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.