Gas market competition intensifies, TAP lowering prices

Competition has intensified in the country’s wholesale gas market at a time of changing conditions and negotiations for 2021 deals between importers and major-scale consumers, namely electricity producers and industrial enterprises.

Many gas supply contracts expired at the end of 2020, requiring a large number of players to renegotiate deals. Some of these big consumers have already reached new agreements with gas wholesalers.

Market conditions have changed considerably compared to a year earlier. Supply of Azeri gas through the new TAP route has already begun to Greece as well as Bulgaria, increasing overall supply, which has obliged, and permitted, gas utility DEPA to pursue a more aggressive pricing policy as the company pushes to absorb quantities it has committed to through clauses in existing contracts.

Also, the TAP-related increase of gas supply to Bulgaria, combined with this country’s inflow of Russian gas through oil-indexed price agreements, currently relatively cheaper, is now depriving Greek wholesale gas companies of entry into a neighboring market that was available for trading activity last year.

Furthermore, conditions have also been impacted by a competition committee decision no longer requiring DEPA to stage gas auctions to make available a share of its gas orders to rival traders. This measure was introduced and maintained to help liberalize Greece’s gas market.

The new conditions are pushing Greek traders towards more competitive pricing policies. They appear to have acknowledged that their profit margins will be narrower in 2021.

DEPA, helped by the fact that a sizeable proportion of its gas purchases is oil-indexed, is said to be playing a dominant role in the ongoing negotiations for new contracts with customers.

It should be pointed out that, unlike rival gas importers such as Mytilineos, Elpedison and Heron, all benefitting through self-consumption of a large part of their gas orders for gas-fired power stations they operate, DEPA does not self-consume.

Prometheus Gas, a member of the Copelouzos group, remains a formidable player, while the power utility PPC and petroleum company Motor Oil are less influential in the wholesale gas market.

Higher LNG prices, compared to pipeline gas, will decrease demand for LNG this year and weaken the interest of traders for LNG supply through gas grid operator DESFA’s Revythoussa terminal on the islet just off Athens. Last year, this facility was a hot spot of trading activity as a result of lower-priced LNG.

Target model decision needed in 2021, Elpedison chief points out

The new year will demand a decision from authorities and market participants on whether a true target model for the electricity market is desired, Nikos Zahariadis, chief executive at Elpedison, has pointed out in an article published by energypress as part of a feature on 2021 prospects.

The market was caught by surprise during the launch of the new electricity market in the final weeks of 2020, the official pointed out. Balancing market costs rose sharply during this period.

Most authorities and participants were expecting a different development, including a solution for the market’s chronic “missing money” problem, as well as a drop in retail electricity prices, Zahariadis noted, expressing belief that the new year will present an opportunity, even for the unprepared, to adjust to the new conditions that will ultimately enable the new energy market to operate without restrictions and showcase its advantages.

However, the new market, even when it has matured and stabilized, will still pose threats, especially for players seeking to keep distinctly separate retail and production portfolios, as protection against price manipulation has stopped functioning since the launch of the target model, he pointed out.

Looking towards the future, a gradual prevalence of the RES sector is discernible, as long as economically feasible energy storage technology is developed, Zahariadis projected. Until then, the grid will rely on natural gas-fueled power stations, the only flexible solution available at present, he added.

As for the natural gas sector, two unrelated events late in 2018, the first being an expansion at the Revythoussa LNG terminal facilities that enables bigger tankers to dock, and the second, a drop in LNG prices, have brought about permanent change in the Greek market, the Elpedison official noted.

Market players responded swiftly with LNG imports, prompting gas price reductions along with concurrent electricity price reductions. Also, the first steps were taken towards the establishment of a Balkan hub for transboundary LNG sales, Zahariadis noted.

More gas market opportunities will be offered in 2021 through the TAP project’s functioning, the company official pointed out.

Elpedison has played a leading role in sector developments, capitalizing on opportunities by importing significant LNG amounts and capturing a key position in the wholesale gas market, Zahariadis added.

The completion of equipment procurement tenders for a new 800-MW combined cycle power station, a project that will enable Elpedison to double its production as of 2023 and gradually increase sales to higher levels, stands as the company’s biggest challenge in the new year, he noted.

Incoming LNG shipments down sharply, prices rise globally

LNG shipments into Greece are headed for a quieter period following heightened recent trading activity that put this energy source at the domestic sector’s forefront in the first half of 2020, overshadowing pipeline gas supply.

Latest activity indicates a swing in favor of pipeline gas, now favorably priced.

