GAP Interconnector promising additional Greek-Egyptian grid link

The GAP Interconnector project, planned to link Egypt with Greece, via Crete, promises to serve as a further step towards transforming Greece into an exporter of green energy to the rest of Europe, officials of the Eunice Group, heading the project, budgeted at 1.3 billion euros, have highlighted at a news conference.

It represents an additional Greek-Egyptian grid interconnection project, following the GREGY Interconnector, a 3.5 billion-euro project being promoted by Elica, a subsidiary of the Copelouzos group.

The GAP Interconnector project promises to reinforce Greece’s geostrategic role, making it a transmission hub to the rest of Europe for RES-generated electricity from Egypt, Andreas Borgeas, the project’s chief executive and a former California Senator, told journalists.

A feasibility study has already been conducted for the GAP Interconnector, as have oceanographic studies to map the areas concerning the project’s route, the Borgeas informed.

Two cables to offer a 2,000-MW capacity and run from coastal Matruh in Egypt to Crete’s Atherinolakko, a distance of approximately 450 kilometers, will serve as the project’s backbone. Converter stations will be installed at both these locations.

The project, whose subsea cable installations will reach as deep as 4,445 meters off Crete and 3,500 meters off Egypt, was described as “challenging” by Borgeas, the project chief, who added advanced deep-sea cable installation technology is now available.

The aim is to establish a multinational consortium for the GAP Interconnector project and induct, as a first step, the US company McDermott, one of the world’s biggest developers of subsea projects, Borgeas informed. French, Greek and Italian companies are also expected to soon join this consortium, the official added.

The GAP Interconnector project and the GREGY Interconnector are not rival projects but they will compete for points concerning PCI-PMI lists, Borgeas pointed out.

A direct, straight-line connection from Egypt to Crete planned for the GAP Interconnector offers it a comparative advantage as it is shorter and subsequently lower in cost, Borgeas noted, adding the project lies entirely within the boundaries of the Greek-Egyptian exclusive economic zone (EEZ).

It is planned to be complemented by the Southern Aegean Interconnector (SAI), a 1.5 billion-euro project to connect Athens, the Dodecanese islands, and Crete.

Greek-Egyptian grid link prospects gaining ground

A prospective Greek-Egyptian subsea grid interconnection, planned to exclusively transmit green energy from Egypt to Greece as a means of increasing the energy-mix share of renewables in Greece and the wider region, while also bolstering energy security in Europe, has gained further ground on a number of key fronts.

Political support has been expressed, progress is being achieved on the project’s engineering study, and the Copelouzos group, seeking to develop the project, is in talks with potential investors.

As for the technical side, agreements are being worked on for a detailed engineering study as well as a feasibility study for the project, whose cable installation will reach as deep as 2.7 kilometers at certain sections.

A Copelouzos group team headed by its president, Dimitris Copelouzos, has held talks in Cairo with Egyptian president Abdel Fattah El-Sisi and other leading Egyptian officials on regions where wind and solar farms could be developed to feed the Greek-Egyptian subsea cable.

The focus of these talks, also involving Egypt’s minister of electricity and renewable energy Dr. Mohamed Shaker El-Markabi, was on developing wind energy facilities in areas offering wind speeds of more than 10 meters per second. Such speeds are exceptional, well over those of locations hosting Greece’s best-performing wind energy facilities, where wind speeds reach 6.5 to 7 meters per second.

As for the solar energy sector, production tariffs of between 15 and 17 dollars per MWh offered at previous auctions in Egypt, a country offering flat land, are extremely competitive compared to prices in the Greek and Italian markets, even if energy transportation costs to Europe are taken into account.

Solar and wind energy investments offering a total capacity of 9.5 GW are planned to be developed in Egypt by the Copelouzos group, with partners, at a cost of approximately 8 billion euros. European, US, Middle East and Japanese companies have expressed interest to join the Copelouzos group for these projects.

Though investor interest for the Greek-Egyptian grid interconnection is strong, the European Commission’s stance will be crucial as it will be called upon to decide on the project’s inclusion in the projects of common and mutual interest (PCI/PMI) list, which would ensure EU funding support.

The Copelouzos group submitted its application last December. Brussels is expected to release PCI/PMI short lists in June, followed by finalized decisions in November.

EastMed pipeline consortium set to apply for PCI status

Boosted by the prospect of a significant gas deposit discovery off the Cyprus coastline, IGI Poseidon, the consortium behind the prospective EastMed gas pipeline, a 50-50 venture involving Edison and DEPA International Projects, is set to submit an application seeking Project of Common Interest (PCI) status, which assures EU funding support, for the gas pipeline project.

Russia’s invasion of Ukraine, skyrocketing oil and natural gas prices, as well as the EU’s efforts aiming for greater energy independence, with the backing of the US, are developments that have created new market conditions favoring the EastMed gas pipeline’s development.

On Monday, the ENI-Total consortium announced it has detected natural gas at Block 6 off the Cypriot coast, noting its preliminary estimates indicate the existence of a gas deposit measuring 2.5 trillion cubic feet, a significant quantity.

