North Macedonia

Greek-North Macedonian gas pipeline decisions imminent

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Greek gas grid operator DESFA and its North Macedonian counterpart NOMA Gas are believed to be nearing respective investment decisions for the construction of a natural gas pipeline linking the neighboring countries.

Company officials have been meeting more frequently of late, their most recent session held in Skopje for talks on how to better coordinate funding efforts for the gas pipeline project and to move ahead with tenders concerning its procurement and construction.

DESFA, sources informed, is expected to reach an investment decision by the end of summer, or early September, for the Greek segment of the gas pipeline project, a 55-km stretch starting from Nea Mesimvria in the country’s north.

The Greek gas grid operator is also preparing for tenders concerning pipeline procurement and the project’s construction.

This gas pipeline project promises to diversify the gas supply sources of North Macedonia, currently entirely dependent on its Bulgarian interconnection, experiencing congestion. It will also offer new gas supply routes to the western Balkans.

Greek-US energy agenda focused on 3 projects

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Three energy infrastructure projects, the Alexandroupoli FSRU in Greece’s northeast, an oil pipeline running from the Alexandroupoli port to Burgas, on Bulgaria’s Black Sea coast, and a Greek-Egyptian grid interconnection, were focal points in talks yesterday between Greek and American officials, as part of US Secretary of State Anthony Blinken’s official visit to Athens.

The two sides, meeting for the 4th round of a Greece-US Strategic Dialogue, appeared determined to push ahead with the three projects, propelled by Russia’s war on Ukraine, which has prompted Europe to move in a direction ending its reliance on Russian fossil fuels.

It was agreed that Athens and investors need to accelerate efforts for the aforementioned projects to further marginalize Russian energy supply to Europe.

Besides offering full support for the three energy infrastructure projects, US officials also expressed satisfaction about the recent launch of the Greek-Bulgarian IGB gas pipeline as well as ongoing plans for a pipeline to run from Greece to North Macedonia.

However, the US officials kept a distance from the discovery of gas deposits by Israel, Cyprus and Egypt in the east Mediterranean, as well as the East Med gas pipeline plan – which would connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline – presumably to avoid upsetting Turkey, despite problems that have weighed down US-Turkish ties of late.

 

Greek-Italian grid link repair work subduing power prices

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The Greek-Italian grid interconnection’s temporary disruption for repair work is offering partial protection against wholesale electricity price increases in Greece.

The temporary-closure period for the grid interconnection, which has been sidelined towards both directions since August 19, has just been extended until September 3 following a request made by Italy’s power grid operator Terna, according to an announcement made by IPTO, Greece’s power grid operator.

Last Friday and Saturday, the wholesale electricity price was 300 euros per MWh higher in Italy compared to Greece.

Under normal conditions, price differences between neighboring markets prompts electricity export activity towards the lower-priced country.

Greek electricity exports were considerable in July, reaching 500 GWh, data provided by IPTO showed. Of this total, 351 GWh was exported to Italy, 253 GWh to Albania, 184 GWh to North Macedonia and 90 GWh to Bulgaria.

Electricity export figures will be subdued in August as a result of the disruption of the Greek-Italian grid interconnection. The link has been closed down for repairs on numerous occasions in recent years.

 

 

Energy ministry officials in Sofia for EU’s first regional energy platform

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A first regional taskforce for cooperation between EU member states on energy matters, as part of the EU’s Energy Purchase Platform, is scheduled to meet in Sofia tomorrow, as announced earlier this week by European Commissioner for Energy Kadri Simson.

The regional taskforce will concentrate on the year ahead and provide specific regional expertise and know-how to develop and implement the REPowerEU action plan to reduce dependency on Russian fossil fuels, fill storage ahead of next winter and further accelerate the decarbonization of the energy sector.

This meeting comes following Russia’s recent decision to disrupt natural gas supply to Bulgaria as well as Poland.

The Bulgarian government has also organized a coinciding meeting of regional ministers. Greece’s energy minister Kostas Skrekas (photo) and the ministry’s secretary-general Alexandra Sdoukou will participate.

The two Greek government officials will be visiting Sofia on the heels of yesterday’s official launch of work on the Alexandroupoli FSRU, an LNG terminal project intended to diversify the energy sources of Greece and the wider region. Yesterday’s official ceremony was attended by heads of state representing Greece, Bulgaria, North Macedonia and Serbia.

During their visit to Sofia, the Greek energy ministry’s two officials are also expected to take part in a bilateral meeting with Bulgarian energy minister Alexander Nikolov.

This session’s agenda will examine the progress of the IGB gas pipeline, set to be completed and launched in July, and an electricity grid interconnection upgrade between the two countries, whose completion is expected by the end of this year.

The IGB gas pipeline, promising to contribute to the EU’s effort for drastically reduced dependency on Russian energy sources, will offer a second interconnection between Greece and Bulgaria, in addition to the nearby Sidirokastro link.

