel capacity reservations.