This gas deposit discovery is crucial for the sustainability prospects of the EastMed gas pipeline, intended to transport gas from deposits in the east Mediterranean to Europe.

According to a recent update from the IGI Poseidon consortium, the EastMed project’s licensing procedure and technical plans are nearing completion and should be finalized by the end of 2022. The EastMed gas pipeline could begin operating within 2027, the consortium added.

PCI-related funding support from the EU for the EastMed gas pipeline’s development would be crucial as this is a high-cost project, budgeted, most recently, at 5.2 billion euros.

RAE to propose 50% consumer coverage of Kavala UGS cost

RAE, the Regulatory Authority for Energy, will propose that consumer surcharges cover 50 percent of the total development cost of a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, sources have informed.

The authority is expected to include the UGS project on the agenda of its board meeting tomorrow and may forward, for consultation, its pricing policy and project funding proposal on Friday.

According to the same sources, the RAE plan includes a 35 percent cost-coverage proposal for the UGS project through EU funds or other support mechanisms – the Kavala project is on the EU’s PCI list, enabling EU funding – and 15 percent coverage by the investor.

The energy ministry appears to agree with RAE’s proposal for consumers to cover 50 percent of the UGS project’s cost through surcharges.

The need for strategic gas reserves has been further highlighted by the current energy crisis.

A pending regulatory framework from RAE is expected to soon be finalized, which would enable privatization fund TAIPED to move ahead with its next steps in the UGS’s tender. The procedure has remained stagnant for months.

The tender’s two final-round qualifiers, GEK TERNA – DESFA (Greek gas grid operator) and Energean, still need to submit binding offers. Should no other obstacles arise, the two qualifiers are likely to have submitted their binding offers within the next three months.

DESFA joining Alexandroupoli FSRU, development imminent

Gas grid operator DESFA is set to sign a contract next week for the acquisition of a 20 percent stake in Gastrade, the consortium established by the Copelouzos group for the development and operation of Alexandroupoli FSRU, a floating LNG terminal planned for Greece’s northeast, energypress sources have informed.

The European Commission offered its approval of DESFA’s entry into the Gastrade consortium approximately three weeks ago. The endorsement was needed as DESFA, operator of Greece’s gas grid, will also be entering an independent gas system by acquiring a 20 percent of Gastrade, making the operator the fifth member of the consortium.

Besides the Copelouzos group, currently holding a 40 percent stake, the Gastrade consortium is also made up of Gaslog Cyprus Investments, a fully owned subsidiary of Gaslog Ltd, owning and operating over 35 LNG tankers; Greek gas utility DEPA; and Bulgartransgaz, each holding 20 percent stakes. DESFA’s entry will give all partners equal 20 percent shares.

A finalized investment decision on the Alexandroupoli FSRU is expected within the first few days of 2022 so that the project can be developed and ready for launch within 2023.

The Alexandroupoli FSRU has, for years, been included on the EU’s projects of common interest (PCI) list, making the prospective facility eligible for favorable EU funding support, as its actualization will contribute to energy source diversification and also bolster energy security and competition in the wider region.

The Alexandroupoli FSRU will become the country’s fourth entry point for natural gas. It is planned to supply up to 944,000 cubic meters of natural gas per hour, or 8.3 billion cubic meters annually, and offer an LNG storage capacity of 170,000 cubic meters.

Greek-Egyptian technical committee formed for grid link

A joint technical committee has been formed as a first step for the development of a Greek-Egyptian electricity grid interconnection.

The working group’s formation was included in a Memorandum of Cooperation signed in mid-October by Greek energy and environment minister Kostas Skrekas and Egypt’s electricity and renewable energy minister Mohamed Shaker.

The establishment of technical specifications required by the grid interconnection project to ensure the project’s interconnectivity with the Geek and Egyptian grids is a key priority for the technical committee.

The committee will also explore the possibility of having the project included on the Projects of Common Interest (PCI) list, enabling EU funding support.

The interconnection project, whose development will entail the installation of an underwater cable linking the two countries, will exclusively facilitate transmission of renewable energy.


Network users to cover 50% of South Kavala UGS project cost

RAE, the Regulatory Authority for Energy, has approved guidelines specifying how the development cost will be shared for an underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north, thereby settling one of the main regulatory issues that remained for an ongoing tender offering use, development and operation of the facility.

According to the RAE decision, 50 percent of the project’s cost will be passed on to gas network users. As for the other 50 percent, 35 percent is expected to be covered through EU funding, assuming the project is included on the EU’s Projects of Common Interest (PCI) list, while the remaining 15 percent will be taken on by the eventual investor.

In the event that the UGS is excluded from the EU’s PCI list, the Greek State will consider becoming a project partner so that the cost for gas network users is not increased.

DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second round of a project tender staged by privatization fund TAIPED.

The almost depleted natural gas field, where the UGS will be developed, is located 18 km south of the main coastline of Kavala, roughly 6 km west of the island Thasos, at a sea depth of 52 meters.

Brussels forwards new PCI list, to be finalized late this year

The European Commission’s fifth PCI (Projects of Common Interest) list in the electricity and natural gas sectors, being forwarded for public consultation, features, for now, a number of project additions and removals, compared to the previous edition.