 

 

Alexandroupoli FSRU development launch today, pivotal project

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

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

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

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

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

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

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

 

Gastrade decides on additional Alexandroupoli FSRU by 2025

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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 planned for Greece’s northeast, has reached a decision to also install an additional FSRU unit at the location, expected to be completed in 2025, as a follow-up to the first terminal, set for completion in 2023.

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

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

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

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

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

DESFA market test for North Macedonia gas pipeline link in March

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A DESFA gas grid operator market test for a gas pipeline project to link the Greek and North Macedonian systems is set to begin following the launch, by the Regulatory Authority for Energy (RAE), of a related public consultation procedure, ending February 7, the authority has announced.

The project’s market test will follow and is expected to be launched by March, the latest.

Towards the end of 2021, DESFA signed a 25 million-euro loan agreement with the European Investment Bank for the project’s Greek segment. This loan had been approved by the EIB more than a year earlier, in August, 2020.

At the time its approval was announced, EIB noted the project promises to further optimize Greece’s gas grid and also promote supply security and competition in the neighboring country through gas source and route diversification.

The project’s Greek segment, budgeted at 67 million euros, is planned to run from Nea Mesimvria, on the western outskirts of Thessaloniki, to the Evzoni area on the northern border.

Late in December, the EIB also approved a 28.9 million-euro loan agreement for the project’s North Macedonian segment. An agreement for this loan is expected to be signed within the next few weeks.

The EIB has also extended a 12.4 million-euro loan to North Macedonia from the Western Balkans Investment Framework (WBIF) for technical support and development of the project.

The gas pipeline, whose overall cost is estimated at 110 million euros, is planned to cover a total of 123 kilometers.

 

 

ELPE upbeat on relaunch of Thessaloniki-Skopje oil pipeline

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Hellenic Petroleum ELPE has acknowledged the governments of Greece and North Macedonia are working intensely for the reopening of an oil pipeline linking the petroleum group’s Thessaloniki refinery with its Okta subsidiary refinery in the neighboring country’s capital, Skopje, estimating the pipeline will reopen in the first quarter of 2022.

The pipeline has remained closed since 2016. ELPE has already proceeded with necessary maintenance work to protect the pipeline from internal corrosion and ensure it will be ready to operate once administrative and bureaucratic procedures have been completed.

A report published by ELPET Valkaniki, a fully owned ELPE subsidiary for Balkan markets, noted that OKTA stopped processing crude oil early in 2013 for business reasons after deciding to operate commercially with imports of finished products, a move that kept the pipeline inactive.

 

North Macedonia hydropower plant offers in September, PPC-Archirodon set

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Power utility PPC and energy and construction firm Archirodon, in a partnership for North Macedonia’s prospective Cebren hydropower plant, at the Crna Reka river, face a mid-September deadline for binding bids.

The neighboring country’s state-owned power producer ESM, staging the tender, aims to have announced a preferred bidder by the end of the year.

The Cebren facility, planned to offer a capacity of between 333 and 458 MW and annual production of between 1,000 and 1,200 GWh, is expected to cost approximately 600 million euros.

The project is planned to be developed through a Public Private Partnership (PPP) with state-owned power producer ESM.

PPC and Archirodon are among nine of ten initial bidders who have qualified for the competition’s final round. The others are: ENKA-COLIN (Turkey); EDF (France); Cobra-Cobra Hidraulika (Spain); EVN-Verbund (Austria); Webuild SPA Italia-Salini (Italy); Gezhouba Group China (China); Power Construction Corporation of China (China); and Ozaltin-Yapi Merkezi (Turkey).

DESFA: NER North Macedonia pipeline agreement, market test next month

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Two further important steps in the lead-up to the construction of a natural gas pipeline linking the Greek and North Macedonian grids are expected to be made in September.

DESFA, Greece’s gas grid operator, and North Macedonia’s energy sources company NER are expected to sign an agreement next month as a follow-up to an agreement signed a month ago by the energy ministers of the two countries in Lagonisi, east of Athens.

The latest agreement will stipulate technical issues, as well as guarantees, concerning the new pipeline, paving the way for tenders concerning the project’s development.

In addition, also in September, DESFA and NER also plan to stage a market test that will determine the commercial feasibility of the project. The two sides want to ensure the existence of a sufficient number of buyers for gas quantities planned to be transported through the pipeline.

The Greek section of the gas pipeline, budgeted at 51.4 million euros, is planned to stretch 54 kilometers. The North Macedonian section will cover a 100-km distance.

A September 13 registration deadline has been set for a tender concerning the procurement of steel pipelines for the project. Also, a draft of the tender concerning the project’s construction has been forwarded for public consultation until August 16.

 

Damco Energy CCGT boost to 840 MW approved by RAE

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A plan by Damco Energy, a Copelouzos group subsidiary, to increase the capacity of its prospective natural gas-fired power station in Alexandroupoli, northeastern Greece, from 662 MW to 840 MW has been approved by RAE, the Regulatory Authority for Energy.

The energy company now needs to make an investment decision, expected within the summer, before work on the project commences, sources informed. Its licensing procedure has been completed.