Last November, 18 tankers docked at gas grid operator DESFA’s Revythoussa LNG terminal just off Athens, bringing in a total amount of 1.5 million cubic meters of LNG, well over the schedule for this coming November, limited to three tankers booked for a total of 355,000 cubic meters.

Activity at the Revythoussa terminal was also subdued last month. Four LNG tankers brought in a total quantity of nearly 300,000 cubic meters.

LNG prices at the Dutch gas trading platform TTF, one of Europe’s biggest hubs, have risen constantly, as is the case internationally, following a dip in July.

Analysts believe rising demand in Asia, especially China, will make up for anemic demand in Europe and push LNG prices even higher as winter approaches.

Pipeline gas supply is expected to reassert its position in Greece.

DESFA one step away from Alexandroupoli FSRU entry

Just days after the entry of Bulgaria’s Bulgartransgaz, Greek gas grid operator DESFA appears set to become the fifth member of Gastrade, the company established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal envisioned for Greece’s northeast.

Talks concerning a DESFA entry, ongoing since the beginning of this year, have essentially concluded, while an announcement of the operator’s entry into Gastrade’s line-up is expected soon, no later than the end of September, energypress sources informed.

DESFA’s interest to join the consortium for the Alexandroupoli FSRU project, the first ever private-sector plan for such infrastructure in Greece, reflects the intention of the company’s new ownership and administration to broaden DESFA’s role from gas grid operator to a major player in Greece’s natural gas market.

As for Gastrade, keen to establish partnerships that support its strategic objectives, DESFA’s expected entry into the Alexandroupoli FSRU consortium appears to have been encouraged as a result of the operator’s knowhow, as a TSO, in LNG and the Greek gas market, its players, as well as the legal framework.

DESFA’s entry would also give the Greek State a stake in the Alexandroupoli project, supported for years by the previous and current Greek governments.

Besides the Copelouzos group, holding a 40 percent stake, the Gastrade consortium is currently also made up of Gaslog, Greek gas utility DEPA, and Bulgartransgaz, each holding 20 percent stakes. The entry of a fifth member will give all partners equal 20 percent shares.

The project, budgeted at 380 million euros, is expected to be launched no later than early 2023.

The Alexandroupoli FSRU, along with the existing Revythoussa islet LNG terminal just off Athens, are crucial given the current strains in Greek-Turkish relations as the two units represent the country’s only gas infrastructure not relying on Turkish territory.

The LNG terminals also promise to increase competition in the regional market and reduce natural gas supply costs to neighboring countries.

A market test was successfully completed for the Alexandroupoli FSRU in March.

PPC triggers options for 2021 gas orders from DEPA, Prometheus Gas

Power utility PPC has activated options to extend, by an additional year, its 2020 gas supply contracts with gas utility DEPA and Prometheus Gas, a joint venture involving the Copelouzos group and Russia’s Gazprom, for respective gas orders of 2 million MWh and 2.5 million MWh, according to sources.

PPC expects to require a total gas amount of between 17 million and 18 million MWh for its electricity generation needs in 2021, unchanged compared to the estimate for this year.

A nine-year gas supply agreement between PPC and DEPA securing the power utility approximately 11 million MWh of gas, annually, expires at the end of this year. As a result, PPC will need to reshape its gas supply policy from scratch.

The gas supply prices secured by PPC through its aforementioned one-year contract extensions with DEPA and Prometheus Gas are roughly 8 to 9 percent lower compared to the prices of the power utility’s long-term agreement with DEPA.

The cost of PPC’s additional one-year gas order from DEPA is believed to be about 30 million euros, while the 2021 order from Prometheus Gas is estimated to be worth 36 million euros, sources said.

Early this year, PPC purchased additional gas amounts totaling 4.5 million MWh from DEPA and the Copelouzos group, through a competitive procedure, to primarily cover needs at its Aliveri and Megalopoli power stations.

PPC is also covering this year’s gas needs through supplementary LNG orders. The power utility has so far brought in three shipments of 2 million MW each, and may order a further 2 million MWh in the second half.

Natural gas market forecasts for 2021 remain hazy. RAE, the Regulatory Authority for Energy, has yet to determine the manner in which slots will be distributed at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens. In addition, the sale of DEPA Commerce, a new DEPA entity established for the gas utility’s privatization, is expected next year.

 

Authorities, market players to discuss LNG terminal’s slot reservation rules

The latest developments of a plan aiming to revise slot reservation rules at gas grid operator DESFA’s LNG terminal on the islet Revythoussa just off Athens will be discussed between authorities and market players at a one-day conference planned by RAE, the Regulatory Authority for Energy, for this Thursday.

A latest proposal delivered by DESFA to RAE as part of consultation will serve as the basis of the discussion.