Market officials and state authorities will have the opportunity to offer their views and observations over the consultation procedure’s twelve-week period before the European Commission adopts a finalized version of the fifth PCI list towards the end of 2021, based on an existing Trans-European Networks for Energy (TEN-E) framework, focused on linking the energy infrastructure of EU countries.

PCI projects are entitled to EU funding support. Brussels authorities introduced selection criteria revisions in December, ascertaining, however, that the impact of all projects, especially on CO2 emissions, will be appraised when finalizing the PCI list’s fifth edition.

The provisional list includes a number of electricity and gas sector projects concerning Greece.

Electricity-sector projects involving Greece include: a Bulgarian-Greek grid interconnection, expected to be completed in 2023; an Egyptian-Greek-Libyan grid interconnection headed by Green Power 2020 and scheduled for delivery in 2025; as well as three Egypt-Greece interconnections, two of these featuring Kykladika Meltemia SA as project promoter and expected to be respectively completed in 2025 and 2028, and a third headed by Elica SA and scheduled for completion in 2028.

An energy storage project planned by Eunice for Ptolemaida, northern Greece, and scheduled for completion in 2022 is a new entry on the PCI list.

In the natural gas sector, the PCI list includes: the Alexandroupoli FSRU (2022); a subsea pipeline between Greece and Italy, known as the Poseidon Pipeline (2025); EastMed, a pipeline planned to carry natural gas from the east Mediterranean to European markets, via Crete (2025); a compressor station in Thessaloniki’s Nea Mesimvria area (2022); a metering and regulating station in Megalopoli, Peloponnese (2025); a compressor station in Abelia, in Greece’s mid-north (2023); a compressor station in Kipoi, northeastern Greece (2024); a pipeline link for the Alexandroupoli FSRU (2022); a TAP pipeline capacity increase (2025); and the development of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece (2023).

Brussels unveils electricity, hydrogen project conditions for PCI status

The European Commission has just unveiled new criteria that need to be met by energy infrastructure projects concerning the electricity, and now, also hydrogen, sectors for Project of Common Interest (PCI) status.

Brussels presented these details as part of its wider plan concerning the financing and development of energy infrastructure. The European Commission will commit annual investments of 50.5 billion euros in the effort to meet 2030 climate-agreement targets.

Electricity transmission projects will need to increase trans-boundary capacities between EU member states by at least 500 MW, according to one of Brussels’ new criteria for PCI status, enabling favorable EU funding.

In energy storage, projects will need to offer capacities of at least 225 MW to secure their PCI status.

Smart meter installations must involve transmission and/or distribution operators of at least two EU member states and represent at least 5,000 users either producing or consuming 300 GW per year, including at least 20 percent from renewable energy sources.

As for hydrogen, projects must facilitate trans-boundary transmission between EU member states or boost storage capacities at borders by at least 10 percent.

Poseidon overland section plan kept alive, PCI status sought

IGI Poseidon, a 50-50 joint venture between Greek gas utility DEPA and Italian energy operator Edison, is keeping alive the development prospects of an overland Greek segment, across northern Greece, for its Poseidon pipeline, to cross the Ionian Sea for a Greek-Italian link.

DEPA and Edison have submitted an application to the European Commission for PCI status concerning the overland section of Poseidon, enabling EU funding support, sources informed.

The Poseidon pipeline’s onshore segment, planned to stretch 760 km across northern Greece, from Kipous in the northeast, to Florovouni-Thesprotia, in the country’s northwest, before crossing the Ionian Sea all the way to Otranto, on Italy’s east coast, is considered an extension of the EastMed gas pipeline plan to link Greece, Cyprus and Israel.

Poseidon’s onshore segment could be used to transport natural gas from east Mediterranean gas reserves to Balkan markets.

The Poseidon pipeline’s overland section can also be expected to be linked to the Greek-Bulgarian IGB gas pipeline, another project involving IGI Poseidon.

The Greek-Italian Poseidon pipeline has been incorporated into a trilateral agreement signed by Greece, Cyprus and Israel for the EastMed pipeline. This pact was ratified in Greek Parliament last month.

Greece, Cyprus and Israel recognize the overland section of the Poseidon pipeline as a project of national significance.

Capacity of the Poseidon pipeline has been increased to 15 bcm from an original capacity of 8 bcm, while a further capacity boost to 20 bcm is planned.


IPTO, Ariadne roles for Crete link project clarified to avoid complications

Power grid operator IPTO, guided by consultants and legal experts, has prepared a concession agreement clarifying the roles of the operator and its subsidiary firm Ariadne Interconnection in the development of the Athens-Crete electricity grid interconnection. This is needed to avoid future complications in Brussels.

The concession agreement makes clear Ariadne Interconnection’s involvement in the venture is limited to the development stage, noting the subsidiary firm will not maintain any operational or management interests once the project is delivered to IPTO for operation.