According to the sources, ESM, North Macedonia’s state electricity company, set to acquire a 25 percent in the Alexandroupoli natural gas-fired power station, is now at the final of its preparations and is currently performing due diligence.

Damco Energy is one of a number of companies that have not only decided to develop natural gas-fired power stations but also to boost capacities of their respective projects to over 800 MW.

Mytilineos was the first to do so with its plan for an 826-MW combined cycle gas turbine (CCGT unit) in Agios Nikolaos, Viotia, northwest of Athens, a project already being developed.

Following suit, Elpedison upgraded a licensed natural gas-fired power station plan in Thessaloniki to 826 MW, while, just weeks ago, GEK Terna and Motor Oil also announced an upgrade for their natural gas-fired power station in Komotini, northeastern Greece, a joint venture, to 877 MW.

Power utility PPC has also announced a plan to convert its new lignite-fired power station, Ptolemaida V, to a natural gas unit, planned to ultimately offer a capacity of over 1,000 MW by 2025.

The prospective natural gas-fired power stations, totaling 4.3 GW, are planned to fill the capacity gap that will be left by PPC’s withdrawal of lignite-fired power stations, exiting as part of the country’s decarbonization effort.

These new gas-fired units are also expected to export electricity to Balkan countries through grid interconnections with neighboring markets.

DESFA pipeline agreement with North Macedonia’s MER in July

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Gas grid operator DESFA expects ongoing negotiations with North Macedonia’s energy sources company MER, for a cooperation agreement concerning the construction of a natural gas pipeline linking the two countries, will be successfully completed in July, enabling the staging of a market test for the project, whose Greek segment will run north from Thessaloniki’s Nea Mesimvria area.

DESFA plans to stage a market test for the pipeline in early autumn, assuming its cooperation agreement with MER is signed in July.

The cooperation agreement will commit both sides to the project’s construction, serving as a road map for its development and also specifying responsibilities to be taken on by DESFA and MER.

RAE, Greece’s Regulatory Authority for Energy, has set conditions, demanding a market test, and its successful outcome, in order to give the green light for construction of the Greek segment.

Apart from the cooperation agreement to be signed between DESFA and MER, the governments of Greece and North Macedonia plan to sign a corresponding bilateral agreement concerning the interconnection of the two countries through the project.

The details of this bilateral agreement are just about ready and have already been submitted to the European Commission for approval, Greek energy minister Kostas Skrekas told a recent conference.

Brussels’ approval is needed for North Macedonia to qualify for Western Balkans Investment Framework (WBIF) support funds for its segment of the gas pipeline.

The Greek segment, budgeted at 51.4 million euros, will cover a 57-km distance.

Mytilineos considering new gas-fired power units in Balkans

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The Mytilineos group is examining the prospect of developing natural gas-fired power stations in Bulgaria and North Macedonia, seeing investment opportunities, like Greece’s other major energy players, in the Balkan region.

EU members Bulgaria and Romania, as well as non-EU members in the Balkan region, such as Albania, North Macedonia and Serbia, are announcing closures of old coal-fired power stations.

This development is creating investment opportunities as older units being withdrawn will, over the next few years, need to be replaced by new facilities, including natural gas-fired power stations.

A month ago, after receiving equipment for a new gas-fired power station unit in Agios Nikolaos, Viotia, northwest of Athens, Mytilineos informed that the company is examining the prospect of developing a similar combined cycle unit in Bulgaria.

Bulgaria, like Greece, is withdrawing its coal-fired power stations and aims to have completed the country’s decarbonization effort by 2025. The neighboring country will need to replace lost capacity through the introduction of natural gas-fired power stations and RES unit investments.

Extremely higher carbon emission right costs have made the withdrawal of coal-fired power stations a priority for Bulgaria and the wider region, one of Europe’s most lignite-dependent areas.

Greece, Bulgaria and Romania, combined, represent nearly ten percent of the EU’s total lignite electricity generation capacity.

Carbon emission right prices relaxed to 49.26 euros per ton yesterday after peaking at 56.65 euros per ton last Friday, following a months-long rally.

Last week, during a meeting with Greek Prime Minister Kyriakos Mitsotakis, North Macedonian leader Zoran Zaev disclosed that his government is discussing the prospect of a new gas-fired power station, in the neighboring country, with Mytilineos.

In Romania, projections for 2030 estimate the installation of 5.2 GW in wind energy units and approximately 5 MW in solar energy units.

Serbia, possibly offering even bigger green energy investment opportunities, aims to replace 4.4 GW of coal-fired generation by 2050. The country is now making plans for 8-10 GW in RES investments.

North Macedonia energy business opportunities for local players

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Greek companies stand a great chance of gaining further presence in North Macedonia’s energy market through participation in projects and investments promising to contribute to the country’s diversification of energy sources and capture a bigger energy-mix share for green energy, the neighboring country’s Prime Minister Zoran Zaev made clear during comments in Athens yesterday.

