North Macedonia

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This development is creating investment opportunities as older units being withdrawn will, over the next few years, need to be replaced by new facilities, including natural gas-fired power stations.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

US backs Greece’s east Mediterranean activities, major projects

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.