RAE, the Regulatory Authority for Energy, has warned that any managerial involvement in the project by a company such as Ariadne Interconnection, not a certified operator like its parent company, will lead to complications at the European Commission and could delay the project, to be developed as a national project, not a PCI project promising EU funds.

RAE’s concerns are made more acute by the prospect of Ariadne Interconnection’s prospective split from IPTO as part of a procedure to offer a minority stake to third parties. Ariadne Interconnection is currently a fully-owned IPTO subsidiary.

Clarification on the project roles of IPTO and Ariadne Interconnection will enable Ariadne Interconnection to seek minority shareholders.

IPTO has noted a 40 percent stake of Ariadne Interconnection will be offered to investors to help finance the project without the burden of bank loans.

State Grid Corporation of China (SGCC), IPTO’s strategic partner with a 24 percent stake, has expressed an interest to acquire a 20 percent stake in Ariadne Interconnection.

Kavala gas storage unit an independent grid project

A prospective underground gas storage facility at a depleted offshore gas field in the south Kavala region will operate as an independent grid project, the energy ministry has decided, sooner than expected, through a joint ministerial decision reached following a favorable opinion offered by the Legal Advisor of the State.

Just weeks ago, the ministry had indicated it would soon launch a tender for the project’s development but defer a decision on whether the storage facility would operate as an independent or national grid project. However, a deferral may have led to ambiguity, unsettling investors.

As a next step, RAE, the Regulatory Authority for Energy, will head an effort for the preparation of a cost-benefit analysis in cooperation with the privatization fund TAIPED, the objective being to complete this study as quickly as possible.

Concurrently, TAIPED intends to begin preparations for an international tender offering the project’s development, usage and exploitation rights for a period of up to fifty years.

TAIPED will most likely stage the tender in June, energypress sources informed.

Besides private-sector investors, the tender will also be open, under equal terms, to Greek gas grid operator DESFA and its stake holders.

Local authorities are pushing to make up for lost time and secure financing for this PCI-categorized project through the EU’s Connecting Europe Facility.


IPTO in talks with financial institutions for Crete link loan

Power grid operator IPTO is currently involved in talks with local and foreign financial institutions for a loan concerning Crete’s major-scale electricity grid interconnection with Athens, a project budgeted at around one billion euros.

IPTO chief executive Manos Manousakis is looking for a project loan of roughly 400 million euros. Talks, so far, with financial institutions, including the EBRD, according to sources, are believed to have made good progress.

Financial institutions contacted so far appear positive on the prospect of  providing financing for the Crete-Athens interconnection but want WACC level and cost-benefit study assurances.

IPTO anticipates financing for the project from three sources, including the 400 million-euro bank loan.

The operator has already allotted 200 million euros for subsidiary firm Ariadne Interconnector, the project promoter. IPTO also expects between 350 and 400 million euros to come from the EU’s National Strategic Reference Framework (NSRF).

A new regulatory framework for the grid interconnection as a national project rather than a PCI project is a significant pending issue that also needs to be resolved.

Operating status decision on Kavala gas storage unit later

The energy ministry is considering to soon launch a tender for the development of an underground gas storage facility at a depleted offshore gas field in the south Kavala region and defer a crucial decision on whether the facility will operate as an independent or national grid project for a latter date, energypress sources have informed.

The ministry wants to move ahead as fast as possible to meet EU funding deadlines for this project, on Brussels’ PCI list.

Prospective investors should not be concerned about the impact of this decision on their investment plans as the project’s status, whether independent or part of the national grid, will not affect the tender’s participation terms and conditions, energy ministry sources contended.

However, this element of ambiguity could unsettle investors and cause further delays, pundits have warned.

The pending decision on whether to classify the facility as an independent or national grid project appears to be the reason why the energy ministry has delayed issuing a related ministerial decision.

A ministerial decision is needed to clarify legal matters concerning the project as well as its pricing policy, regulated earnings and minimum yield. Privatization fund TAIPED needs this information to launch the tender.

RAE given 5 months to set Kavala underground gas storage charges

RAE, the Regulatory Authority for Energy, has been given five months to determine the pricing policy, regulated earnings and WACC for a planned underground gas storage facility at a depleted offshore gas field in the south Kavala region, according to an imminent joint ministerial decision, energypress understands.

The launch date of the project’s tender will depend on funding for project studies through the EU’s Connecting Europe Facility (CEF) program. This essentially means that the privatization fund TAIPED will need to officially launch the project within the first half of this year to avoid missing out on CEF funds.

The project’s investment cost is estimated at between 300 and 400 million euros.

France’s Engie as well as Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender. DESFA, the gas grid operator, is also expected to participate in the tender.

The project, promising gas storage capacity of 360 million cubic meters, is considered vital for Greece as it will be able to maintain strategic reserves for considerable time periods.

Its development will help boost the performance level and strategic role of the Revythoussa LNG terminal just off Athens, and the prospective Alexandroupoli FSRU in the country’s northeast, as these will be able to supply the wider region greater gas quantities via the IGB and TAP gas pipelines.

The south Kavala project has been classified as a PCI project, offering EU funding opportunities, seen as crucial for the investment’s sustainability, according to some analysts.

