US backs Greece’s east Mediterranean activities, major projects

All countries in the east Mediterranean region must carry out their activities in accordance with international law, including the International Law of the Sea as stipulated by the 1982 United Nations Convention on the Law of the Sea, the Greek and US governments have jointly announced following a high-level virtual conference held yesterday on energy issues.

This statement clearly offers US support for the positions of Greece, facing Turkish provocation.

The working group’s participating Greek and US officials reiterated the commitment of the two countries to cooperate on the effort to diversify energy sources in southeast Europe, collaborate with regional partners for energy source development, and promote regional energy security.

The latest energy working group builds on steadily growing bilateral cooperation following Greek-US strategic dialogue meetings in December, 2018 and October, 2019, the joint announcement added.

The Greek team was represented by the Ministry of Foreign Affairs’ Deputy Minister for Economic Diplomacy and Openness Kostas Frangogiannis and Deputy Environment and Energy Minister Gerassimos Thomas (photo). The US team was represented by Assistant Secretary of State for Energy Resources Francis Fannon and Under Secretary of Energy Mark Menezes.

Fannon, the Assistant Secretary of State, expressed satisfaction on the completion of the Greek segment of the TAP gas pipeline project, to carry Azeri gas to Europe.

The US official also offered support for the ongoing construction of the Greek-Bulgarian IGB gas pipeline interconnection and the progress achieved in plans for an FSRU in Alexandroupoli, northeastern Greece, a South Kavala underground gas storage facility, and Greek-North Macedonian connection.

Electricity imports up, gas-fueled power stations running non-stop

A significant drop in gas prices, especially LNG, as well as the availability of particularly lower wholesale electricity prices in neighboring countries have prompted major changes to the country’s Day Ahead Schedule.

Electricity imports via interconnections with Bulgaria, Italy, North Macedonia and Turkey have risen to represent just under 30 percent of overall consumption.

Demand for an even greater level of imports during certain time periods has not been met as a result of infrastructure capacity limits.

Renewable energy generation, also making considerable contributions to the grid’s needs, has, at times, exceeded 30 percent of total consumption.

Gas-fueled power stations operated by independent producers are now operating around the clock, not just during peak hours, as had previously been the case. Offers by these units are now very competitively priced.

Gas-fueled power stations are currently covering over 30 percent of total consumption and lowering wholesale prices.

On the contrary, power utility PPC’s production is covering smaller amounts of daily electricity consumption. The utility’s contribution, currently slightly over 10 percent, primarily stems from its lignite-fired power stations.

DESFA wants key role in country’s infrastructure projects

Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

DESFA set for Greece-North Macedonia pipeline market test

Gas grid operator DESFA is preparing to launch a required market test for the development of a Greek-North Macedonian gas pipeline interconnection running from Nea Mesimvria, on Thessaloniki’s western outskirts, to Gevgelija, in the neighboring country’s southeast.

RAE, the Regulatory Authority for Energy, expected to soon be informed by the operator, will need to approve the terms of this preliminary procedure.

Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev, which, in the past, has expressed interest for a rival project, has yet to emerge with any new action.

An alternative project from Windows International Hellas would be developed as an independent gas system, whereas the DESFA proposal is planned to be incorporated into the national gas grid.

RAE approved both project plans at the beginning of this year following two years of processing and consideration.

However, DESFA was asked to conduct a market test as the cost of the project, if developed by the operator, would, as a national grid project, be passed on to users.

The project, budgeted at 48.7 million euros and planned to stretch 120 km for a 3 bcm capacity, is seen as a source-diversifying initiative.

 

North Macedonia seeking bilateral gas interconnection agreement

The North Macedonian government, unperturbed by its recent setback for EU accession talks, is moving to establish a bilateral agreement with Greece for the development of a natural gas pipeline interconnection linking the two countries.

North Macedonia’s dampened EU membership aspirations emerged as an unfavorable development for the project, which has remained stagnant.

A handful of EU member states, led by France, recently blocked North Macedonia, as well as Albania, from starting EU membership talks.

The North Macedonian government has approved a proposal for the commencement of negotiations with Greece that would lead to a bilateral agreement for this gas interconnection project.

The interconnection’s pipeline would run 80 km from Gevgelija to Negotino on the North Macedonian side and approximately 60 km on the Greek side, according to a project location deemed appropriate by North Macedonian officials, Greek diplomats have informed Athens.

 

 

Balkans-focused energy forum on eve of Thessaloniki fair

Two key regional gas pipeline projects involving Greece and backed by the US, the Greek-Bulgarian IGB gas grid interconnection and a pipeline to link Greece and North Macedonia, will be at the center of attention in talks between energy minister Costis Hatzidakis and peers at the Southeast Europe Energy Forum in Thessaloniki on September 6, a day ahead of the opening of this year’s Thessaloniki International Fair.