The new slot-reservation formula being worked on for the Revythoussa terminal will aim to maximize LNG shipments to the facility while also restricting time slots registrations made by traders purely for the sake of protecting gas market shares.

Power utility PPC and Motor Oil were both left off the Revythoussa facility’s unloading plan for 2020 after failing to secure slots amid conditions of heightened demand.

Authorities want to avoid a repeat of such a situation. PPC and Motor Oil had used the LNG terminal a year earlier.

Participants at this Thursday’s event will be offered the opportunity to present observations before Revythoussa rules are revised and implemented for next winter.

The event should offer LNG importers a clearer indication of the terminal’s new rules before ordering plans for 2021 are pursued. As has been the case this year, LNG demand is also expected to be elevated in 2021.

Wholesale electricity prices rising, up to €47.30/MWh today

Wholesale electricity prices, determined by the System Marginal Price, are rebounding following a significant drop over the past few weeks.

The rise is being fueled by an anticipated increase in demand. A sidelined 600-MW line linking Greece with Bulgaria, depriving the system of electricity imports via this route, as well as a disruption in operations at an Elpedison power plant in Thessaloniki are two other contributing factors.

In addition, the Revythoussa LNG terminal just off Athens is not under any pressure, a factor subduing gas-fired unit bids and subsequently lowering the SMP.

Based on grid orders placed for today, the SMP has climbed to 47.30 euros per MWh, up from a level of around 30 euros per MWh five days earlier and 14.20 euros per MWh on May 1. Bidding by units has gradually risen since early May.

Demand, today, for domestic consumption and exports is estimated to reach 127 GWh, 40 percent of which is planned to be covered by natural gas-fired power stations, 30 percent by RES and hydropower plants, 23 percent by electricity imports, and 7 percent by lignite-fired power stations.

The SMP level will be determined by gas-fired power stations for 22 hours today, lignite-based generation will shape the price for one hour and imports for the remaining hour.

Revythoussa at full capacity in May, 10 LNG orders scheduled

A total of nine LNG shipments are scheduled to be delivered to the Revythoussa islet terminal just off Athens in May, taking the facility to full capacity for yet another month, data provided by gas grid operator DESFA has shown.

Three LNG tankers are scheduled to bring in three big orders for a total of ten recipients in May.

The inflow has already begun. Last week, the Maran Gas Ulysses, a tanker belonging to the Aggelikousis group, imported 149,254 cubic meters for four buyers, Motor Oil, Heron, gas utility DEPA and Mytilineos, whose share, 74,627 cubic meters, was the biggest.

The next shipment, scheduled to be delivered to the Revythoussa terminal on May 20 by the Gaslog tanker belonging to the Livanos group, will deliver 147,710 cubic meters of LNG for Elpedison and power utility PPC, taking the bigger share of the two buyers, 127,031 cubic meters.

A third and final LNG shipment for the month is scheduled to arrive May 31 on the British Saphire tanker, owned by BP. This vessel will bring in 121,123 cubic meters of LNG for DEPA and Elpedison, the bigger of the two buyers with a 64,993 cubic-meter order.

A total of five big LNG shipments are expected in June for orders placed by Mytilineos, Elpedison and DEPA.

Continual flow of LNG imports reshaping gas market

LNG is continuing to enter the Greek market through gas grid operator DESFA’s Revythoussa terminal just off Athens at a continual and elevated flow that is reshaping the overall gas market.

The Mytilineos group was the market leader in the first quarter, capturing a market share of more than 40 percent of gas imported into Greece either via the Revythoussa LNG terminal or pipeline infrastructure.

Gas utility DEPA, a more subdued LNG player in the first quarter as a result of take-or-pay costs linked to the company’s pipeline gas orders with Russia’s Gazprom and Turkey’s Botas, registered a first-quarter market share of approximately 30 percent.

Elpedison, propelled by the increased use of its gas-fueled power stations, captured a higher share of 15 percent.

The Greek gas market’s remaining 15 percent was shared by Prometheus Gas, power utility PPC and Heron.

PPC’s gas market share is expected to increase over the coming months as it has placed LNG orders via the Revythoussa terminal.

 

Utilities prepare emergency coronavirus plan for energy security

The country’s energy utilities have prepared an emergency plan – comprised of alternatives – designed to ensure ongoing operations at strategically important energy facilities amid the coronavirus outbreak, now also a growing concern in Greece.

The emergency plan, prepared by leading officials at power utility PPC, power grid operator IPTO, distribution network operator DEDDIE/HEDNO, gas grid operator DESFA and gas utility DEPA, in agreement with the energy ministry, is designed to offer maximum coronavirus protection to personnel, especially staff employed at energy production and distribution management posts.