Operators must plan hydrogen projects to seek PCI funds

Greece’s network operators need to pursue projects concerning the development of networks designed to carry and distribute hydrogen, the new clean fuel whose rise is leading to major changes.

Companies such as Greek gas grid operator DESFA, gas utility DEPA and distributors will need to include hydrogen-related projects in their next network development programs. Hydrogen projects are expected to be eligible for favorable EU funding.

A fortnight ago, EU energy commissioner Kadri Simon informed European Parliament’s Committee on Industry, Research and Energy that a new regulation for projects of common interest (PCI) will place emphasis on hydrogen networks, carbon capture, domain bridging, storage batteries and smart networks.

In addition, a German government official recently declared that hydrogen will become the new gasoline, noting Germany will play a leading role in its overall development.

Quite clearly, national governments and major energy companies around Europe are working to establish hydrogen as a key fuel in the adjustment needed to achieve decarbonization goals.

In Greece, network operators will need to seize the opportunity and plan hydrogen projects eligible for a share of the EU’s PCI funds.



South Kavala gas storage facility facing tough PCI schedule

Despite being regarded as pivotal infrastructure for the country’s energy sector, a prospective underground gas storage facility at a depleted offshore gas field south of Kavala has remained stagnant in recent months, prompting fears that the required momentum needed for utilizing related wider developments could be lost.

The project’s inclusion on the EU’s PCI list offers financing opportunities, which, according to certain analysts, are crucial for the investment’s sustainability. However, this privilege comes with a strict schedule that must be maintained.

If the underground gas storage project is to qualify for funding offered by the EU’s Connecting Europe Facility (CEF) program, then authorities must submit a related application within 2020.

This essentially means a project promoter must be selected to prepare a business plan and apply for financing, all within the second half of this year.

Also, a tender for the storage facility’s privatization will need to be staged by privatization fund TAIPED by the end of the first half, experienced officials have pointed out.

A joint ministerial decision establishing a legal framework for the facility’s operation will need to precede the sale procedure. In addition, RAE, the Regulatory Authority for Energy, must, prior to the privatization, establish general guidelines determining pricing policy, regulated earnings, WACC, and a minimum capacity vacancy level that investors will need to maintain for national security reasons.

The chances of CEF financing are now starting to tighten up as the month of January is just about gone and there is no sign of a joint ministerial decision. When delivered, it should serve as a catalyst for ensuing initiatives.






EIB funding extension for PCI gas projects crucial for Greece

The energy ministry’s leadership is hastening efforts to shape financing models for Greek PCI-classified natural gas projects as the European Investment Bank is expected to stop funding fossil-fuel projects beyond 2021.

The EIB had initially decided to stop funding all fossil fuel projects, including gas projects, as of 2020 before deciding to extend the period.

Greece, preparing major gas projects, had opposed the EIB decision. As part of this challenge, deputy energy minister Gerassimos Thomas held talks with the financial institution’s board of directors.

The revision now enables EIB funding for certain PCI-classified fossil fuel projects until the end of 2021. Thereafter, criteria will be applied to determine whether financial support can continue to be provided for projects on an individual basis.

Significant Greek natural gas projects are expected to be mature for financing and development around or beyond 2021.

The country is preparing to co-develop the East Med pipeline with Cyprus and Israel and also develop an FSRU in Alexandroupoli, northeastern Greece and an underground gas storage facility at a depleted natural gas field in the offshore South Kavala region.

The availability of EIB financing promises to prove crucial in determining the commercial viability of these projects.



Ariadne Interconnector minority stake tender early in 2020

A tender to offer one or two prospective partners minority stakes in Ariade Interconnector, the SPV established by power grid operator IPTO for the development of the Athens-Crete electricity grid interconnection, is expected to be staged within the first few months of 2020.

Both the energy minister Costis Hatzidakis and IPTO chief executive Manos Manousakis anticipate common ground will soon be found with RAE, the Regulatory Authority for Energy, to enable the tender to go ahead.

State Grid Corp of China (SGCC) appears willing to participate in the tender. The Chinese company, already holding a 24 percent stake of IPTO, has expressed interest to acquire 20 percent of Ariadne. A related memorandum guaranteeing SGCC’s involvement, has been signed between SGCC and IPTO.

If SGCC’s interest in Ariadne is limited to 20 percent, then a second package, most probably offering an additional 19 percent, will be offered to investors for a total of 39 percent.

This is the Ariadne Interconnector stake that had been planned for EuroAsia, a consortium of Cypriot interests that has opposed IPTO’s decision to appoint Ariadne, a subsidiary firm, as project promoter of the Athens-Crete electricity grid interconnection.

Euroasia, heading a consortium formed for a wider PCI-status interconnection project to link the Greek, Cypriot and Israeli grids, has sought control of the Crete-Athens segment’s development.

If SGCC expresses an interest for an Ariadne stake bigger than 20 percent, then just one package offering 39 percent will be offered through a tender.

IPTO is determined to keep a majority stake in its subsidiary Ariadne as the operator wants to maintain control over the construction stage of the Athens-Crete link, to be managed by the operator once launched.