North Macedonia appears determined to reduce its dependence on Russian fossil fuels and also cut back on carbon emissions, objectives offering investment opportunities for Greek energy groups, currently eyeing the neighboring market as part of plans to increase their business interests abroad.

The North Macedonian leader said yesterday that an agreement concerning the relaunch of Hellenic Petroleum ELPE’s Thessaloniki-Skopje oil pipeline is nearing finalization.

“The idea is to have reached an agreement with them by the end of May so that this important pipeline can begin operating,” Zaev remarked.

The oil pipeline’s reopening would be combined with the conversion of ELPE’s North Macedonian OKTA refinery into a petroleum products distribution hub covering the western Balkan region.

ELPE currently operates 27 petrol stations in North Macedonia through its OKTA subsidiary. Also active in Bulgaria, Serbia, Montenegro, the Greek petroleum group operates over 200 petrol stations in the wider region.

Zaev added that North Macedonia is involved in negotiations with a Greek company, presumed to be Mytilineos, for the development of a natural gas-fueled power station in the capital, Skopje. These talks, however, still appear to be at an early stage.

Also this week, Greek energy minister Kostas Skrekas told participants of the Delphi Economic Forum that a bilateral agreement for a Greek-North Macedonian gas pipeline interconnection is virtually ready and awaiting the approval of European authorities.

For North Macedonia, this gas pipeline project would end Russia’s monopoly in the country’s gas market, enabling more competitive gas prices and reinforced supply security, while for Greece, the gas pipeline’s development would represent a further step in the country’s objective to transform into a regional gas hub.

PPC eyeing Bulgaria, Romania, Serbia for RES investments

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Power utility PPC is looking to make its next major investment moves in the neighboring countries of Bulgaria, Romania and Serbia, solar energy and hydropower projects being a priority.

RES activity has soared in these three countries over recent years and is expected to continue.

PPC, which has not taken any investment initiatives abroad in quite a few years, anticipates it will be ready to announce details on major-scale solar farm projects in these countries towards the end of the year.

Bulgarian officials are making plans for 2.64 GW in new RES installations by 2030, of which 2.2 GW will concern solar farms, according to the country’s ten-year climate plan.

In Romania, the country’s 2030 projection is for investments reaching 5.2 GW in wind farm investments and approximately 5 GW in solar farms.

Serbia, possibly offering the biggest green energy investment opportunities among these three countries, will need between 8 and 10 GW in RES investments to replace coal-fired generation with a capacity of 4.4 GW by 2050, deputy energy minister Jovanka Atanackovic recently announced.

A first round of wind and solar project auctions is planned to take place in Serbia by the end of this year.

A month and a half ago, a partnership involving PPC and international contractor Archirodon advanced to the second round of a tender staged in North Macedonia for construction and operation of a major hydropower plant, Cebren, budgeted between 500 and 600 million euros and with a capacity between 333 and 458 MW.

PPC will continue to pursue this Cebren contract but its main focus will be on Bulgaria, Romania and Serbia and their solar energy project opportunities, sources informed.

 

 

EastMed alliance broadens, eight countries express support

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Support for the EastMed pipeline, planned to transport natural gas from offshore Levantine Basin gas reserves in the southeast Mediterranean to Greece and further into Europe, is growing in numbers with an initial Greek-Israeli-Cypriot alliance promoting this project now joined by five additional partners, Bulgaria, Romania, Hungary, Serbia and North Macedonia.

Energy ministers representing these eight countries forwarded a letter of support for the EastMed project to the European Commissioner for Energy Kadri Simson late last week, Greece’s energy and environment minister Kostas Skrekas has told local media.

The pipeline, to be developed by IGI Poseidon SA, a 50-50% joint venture between Greek gas utility DEPA and Italian gas utility Edison, is planned to cover a 1,470-km distance.

IGI Poseidon plans to develop EastMed all the way to Italy via Cyprus, Crete, the Peloponnese, mainland Greece and Epirus, the country’s northwestern flank.

This latest move, bringing the eight energy ministers together for the joint letter, was initiated by Skrekas, Greece’s energy minister, sources informed, following an initiative taken two months earlier by his Israeli counterpart Yuval Steinitz to organize a joint virtual conference involving ministers of all eight countries.

In their letter to Simson, the EU energy commissioner, the eight ministers highlight the importance of EastMed, noting the project promises to contribute to the wider region’s energy security and offer benefits to consumers as a result of increased competition and reduced natural gas price levels.

Regional gas interconnections, including the Greek-Bulgarian IGB, Bulgarian-Serbian IBS, Bulgarian-Romanian IBR and the Romanian-Hungarian IRH would be utilized to extend EastMed’s reach, the letter notes.

Greece and North Macedonia are currently planning a new gas pipeline interconnection whose Greek segment is being promoted by gas grid operator DESFA.

IPTO seeking active role in Cyprus, Israel, Egypt grid interconnections

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Power grid operator IPTO is seeking an active role in the grid interconnections to link Greece with Cyprus and Israel, as well as Egypt, the company’s chief executive Manos Manousakis told yesterday’s Power and Gas Supply Forum, an online event staged by energypress.