The plan includes three alert levels, mild, medium and pandemic conditions.

Preventive disinfection operations are being carried out at utility facilities. Emphasis is being placed on IPTO’s national and regional energy control centers, DESFA’s LNG storage station on the islet Revythoussa, off Athens, as well as PPC’s power stations.

The plan also includes shift replacements and personnel transfers in the event of coronavirus spreads within utility ranks, as well as secluded on-site accommodation for personnel at energy infrastructure locations and power stations.

Online preparations are also being made to enable headquarter-based personnel to work from home should the outbreak worsen.

Overall, preventive measures promoted by national health authorities are being applied.

Energy utility officials who took part in a related energy ministry meeting have assured government authorities that the country’s electricity and natural gas supply will remain uninterrupted.

 

DESFA wants stricter slot reservation rules for LNG terminal

Gas grid operator DESFA aims to significantly revise slot reservation rules for its LNG terminal on the islet Revythoussa, just off Athens, the operator’s objective being to prevent reservations of expediency made by traders purely interested in protecting their market shares by fending off other users from the facility.

A related proposal of new regulations, already forwarded by DESFA to RAE, the Regulatory Authority for Energy, will instead aim to support use of the LNG facility for actual market needs.

RAE will need to stage a public consultation procedure before the plan is finalized. DESFA hopes it will be ready and implemented by summer, giving companies enough time to assess the new rules for the LNG terminal before they make business plans for 2021.

Recent congestion problems at the Revythoussa LNG terminal left a number of companies without slots for 2020.

Slot reservation applications submitted by companies last year for 2020 represented a total capacity three to four times the size of Greece’s overall annual gas consumption.

Under the new rules, slot reservations are expected to be legally binding, committing applicants to all related costs.

Lawmakers behind the facility’s existing set of rules, shaped nearly a decade ago, viewed LNG as a supplementary fuel, but it has taken on a far more significant role in the Greek energy market over the past few years.

 

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.

Motor Oil wants Corinth FSRU included in DESFA 10-year plan

Petroleum group Motor Oil wants a prospective FSRU project for Corinth, west of Athens, included in gas grid operator DESFA’s ten-year plan, it has noted in a letter forwarded to RAE, the Regulatory Authority for Energy, as part of a related public consultation procedure.

A floating LNG terminal at Corinth would offer multiple benefits for the natural gas markets of Greece and the wider southeast European region and, therefore, must be included in DESFA’s ten-year plan, Motor Oil supported in its letter.

RAE has already awarded a license for the project but a decision concerning a future capacity commitment at this new national grid entry point has remained pending since last June.

The project is strategically important as a very large proportion of Greece’s current – and near-future – gas imports enter via Turkish territory, Motor Oil pointed out. The Corinth FSRU would further diversify Greece’s supply sources, without geopolitical risks or restrictions, as the facility will be able to absorb supply from anywhere in the world, the petroleum group added.

This FSRU would ease congestion at the existing Revythoussa unit off Athens and contribute to energy supply security, Motor Oil, operating a major refining facility in Corinth, also noted among other factors.

ESAI/HAIPP, the Hellenic Association of Independent Power Producers, has also expressed support for the Corinth FSRU, noting, in its letter, the facility would offer a new gas grid entry point, desaturate Revythoussa and help offer more competitively priced natural gas to the Greek market.

Rising LNG imports reshaping gas market, led by Mytilineos

The drastic reduction of LNG price levels in recent times has not only boosted the amount of LNG imports into Greece but also reshaped market shares held by domestic gas traders.

Last year, natural gas consumption rose to a new record level of more than 60 TWh, up from 52.4 TWh in 2018 and 53.7 TWh in 2017.

LNG imports rose sharply to 30.92 TWh in 2019 from 11.59 TWh in 2018 and 15.54 TWh in 2017.

Overall gas consumption increased by approximately 15 percent last year while LNG import levels nearly tripled compared to two years earlier.

For the first time ever, LNG represented half of the country’s total gas consumption in 2019.

In 2019, a total of six traders imported LNG to the Revythoussa terminal, close to Athens, some of these for the first time.

Mytilineos made the most LNG shipments for a 50.2 percent share. Gas utility DEPA followed with a 26.1 percent. Elpedison was next with a 12.4 percent market share, trailed by power utility PPC (7.6%), Heron (2.4%) and Motor Oil (0.4%).

Market leader Mytilineos imported a total of ten LNG shipments to the Revythoussa terminal in 2019, some of these originating from the US, via Shell and BP, managing US shale gas exports.