Investors, especially from abroad, are expected to show strong interest in Ariadne.

The IPTO administration is also looking to offer minority stakes to investors in other projects it is developing. This would secure further financing support and swifter completion.

Ariadne third-party investors a problem for Crete grid link

Crete’s major-scale electricity grid interconnection with Athens, now entering its next phase following a government decision to not develop the link as a national project, meaning the project will not be included on the EU’s new PCI list, faces subsequent administrative and financing complexities.

Ariadne, as a fully-owned subsidiary of power grid operator IPTO, is entitled to develop this national electricity transmission project, but appears to lose the right should third parties enter its equity make-up as partners.

IPTO wants investors to take on a minority stake of up to 49 percent in Ariadne as a means of avoiding bank loans for the project’s development.

If third parties enter Ariadne’s make-up as shareholders, then the subsidiary will need to be re-certified as operator based on its new line-up. A second alternative would require RAE, the Regulatory Authority for Energy, to stage the competitive procedure to bring new investors into Ariadne.

Both options would be time-consuming, which is a major concern given the urgency of this project, needed to prevent looming energy shortages on Crete.

The energy ministry, fully informed on the complexities to be created by third-party entries into Ariadne’s line-up, is expected to soon seek further clarification on the matter from the European Commission.

Ministry closing in on Kavala underground gas storage model

The energy ministry is close to deciding on a business model for a prospective underground gas storage facility in the offshore South Kavala region, the objective being to ensure the investment’s sustainability without overburdening consumers.

Numerous alternatives have been examined so far but a model applied in France and Italy appears to be the most favored, energypress sources informed.

The content of an upcoming joint ministerial decision is now at a mature stage following efforts that have now lasted nearly two years, energy ministry officials noted.

The ministerial decision will determine the licensing, development and exploitation terms for the project, 30km south of Kavala, where a depleted natural gas field is planned to be converted into an underground gas storage facility.

Swift progress is needed as Greece will need to request EU financing for the project, on the PCI list, in 2020. If the request is delayed until 2021 then the available funds could be severely diminished and absorbed by other European PCI-status projects.

The underground gas storage facility is vital for Greece’s electricity grid given the anticipated increase of gas consumption to be prompted by the planned development of combined cycle power plants. Five market players, Mytilineos, Elpedison, GEK TERNA, Elval Halkor and Karatzis, have expressed interest to develop such units.

Privatization fund TAIPED will take over proceedings for a tender once the project’s business model has been decided. The investment is expected to reach between 300 and 400 million euros. Its storage capacity is estimated at between 360 and 720 cubic meters.

Greece is the only EU member without an underground gas storage facility. All other member states maintain facilities covering at least 20 percent of their annual gas consumption needs. Many more similar facilities are currently being planned around Europe.

PM decision on Crete link, wider PCI plan support needed today

Negotiations ran throughout the day until late last night as all sides involved sought to determine if an agreement is possible on the prospective Crete-Athens power grid interconnector and whether the wider Athens-Crete-Cyprus-Israel interconnection, an EU project of common interest (PCI), remains feasible under the current conditions.

Greek Prime Minister Kyriakos Mitsotakis must inform the European Commission  today on whether Athens supports the wider PCI project, a stance that would incorporate the Athens-Crete segment, or pursue this segment separately as a national project.

A European Commission PCI committee is meeting today to discuss the EU’s new PCI list for the next two years.

Greek power grid operator IPTO has been embroiled in a dispute with Cypriot consortium EuroAsia Interconnector over development control of the wider project’s Crete-Athens segment. EuroAsia Interconnector heads the wider project and has been joined by Elia, Belgium’s electricity transmission system operator, in a strategic alliance.

The Cypriot side entered yesterday’s negotiations with a slightly improved offer but the Greek side still considers it insufficient for constructive talks.

The Greek government has set red lines for the Athens-Crete segment, including no further delays for ongoing tenders offering converter station contracts, which effectively means technical term revisions will not be accepted. Greek officials insist compatibility for the wider project is ensured.

Crete-Athens link tender set for further deadline extension

A tender concerning the Crete-Athens grid interconnection project’s engineering, procurement and construction of two converter stations and a GIS substation will be given a further deadline extension, possibly an entire month, as a result of requests made by major prospective bidders.

An initial August 30 deadline was reset for September 30 and may now be extended to October 30.

Project promoter Ariadne, a subsidiary of Greek power grid operator IPTO, has made clear to the tender’s participants the latest deadline extension will be the last as any further delays would place at risk the project’s completion on time. This would have repercussions as the project is vital for Crete’s energy sufficiency.

The latest extension is not linked to a legal challenge made by EuroAsia, a consortium of Cypriot interests heading a wider PCI-status project to link the Greek, Cypriot and Israeli grids, sources noted. Nor is it any way linked to a pending Greek government response to the European Commission on whether the Crete-Athens interconnection will be supported by Greece as part of the wider PCI project or as a national project, the sources added.

Some of the companies interested in the Crete-Athens link tender have confirmed requesting a new deadline extension.