Responding to questions as to whether IPTO is considering to acquire an equity stake in these projects, Manousakis noted that the operator’s role is to ensure the interoperability of the Athens-Crete and Crete-Cyprus power grid interconnections, a commitment made by the Greek government back in October, 2019.

The European Commission, engaged in ongoing exchange with IPTO in an effort to understand the level of maturity of these grid interconnection projects and, primarily, the interoperability of its systems, has mentioned that Brussels would be interested in the equity involvement of a European TSO, Manousakis informed.

Other priorities at IPTO include upgrading and expanding Greece’s grid interconnections with neighboring countries, which would boost cash flow in the domestic energy market through electricity exports, the chief executive noted.

A tender for the development of the local segment of a second transboundary grid interconnection linking Greece and Bulgaria, from Nea Santa, northeastern Greece, to Bulgaria’s Maritsa area in the south, will be completed this year, Manousakis informed.

New interconnections with Albania and North Macedonia are also being examined at present, he noted.

In addition, IPTO is close to signing a cooperation agreement with Italian operator TERNA for the development of a second Greek-Italian grid interconnection.

Furthermore, plans for an upgrade of the Greek-Turkish interconnection, a project linking the European and Turkish transmission systems, are also maturing, the IPTO chief informed.

 

 

DESFA’s Alexandroupoli FSRU entry awaiting DG Comp OK

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Gas grid operator DESFA’s agreement, last November, for the acquisition of a 20 percent stake in Gastrade, the company established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal planned for Greece’s northeast, requires, as its final step, approval from the European Commission’s Directorate-General for Competition, to officially make the operator the consortium’s fifth member.

DG Comp approval of DESFA’s agreement is needed as the operator, managing Greece’s gas transmission system, is entering an independent gas system through its agreement to buy a Gastrade stake.

The DG Comp’s endorsement of the anticipated DESFA entry is seen as a formality following its recent approval of the entry of Bulgaria’s Bulgartransgaz as a fourth member of the consortium, also with a 20 percent stake.

A finalized investment decision by Gastrade for the development of the Alexandroupoli FSRU is expected this spring. The unit’s launch is scheduled for the first half of 2023.

The FID will enable the procurement procedure for the project’s equipment to go ahead, beginning with the floating unit, for which a Gastrade tender has already been completed.

A preferred bidder has also been declared for the FSRU’s subsea-and-overland pipeline, to link the floating unit with the country’s gas grid.

Bids for a tender offering a contract for the design, procurement and construction of the project’s fixed mooring system were submitted in late-February.

Talks are still in progress, at a diplomatic level, for the possible entry into the Alexandroupoli FSRU by North Macedonia’s state gas company, through the acquisition of a 10 percent stake from Gastrade. The outcome of these talks will not affect the project’s development.

Alexandroupoli FSRU 2Q investment decision, work to start in ’21

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The shareholders of Gastrade, a company founded by the Copelouzos Group for the development and operation of the Alexandroupoli FSRU planned for Greece’s northeast, are gearing up for an investment decision, expected in the second quarter, ahead of the beginning of the project’s development, anticipated within the current year.

Gastrade’s shareholders will most likely make an investment decision in May, sources informed.

The consortium’s shareholders are currently awaiting final administrative details that will formalize the entry into Gastrade of Bulgaria’s Bulgartransgaz and DESFA, the Greek gas grid operator.

Last week, Thanassis Dagoumas, the head official at RAE, the Regulatory Authority for Energy, approved the transfer of a 20 percent Gastrade stake from the Copelouzos Group’s Asimina Eleni Copelouzou to the Bulgarian gas company.

Copelouzou now controls 40 percent of Gastrade, with three stakeholders, Gaslog, DEPA Commercial and Bulgartransgaz each holding 20 percent.

Within the next few weeks, the RAE chief is also expected to endorse a further 20 percent transfer from Copelouzou to DESFA, giving the consortium’s five partners equal shares of 20 percent each.

Gastrade has already announced a tender offering an EPC contract for the floating LNG terminal in Alexandroupoli. Participants face a February 18 deadline.

An investment decision promises to push forth engineering studies, including geotechnical, as well as the order of a floating vessel for the project during the year. The FSRU will be completed in 2023, Gastrade shareholders have announced.

The shareholders appear receptive to the idea of North Macedonian involvement in the Gastrade consortium. They are awaiting bilateral developments at a diplomatic level, sources informed.

North Macedonia pipeline market test by September

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Gas grid operator DESFA has begun preparations with the energy ministry to stage a market test by September for the Greek segment of a gas pipeline interconnector to run to North Macedonia.

RAE, the Regulatory Authority for Energy, requested a market test, to ensure sufficient capacity reservation by users, for the project when it endorsed DESFA’s development plan covering 2017 to 2026.

North Macedonian authorities are also working on preparations for the project’s development. Just days ago, the country’s transport and communications minister Blagoj Bocvarski noted that all will be ready by the end of 2021 for the announcement of a tender concerning the construction of the project’s North Macedonian segment.