Hatzidakis and the US Ambassador to Greece, Geoffrey R. Pyatt, will be key speakers at the forum, where speeches will also be delivered by the energy ministers of Bulgaria, Cyprus, Israel, North Macedonia, Romania and Serbia.

Besides the prospective gas pipeline from Greece to North Macedonia, the talks between Hatzidakis and his North Macedonian peer will also focus on an upgrade of the electricity grid interconnection linking the systems of the two countries, as well as an upcoming relaunch of the Okta oil pipeline, stretching from an ELPE (Hellenic Petroleum) facility in Thessaloniki to the company’s Okta refinery and storage facility in North Macedonia.

The gas pipeline is the most important project of the three as an interconnection of the Greek and North Macedonian gas systems does not exist.

The Greek-Bulgarian IGB gas interconnection, along with TAP, to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to central Europe via Italy, are Greece’s two most significant international energy projects.

They promise to further diversify Europe’s energy sources and weaken Russia’s dominance in the region.

Meanwhile, Russia is promoting its own energy and geopolitical interests in the region. Last month, Greece was excluded from Turkish Stream, a Russian-Turkish gas pipeline plan whose second segment is now planned to run through Bulgaria, not Greece.

The first segment of this gas pipeline project is planned to supply Russian natural gas to the Turkish market and the second to Europe’s south and southeast.

 

PPC switches legal status of EDS venture, injects €1.8m

The board at power utility PPC board has decided to proceed with a 1.8 million-euro capital injection into the utility’s North Macedonia-based energy firm EDS in order to bring to equilibrium a negative balance and fully maintain the firm’s 2.5 million-euro line of credit following a request by NLB, one of the electricity supplier’s banking partners.

The PPC board also decided to change the legal status of EDS from a single-member limited liability company (SMLLC) to a public limited company (S.A.), the intention of this move being to establish more effective control over the electricity supplier and bolster its negotiating strength when dealing with financial institutions.

The PPC board meeting, held yesterday, was the final session headed by outgoing chief executive Manolis Panagiotakis, who submitted his resignation shortly after the conservative New Democracy party’s victory in the July 7 legislative election. Panagiotakis is being replaced by Giorgos Stassis, formerly the CEO of the Enel corporate group’s Romanian subsidiary.

PPC bought EDS last year for a sum of 4.8 million euros. Prior to its acquisition by the Greek power utility, EDS, previously owned by the neighboring country’s deputy Prime Minister Koco Angjushev, was a limited liability company (LLC).

Since the acquisition, PPC has taken a series of initiatives in an effort to upgrade EDS to European standards.

Greek power producers also eyeing Balkan export potential

The country’s power producers are focusing on the market prospects of  neighboring countries along with a heightened interest in Greece’s electricity market as a result of the upcoming elections, seen bringing the main opposition New Democracy party into power for more decisive reform action at power utility PPC, and intensified market competition.

Investments plans by PPC, currently developing its Ptolemaida V power station, as well as by private-sector enterprises, which have announced plans for five new state-of-the-art units, are expected to create an overabundance of electricity, even of all these plans are not executed. This is one of three main factors turning the attention of power producers to neighboring markets.

Also, it has become clear that Balkan markets lack flexibility in electricity generation as they primarily depend on coal, while gas networks that could support flexible gas-fueled power stations in the region are insufficient.

A third factor contributing to the heightened the interest of local producers for energy-related business in the wider region is Greek power grid operator IPTO’s ongoing upgrade of Greece’s grid interconnections with neighboring countries, especially Bulgaria and North Macedonia, which promises to create greater export potential.

Besides the independent producers, PPC is also looking to capitalize on this export potential.

Greek, North Macedonian operators working on gas, power links

Greek gas grid operator DESFA and its state-controlled North Macedonian counterpart MER plan to upgrade a memorandum of cooperation signed in 2016 for the construction of a 120-kilometer gas pipeline from Thessaloniki’s Nea Mesimvria area to the northern neighbor.

Heading a Greek delegation, Prime Minister Alexis Tsipras and his North Macedonian peer Zoran Zaev have agreed to sign a series of bilateral agreements and memorandums of cooperation in Skopje today.

The project, to interconnect the Greek and North Macedonian gas transmission systems, is regarded as one of the most significant energy investments being prepared by the two countries.

It is planned to offer an annual transmission capacity of about 3 billion cubic meters and also enable an interconnection with the TAP route – to supply Azerbaijan gas to European markets via Greece – for a diversification of sources.

The DESFA-MER association promises to be further enhanced by the North Macedonian operator’s moves for gas system interconnections with Kosovo and Montenegro.

Subsequently, the Greek-North Macedonian natural gas pipeline, once constructed, promises to offer a new supply route to Balkan markets.