This tender was preceded by an initial tender concerning the project’s cable segments. Appraisals of the technical aspects of offers will be completed by the end of this month, according to IPTO chief executive Manos Manousakis, while assessments of the financial offers will follow.

Supreme Court rejects Euroasia case for Crete link control

The Council of State, Greece’s Supreme Administrative Court, appears to have rejected a case filed by Euroasia Interconnector, a consortium of Cypriot interests, challenging the appointment of Greek power grid operator IPTO subsidiary Ariadne as project promoter of a grid interconnection to link Crete with Athens, energypress sources have informed.

Euroasia, heading a consortium formed for a wider PCI-status interconnection project to link the Greek, Cypriot and Israeli grids, is seeking control of the Crete-Athens segment’s development.

Legal experts believe Euroasia’s challenge will not succeed.

The Cypriot consortium’s Supreme Court move, which opposed the Ariadne subsidiary’s appointment by RAE, Greece’s Regulatory Authority for Energy, followed an unsuccessful legal attempt at the Authority for the Examination of Preliminary Appeals (AEPP).

The Supreme Court’s verdict is crucial as it will determine if ongoing tenders for the development of the Crete-Athens interconnection can continue or not.

Procedures concerning a tender for the project’s transmission stations are progressing and attracting the interest of major developers and suppliers. This tender’s deadline was extended by one month.

The energy ministry, in contact with the European Commission over the matter, has not written off the prospect of a settlement with Euroasia but insists the project’s swift development is the key criterion behind decisions.

Supplying the required capital for a minority stake in Ariadne appears to be the only available option for Euroasia at this stage. However, the Cypriot consortium does not appear willing to take such a route.

Time is running out. Greece has until October 31 to inform a European Commission committee handling the EU’s PCI list if the country will support the Crete-Athens interconnection as part of the wider PCI project or proceed with its development as a national project.

Supreme court to hear Euroasia Crete-Athens case Thursday

The Council of State, Greece’s Supreme Administrative Court, is scheduled to hear a case filed by Euroasia Interconnector – a consortium of Cypriot interests heading a PCI-status grid interconnection project to link the Greek, Cypriot and Israeli systems – against Greek power grid operator IPTO on September 5.

Euroasia, embroiled in a dispute with IPTO for control of the Greek segment’s development, planned to link Crete with Athens, recently escalated its legal effort following a rejection by AEPP, the Authority for the Examination of Preliminary Appeals.

Commenting on the upcoming hearing, legal sources said they do not expect a favorable verdict for the Euroasia consortium.

Though the deadline of a project tender held by Ariadne Interconnector, an IPTO subsidiary, was given a one-month extension to September 30, procedures are progressing normally, while all major players appear interested, sources told energypress.

IPTO has increased the budget of the Crete-Athens interconnection to 380 million euros from an initial figure of 315 million euros. This 20 percent increase reflects the development cost, taking into account related projects in other parts of Europe as well as a high risk of delay-related costs.

The Crete-Athens interconnection needs to be completed in a 36-month period, far shorter than time periods of between 48 and 72 months offered for equivalent projects, internationally.

The Greek energy ministry has indicated a willingness to cooperate with the Cypriot consortium, making clear the project’s swift development is a pivotal factor behind decisions.

Greece has until October 31 to inform a European Commission committee if the country intends to support the Athens-Crete interconnection as a part of the wider PCI project or as a national project.

Kavala underground gas storage tender later this year

A tender concerning the utilization of a depleted natural gas field in the offshore South Kavala region as an underground gas storage facility is expected to be launched by the privatization fund TAIPED towards the end of the year.

The privatization fund has informed the energy ministry on the progress of preparations, energypress sources informed.

A month ago, on July 12, TAIPED launched a tender seeking specialized preliminary services for the project.

The winning bidder of this initial procedure, expiring August 28, will need to prepare the technical details of the project’s eventual tender and offer consultancy to the privatization fund on the prospective underground gas storage facility’s feasibility and demands.

The recently appointed energy minister Costis Hatzidakis has made clear his intent to utilize the depleted natural gas field.

France’s Engie, GEK-Terna and Energean have formed a consortium, named Storengy, in anticipation of the project’s tender.

Greek gas grid operator DESFA is also believed to be eyeing the project, included in the EU’s list of PCI projects.

The project’s budget is estimated at between 300 and 400 million euros, while its storage capacity could end up being anywhere between 360 and 720 million cubic meters, as much as 10 percent of the country’s annual natural gas consumption.

The prospective underground gas storage facility is regarded as infrastructure that will complement – rather than compete against – the country’s existing LNG terminal on Revythoussa, an islet just off Athens, as well as a prospective FSRU in Alexandroupoli, northeastern Greece, helping establish Greece as an energy hub.

Crete link tender deadline for cables expires today

The deadline of a tender for the engineering, procurement and installation of underwater cable systems (2 x 500 MW) concerning the Crete-Athens electricity grid interconnection expires today following two extensions.

An initial July 22 deadline was extended to July 29 before being stretched further to August 5. These successive deadline extensions sparked rumors of possible revisions concerning the 330-km long project.