All licensing requirements will have been resolved earlier, by the middle of this year, Bocvarski added.

DESFA and its North Macedonian counterpart MER signed a Memorandum of Understanding in October, 2016 for the pipeline project.

Its Greek segment, budgeted at 51.4 million euros, will cover a 57-km distance, beginning from Thessaloniki’s Nea Mesimvria area.

The pipeline will be linked to Greece’s prospective Alexandroupoli FSRU in the northeast. North Macedonia currently fully depends on Russian gas supply through a Balkan pipeline.

Greece, Israel eyeing broader alliance for Balkans, central Europe

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The Greek-Israeli energy alliance is broadening its scope by aiming for the establishment of a Greek gateway to facilitate Israeli gas supply to the Balkan region and, by extension, central Europe.

This objective, part of strong diplomatic relations between the two countries in energy, was confirmed during a recent virtual meeting between Greece’s newly appointed energy minister Kostas Skrekas and his Israeli counterpart Yuval Steinitz.

Their bilateral talks will be followed up by broader meeting today to involve the energy ministers of Greece, Israel, Cyprus, Serbia, Bulgaria, Romania, North Macedonia and Hungary.

The participating officials will seek to lay the foundations for a closer energy alliance that would facilitate distribution from Israel’s Leviathan gas field via alternate routes – the Alexandroupoli FSRU and the IGP – to soon be offered by Greece.

The aforementioned Balkan and central European countries are extremely keen on securing alternative supply routes, diplomatic sources informed.

Much work is needed by Israel and Greece to establish energy alliances with Balkan countries, but a first step will seemingly be taken today.

PPC scouring southeast Europe markets for opportunities

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Power utility PPC, on a mission, in recent months, to seek investment opportunities in neighboring countries, is carefully planning its first expedition abroad after some time.

Although PPC’s new three-year business plan does not specifically reference investment plans abroad, the company’s interest in other markets has become apparent.

PPC is striving to become a modern corporation and market leader in southeast Europe by 2030, the power utility’s chief executive Giorgos Stassis told a Bloomberg event late last week.

Potential projects on the corporation’s radar include North Macedonia’s Cebren hydropower facility, a 500-600 million-euro project for which PPC has entered a tender with Archirodon as its partner, and, further ahead, RES investments.

Establishing oneself as a dominant player in the southeast European market is a major challenge as highlighted by the participation of ten consortiums, big names included, in the Cebren hydropower plant tender, the latest following a total of ten preceding procedures for this project, all fruitless.

A proportion of PPC’s 1.1 billion-euro EBITDA target for 2023 could be generated by business activities beyond Greece.

The power utility has assembled a working group tasked with scouring foreign-market opportunities in all sectors, including hydropower, photovoltaics, other RES technologies, project tenders, as well as acquisitions.

PPC has made a series of unsuccessful investment quests over the past 18 years, beginning with Romania’s privatization tender, in 2003, for electricity distributors Electrica Banat and Electrica Dabrogea. PPC had advanced to this procedure’s second round but ultimately lost to Italian powerhouse Enel.

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

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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.

 

North Macedonia involvement in key Alexandroupoli projects

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North Macedonia plans to help cover its energy needs through an involvement in two Greek-based projects, the prospective FSRU in Alexandroupoli, northeastern Greece, and, in the same region, a gas-fueled power station to run on LNG stemming from the floating LNG terminal.

Much progress has been made on the neighboring country’s interest in these two projects since a meeting in Athens last September between Greek Prime Minister Kyriakos Mitsotakis and his North Macedonian counterpart Zoran Zaev. The partnership also represents a strategic decision for the Greek government.

It is considered certain that a state-owned North Macedonian company will soon enter the Alexandroupoli FSRU project’s equity pool with a 10 percent stake, energypress sources have informed.

This project’s five current partners – Copelouzos group, Gaslog, Greek gas utility DEPA, Greek gas grid operator DESFA and Bulgartransgaz – are expected to each offer small portions of their respective 20 percent stakes to make available a 10 percent stake for the state-owned North Macedonian company in the Alexandroupoli FSRU.

The project’s development is not expected to be impacted by any equity reshuffles.

Two international tenders staged by Gastrade, a company established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, have been successfully completed. One of the two tender concerns the FSRU’s construction. The other concerns the installation of pipelines linking this facility to the national gas grid.

The Alexandroupoli FSRU consortium is expected to make a final investment decision in late February, sources informed.

On the other front, ESM, North Macedonia’s state electricity company, is expected to acquire a 25 percent stake in a gas-fueled power station to be developed by Damco Energy, a Copelouzos group subsidiary, in Alexandroupoli’s industrial zone.

The initiative will secure 200 MW of the facility’s 800-MW capacity for North Macedonia. The country currently has an electricity deficit of approximately 2 GWh.

Bulgarian state-owned electricity company NEK EAD also appears interested in acquiring a stake in the Alexandroupoli power station. Bulgaria has projected an electricity deficit a few years from now as the country must phase out major lignite-fired power stations. European Commission exemptions extending the lifespans of these units are expiring.