DESFA is preparing to stage a market test for the Greek-North Macedonian pipeline during the second half of this year, sources have informed.

Meanwhile, Greece’s power grid operator IPTO and its North Macedonian counterpart MEPSO are discussing preliminary studies intended to lead to an upgrade of electricity interconnections between the two countries.

ELPE, seeing growth, to reopen northern pipeline late this year

An oil pipeline stretching 213 kilometers from an ELPE (Hellenic Petroleum) facility in Thessaloniki to its Okta company refinery and storage facility in the Republic of North Macedonia is expected to be reopened towards the end of this year, roughly six years after the Greek petroleum group shut it down.

The matter has been included on the agenda for a meeting in Skopje today between officials from both sides of the border, led by their respective heads of state, Greek Prime Minister Alexis Tsipras and his North Macedonian peer Zoran Zaev. The two leaders have agreed to sign a series of bilateral agreements and memorandums of cooperation.

Swift progress is being sought in efforts to finalize a customs agreement, align the oil pipeline plan with EU standards and facilitate its licensing.

ELPE intends to utilize the relaunched oil pipeline to transport fuel, especially diesel, in annual quantities of around one million metric tons, far greater than the total consumption in North Macedonia. for exports to Bulgaria, Serbia and Kosovo, besides local sales.

ELPE plans to use its 350,000-metric ton storage facility, located 25 kilometers from the North Macedonian capital, as part of the export drive to regional markets.

The Greek petroleum group stopped operating this facility in 2013 after deciding it was no longer feasible to run.

A recent bilateral agreement between Greece and North Macedonia, until recently officially named Fyrom (Former Yugoslav Republic of Macedonia), has increased trading potential between the two countries and in the wider region.

ELPE controls 80 percent of its Okta venture in North Macedonia. The remaining stake is held locally. This equity balance will remain unchanged but Okta’s retail presence is expected to  increase.

Okta currently operates 27 petrol stations in North Macedonia. An exclusive partnership with Makpetrol, the neighboring country’s leading oil and oil products distributor running 121 petrol stations, promises to increase Okta’s share of retail fuel stemming from its refinery in North Macedonia to 65 percent.

 

Three-way summit to support ambitious East Med project

The leaders of Greece, Cyprus and Israel are expected to unite for a joint statement in support of the East Med natural gas pipeline’s development as well as the reinforcement of regional energy security at a summit in Jerusalem this Wednesday, where they will be joined by US Secretary of State Mike Pompeo.

The anticipated declaration by Greek Prime Minister Alexis Tsipras and his respective Cypriot and Israeli counterparts, Nicos Anastasiades and Benjamin Netanhyahu, will represent yet another step towards the development of East Med, promising a transportation route for regional natural gas to  EU markets.

Pompeo’s presence at the forthcoming three-way summit, combined with ExxonMobil’s recently declared intention to take part in a new round of Israeli tenders offering licenses, make clear Washington’s determination for a leading role in the Mediterranean.

Discoveries of major natural gas fields in the region and plans for EU-bound transportation routes have increased US interest.

However, many obstacles still lie ahead for the East Med pipeline. These include Italy’s step back as a result of objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition. Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach.

Greece, Cyprus and Israel now appear to be examining alternative East Med routes towards Europe, the most favorable option being North Macedonia.

Though Egypt expressed support for East Med last week, Cairo plans to utilize the country’s LNG terminals with the aim of exporting gas in liquefied form. This infrastructure would have an advantage over East Med.

East Med’s commercial feasibility is another concern. Quantities and customers still need to be assured.

 

 

DESFA, Windows International to battle for northern pipeline

Respective applications submitted by Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev, and Greece’s gas grid operator DESFA for the development of a gas pipeline interconnection running from Greece’s north into North Macedonia have both been approved by RAE, the Regulatory Authority for Energy, viewing  the proposals as rival initiatives.

Windows International Hellas and DESFA will now need do to battle for the project’s contract.

RAE had approved the Windows International Hellas application in December, but the news was not disclosed until now, according to sources.

DESFA has been granted conditional approval for its ten-year development plan covering 2017 to 2026, which includes the gas pipeline interconnection, a project budgeted at 48.7 million euros. Full approval remains pending and depends on the results of a required market test.

Windows International Hellas intends to develop the pipeline as an independent natural gas system, which would not burden users, whereas DESFA wants to develop the project as part of the national natural gas system, which explains why RAE has called for a market test. The test will determine if sufficient demand exists to avoid burdening users.

Windows International Hellas wants to utilize the pipeline for coverage of North Macedonia’s domestic needs. The Lebedev-led firm plans to construct a gas-fueled power station, it has been rumored.

DESFA is aiming to connect with networks in other Balkan countries through the prospective gas pipeline.

It is planned to run from Nea Mesimvria in Thessaloniki to Gevgelija in North Macedonia.