Power grid operator IPTO, whose subsidiary Ariadne Interconnection is staging the tender, has ruled out the possibility of any further extension.

IPTO is determined to make clear that the tender is pressing ahead despite efforts by Cypriot consortium Euroasia Interconnector aiming to block the procedure.

Euroasia Interconnector, heading a wider PCI-status project to link the Greek, Cypriot and Israeli grids, is at odds with IPTO for control of the Crete-Athens segment’s development.

Euroasia Interconnector took fresh legal action last week against IPTO and RAE, the Regulatory Authority for Energy, which, if successful, could prompt further tender delays.

The Crete-Athens electricity grid interconnection is urgently needed to prevent a looming energy shortage on the island, Greece’s largest. Outdated diesel-fueled power stations operating on the island need to be withdrawn to meet EU environmental regulations.

The Cretan grid interconnection project is scheduled to be completed in 2022.

Italy’s Prysmian and France’s Nexans, both leading companies in the field, have shown interest in the tender.


Crete grid link urgent, minister stresses at Cyprus meeting

Euroasia Interconnector, a consortium of Cypriot interests heading a PCI-status grid interconnection to link the Greek, Cypriot and Israeli systems, is prepared to collaborate with Greek authorities for the development of the project’s Greek segment, to connect Crete with Athens, as long as Greece accepts a related road map set by the European Commission last October, sources have informed.

Essentially, this can be interpreted as a Cypriot demand for Greece to accept the project’s technical specifications that were rejected by Greek power grid operator IPTO and the previous Syriza government.

Last year’s road map includes all the technical, financial and interconnection details concerning the project’s three segments, linking Athens with Crete, Crete with Cyprus and Cyprus with Israel. Absolute compatibility is essential.

Greek energy minister Costis Hatzidakis, who met yesterday with Euroasia Interconnector’s top officials, emphasized the importance being placed by the newly elected conservative New Democracy government on the project’s swift development.

Fast progress will serve as the main criterion when determining action to be taken, Hatzidakis stressed at the meeting, in Nicosia, adding that, if possible, the support of EU funds would be a bonus. PCI projects are entitled to EU support funds.

IPTO and Euroasia Interconnector have been at odds for control over the development of the project’s Crete-Athens segment. It is needed urgently to prevent a looming energy shortage on Crete as of next year, when old units still operating on the island will need to be withdrawn to align the country with EU environmental policies.

Crete grid link tender deadline extended by a few days

The deadline of a tender for the engineering, procurement and installation of cables and stations concerning the Crete-Athens electricity grid interconnection, needed to prevent an energy shortage on the island, Greece’s largest, has been re-extended to August 5 from July 29, after the initial expiry date had been set for July 22.

Power grid operator IPTO, which has established the Ariadne Interconnector subsidiary for the project’s development, needed, according to the tender’s terms, to inform participants of the latest deadline no later than three days before the existing deadline. IPTO issued an announcement on the deadline extension yesterday.

A second tender for the engineering, procurement and installation of two transformer stations and a substation concerning the project has been extended to August 30.

Earlier this week, the Council of State, Greece’s Supreme Administrative Court, rejected a case filed by Euroasia Interconnector against the tenders, paving the way for IPTO to push ahead with the project, to be completed over two stages. The first will link Crete with the Peloponnese while the second will connect Crete with the Athens area.

Euroasia Interconnector, a consortium of Cypriot interests heading a wider PCI-status project to link the Greek, Cypriot and Israeli grids, has fought for development control of the Crete-Athens segment.

According to some sources, the Greek government may exhaust all possibilities for the project’s funding support through the EU’s PCI catalog, offering favorable terms. The interconnection’s development as a national project is another option.

A government decision on the course it will opt to take is expected over the next few days. The priority, at this stage, is to push ahead for the project’s swift completion.


Swift progress needed for Cretan link, minister supports

There is no time to waste on the Crete-Athens grid interconnection project, while a solution in a dispute between Greek power grid operator IPTO and Cypriot consortium Euroasia Interconnector for control of the project’s development is desirable, the newly appointed energy minister Costis Hatzidakis has supported in comments at an Economist conference in Athens.

These thoughts, supporting swift development of the Cretan link, needed to avoid an energy shortage on the island, were also expressed by the Greek minister to his Cypriot counterpart Giorgos Lakkotrypis on the sidelines of the event, their first meeting since Hatzidakis assumed his post.

IPTO chief executive Manos Manousakis expressed satisfaction over the Greek energy minister’s determination to push ahead with the Cretan grid link.

Euroasia Interconnector, heading a PCI-status Greek-Cypriot-Israeli electricity grid connection project, is seeking control, as provider, of the wider plan’s Greek segment.

The country’s newly elected conservative New Democracy government must still clarify, to the European Commission, whether it supports the inclusion of the entire Greek-Cypriot-Israeli project, or just the Crete-Cyprus-Israel segment, on a new PCI list being prepared by the EU body. The previous Syriza government’s energy ministry supported the latter, taking national control of the domestic Crete-Athens section.

The energy ministry intends to forward a letter, officially expressing its position on the matter, within the next few days, sources have informed.