PPC bids for North Macedonia’s Cebren hydropower plant

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Power utility PPC is among ten international bidding teams from the energy and construction domains that have submitted pre-qualification offers to a tender for North Macedonia’s prospective Cebren hydropower plant, an investment expected to require at least 500 to 600 million euros.

This preliminary stage of the tender concerns water usage licensing rights for hydropower output at the neighboring country’s Crna Reka river. Preliminary bids were opened yesterday.

A related committee to soon be assembled by the North Macedonian government will examine whether the bids submitted fully meet the tender’s requirements before qualifiers are invited to a second round for offers concerning the project’s development in a Public Private Partnership (PPP) with state-owned power producer ESM.

Besides PPC, which has teamed up with energy and construction firm Archirodon, the other nine bids were submitted by: EVN-Verbund (Austria); Gezhouba Group China (China); Power Construction Corporation of China (China); EDF (France); Eiffage-Waterlu-Andritz-Norconsult (France, Austria); Webuild SPA Italia-Salini (Italy); Cobra-Cobra Hidraulika (Spain); ENKA-COLIN (Turkey); and Ozaltin-Yapi Merkezi (Turkey).

The North Macedonian government plans to commission a consultant for preparations concerning the tender’s second round.

In previous years, more than ten tenders have been staged for the construction and operation of the Cebren hydropower plant, but all efforts have proved fruitless, for a variety of reasons.

Prime Minister Zoran Zaev’s administration has noted that a serious effort is being made for the project’s development, ascertaining the current tender will be successfully completed.

It is planned to offer an installed capacity of between 333 and 458 MW for annual electricity production of 1,000 to 1,200 GWh.

North Macedonia eyeing 25% stake in Alexandroupoli gas facility, PM says

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North Macedonia may participate with a 25 percent stake in a natural gas facility in Alexandroupoli, northeastern Greece, that promises to offer a production capacity double the size of the country’s gas shortage, totaling 2 GWh, North Macedonian Prime Minister Zoran Zaev has told state broadcaster Alsat.

Also, bureaucratic procedures concerning the development of a natural gas pipeline from Greece to North Macedonia are close to being completed, while talks with Okta, a Hellenic Petroleum (ELPE) subsidiary, for a relaunch of the company’s oil pipeline running from Thessaloniki to Skopje are continuing, Zaev noted.

The North Macedonian leader also expressed an interest for the country to participate as a shareholder in the company to develop the Alexandroupoli FSRU, noting the country plans to utilize natural gas for all state facilities as “American LNG is far cheaper”.

The Alexandroupoli FSRU is expected to facilitate supply of American LNG to the Balkan region.

Extraordinary conditions push SMP as high as €105 per MWh

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Extraordinary conditions resulting from coinciding temporary closures of various power facilities, both in Greece and abroad, have pushed up the System Marginal Price, or wholesale electricity, to levels of as much as 105 euros per MWh, as was the case yesterday.

Four domestic gas-fired power stations – Enthes (Elpedison), Heron CC, Lavrio IV and Protergia – were out of order yesterday, for different reasons.

Problems beyond the Greek border have made matters worse. Bulgaria’s 1,000-MW Kozloduy nuclear power plant is currently out of order. The Greek-Bulgarian line serves as a transit route towards North Macedonia as a line linking Bulgaria and North Macedonia is out of order. So, too, is a line linking Greece with Italy.

Power stations that rarely operate, such as an open-cycle Heron unit, needed to be called into action as a result of the problems on these various fronts. Their necessary contributions pushed the SMP to far higher levels.

Three power utility PPC lignite-fired power stations, Agios Dimitrios II and III and Melitis, along with PPC’s gas-fired power stations Aliveri V, Lavrio V, Komotini, Megalopoli V, as well as units run by the independent energy firms Heron, Thisvi and Corinth Power, all needed to be called into action to cover the grid’s needs.

The market appears to have normalized for today. SMP levels are down to relatively satisfactory levels, averaging 44.49 euros per MWh, primarily as a result of significant RES contributions, covering more than 50 percent of the overall demand, 123.993 GWh.

The lignite-fired power stations used yesterday – Agios Dimitrios II and III and Melitis – will remain closed today.

ELPE seeking greater North Macedonia market share

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Hellenic Petroleum ELPE, aiming to capture a bigger share of the North Macedonian market, is currently negotiating for extrajudicial solutions that would enable the reopening of a company oil pipeline linking Thessaloniki with Skopje.

In an effort to help resolve this issue, ELPE has proposed a series of RES investments in the neighboring country as well as a conversion of its Okta refinery into a petroleum products hub facilitating distribution to the western Balkans.

December will be a crucial month for the negotiations between ELPE and North Macedonia as a verdict is scheduled to be delivered on an ELPE compensation request for 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

The North Macedonian oil market is dominated by two Russian companies, Gazprom and Lukoil, both gaining further ground. Gazprom supplies fuel products to North Macedonia via Serbia and Lukoil does so from Bulgaria.

US officials, seeking to inhibit the dominance of Russian energy firms in North Macedonia, have intervened to help resolve the country’s differences with ELPE.

Just days ago, a meeting on ELPE’s effort to reopen the oil pipeline was held in Thessaloniki during an official visit to the city by US Secretary of State Mike Pompeo. US government officials, Greece’s energy minister Costis Hatzidakis and North Macedonian government deputies participated.

For quite some time now, Washington has made clear its stance aiming to limit Europe’s energy dependence on Russian companies and, as a result, is promoting the ELPE oil pipeline as an alternative supply route into North Macedonia.

 

ELPE negotiating reopening of North Macedonia oil pipeline

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Hellenic Petroleum ELPE, Greek government and North Macedonian officials have begun talks aiming for the reopening of an oil pipeline linking ELPE’s Thessaloniki refinery with the company’s Okta refinery in the neighboring country through an extrajudicial settlement by the end of the year.

The issue was discussed at a meeting in Thessaloniki yesterday, held on the sidelines of a visit by US Secretary of State Mike Pompeo.

At the meeting, the ELPE and North Macedonian government officials appeared keen on achieving an out-of-court settlement, sources informed.

The Greek petroleum group is seeking compensation of 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

ELPE has already won an older case, on the same issue, at the International Court of Arbitration in Paris for compensation worth 52 million dollars. This verdict was delivered in 2007, three years after the case was filed.

The Greek and North Macedonian sides, encouraged by the US, agreed to form a committee to work, until mid-October, on a solution that could enable the oil pipeline to reopen following a seven-year interruption, sources informed.

The officials have set a deadline to reopen the pipeline by the end of the year, sources added.

ELPE has completed all technical work needed for the oil pipeline’s relaunch, sources said. The pipeline’s use in place of oil tankers would offer drastic transportation cost cuts.

The ELPE officials updated North Macedonia’s government officials on the company’s investment plan for the neighboring country, sources said. It is believed to include RES investments and a conversion of ELPE’s Okta facilities into a petroleum products hub that would serve the western Balkans.

ELPE is already present in Serbia and Montenegro and is now targeting the markets of Albania and Kosovo for supply of ready-to-use petroleum products.

The oil pipeline stopped operating in 2013 after ELPE deemed its Okta refining activities were no longer feasible. The 213-km pipeline has a 350,000-metric ton capacity.

Until 2013, the pipeline was used to transfer crude oil from ELPE’s Thessaloniki refinery to the Okta unit in Skopje.

Greek energy minister Costis Hatzidakis chaired yesterday’s meeting, which involved the participation of secretary-general Alexandra Sdoukou; deputy minister for economic diplomacy Kostas Fragogiannis; ELPE president Giannis Papathanasiou; ELPE chief executive Andreas Siamisiis; North Macedonian government deputies Liupko Nikolovski and Fatmit Bitikji; the country’s economy minister Kreshnik Bekteshi; US Assistant Secretary of State for Energy Resources Francis Fannon; and the US Ambassador to North Macedonia Kate Marie Byrnes.

DESFA, seeking leading role, awaits RAE approval of investment plan

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Gas grid operator DESFA’s majority stakeholder Senfluga – a consortium comprising three European operators, Snam, Fluxys and Enagas, as well as Greek energy company Damco – holding a 66 percent stake in the former state-controlled utility – is striving for extroversion and a leading market role in Greece’s post-lignite era.

As was recently indicated by DESFA’s chief executive Nicola Battilana, the company is striving to push ahead with major investment plans to bolster the role of natural gas as a transitional fuel towards climate-neutral energy systems, and also upgrade Greece’s geostrategic role in the southeast Mediterranean.

DESFA’s investment interest very much depends on the position to be adopted by RAE, the Regulatory Authority for Energy, on projects of national significance. The gas grid operator anticipates the authority will approve, within the next few days, its ten-year development plan covering 2021 to 2030, worth 500 million euros.

The gas grid operator is looking for swift approval of the plan. Fast action would help the country’s climate-change objectives set by the Greek government.

Besides the Greek market, DESFA is also seeking to generate revenue through various projects abroad. DESFA is expected to be declared the winning bidder in a tender for the maintenance and operation of a Liquefied Natural Gas Import LNGI facility developed in Kuwait by state-run KIPIC.

DESFA is also working on a series of other interests, including becoming the fifth member of a team behind the Alexandroupoli FSRU project, a floating LNG terminal envisaged for Greece’s northeast. This FSRU, geostrategically significant for Greece, promises alternate LNG supply to the Balkans.

Project licensing preparations are also being made by DESFA for a pipeline interconnection to link Greece and North Macedonia. The operator anticipates a market test co-staged by DESFA and MER, the neighboring country’s gas grid operator, will produce favorable results.

Other project plans at DESFA include gas grid expansion in Greece’s west Macedonia region, to facilitate the entry of natural gas where lignite has dominated as an energy source.