A total of six LNG shipments to Greece in 2019 carried American shale gas. This trend is continuing this year. A 140,000 cubic-meter shipment of American LNG arrived at the Revythoussa terminal on January 25.

Mytilineos also chartered large-scale Q Flex tankers to Revythoussa in 2019, a development enabled by the completion of upgrade work at the LNG facility.

The Q Flex tankers, built in Qatar and offering a 201,000 cubic-meter capacity, were previously unable to approach the Greek terminal.

 

Copelouzos, DEPA secure PPC gas supply deals for 4.5m MWh in 2020

The Copelouzos Group and gas utility DEPA have emerged as the winning bidders of a power utility PPC tender for gas supply to the latter in 2020 totaling 4.5 million MWh. The terms include an option for supply in 2021.

Besides the Copelouzos Group and DEPA, a third participant, Mytilineos, took part in the tender.

The Copelouzos Group has successfully bid to supply 2.5 million MWh of gas to PPC, while DEPA has taken on the other 2 million MWh needed by the power utility, energypress sources informed.

PPC is one of Greece’s biggest natural gas consumers. Its needs are expected to grow further as a result of the power company’s upcoming entry into Greece’s natural gas retail market, a move carrying ambitious targets. PPC also plans to enter the wholesale gas market.

PPC failed to secure capacity slots for 2020 at the Revythoussa LNG terminal, just off Athens, through a competitive procedure from November to earlier this month.

Success here would have enabled PPC to import LNG shipments in 2020, as the power utility had done in the previous year.

PPC now intends to bid for an LNG capacity at the prospective Alexandroupoli FSRU in northeastern Greece during a binding second-round market test expected following the festive season.

RAE to change LNG terminal rules following congestion

RAE, the Regulatory Authority for Energy, has decided to shape a new regulatory framework for gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, attributing recent congestion problems at the unit that have left companies without slots for 2020 to an outdated legal framework from 2011 no longer serving new market needs, energypress sources have informed.

The authority is expecting proposals from DESFA before it starts shaping a new regulatory framework for the LNG terminal. The new framework, whose details remain unknown, will not apply in 2020 but is planned for 2021.

Lawmakers behind the set of rules shaped nearly a decade ago viewed LNG as a supplementary fuel, but it has taken on a far more significant role in the Greek energy market over the past few years, the sources noted.

Stronger LNG demand expressed by major-scale consumers and energy groups has been driven by increased global LNG output and significantly lower prices compared to pipeline gas.

Companies left without slots on DESFA’s finalized unloading plan for 2020, just announced, will eventually secure places during the year as other qualifiers have overstated their slot requirements and will make resulting vacant capacities available, the sources said.

According to the finalized unloading plan, the Mytilineos group will import a total of 22 LNG shipments in 2020, beginning January 1, Elpedison has planned an equivalent number of shipments, gas utility DEPA has scheduled 14, including Algerian contracts, while Heron has scheduled five shipments.

Power utility PPC and Motor Oil Hellas, both importing LNG shipments through the Revythoussa terminal in 2019, have been left out.

 

No changes to LNG unloading plan for 2020, PPC, Motor Oil both miss out

Gas grid operator DESFA has announced a finalized unloading plan for 2020 at the Revythoussa LNG terminal without any changes to a temporary plan as participating players did not make any revisions to their initial requests for slots.

According to the finalized unloading plan, the Mytilineos group will import a total of 22 LNG shipments in 2020, beginning January 1, Elpedison has planned an equivalent number of shipments, gas utility DEPA has scheduled 14, including Algerian contracts, while Heron has scheduled five shipments.

Power utility PPC and Motor Oil Hellas, both importing LNG shipments through the Revythoussa terminal in 2019, have been left out of the facility’s unloading plan for 2020 as they failed to secure slots. Both companies have reacted firmly.

Players requesting bigger capacities are given priority, according to a DESFA formula, which remained largely unchanged, except for one revision, introducing tougher penalties for importers should they cancel capacity reservations.

Finalized unloading plan at LNG unit delayed by overdemand

An announcement of the Revythoussa LNG terminal’s finalized unloading plan for 2020 has been delayed until tomorrow by RAE, the Regulatory Authority for Energy, as a result of an unprecedented overdemand for capacity slots registered by importers.

Power utility PPC and Motor Oil Hellas, both missing out on places, according to an initial plan, have protested against such a prospect.

Participating companies were invited to submit their finalized bids on November 22 following the announcement of a temporary unloading plan. No changes were reported. This left PPC and Motor Oil Hellas off the plan without slots.

RAE, troubled by the resulting shortage of slots at the Revythoussa terminal, is looking for a solution, which prompted a deferral of the finalized plan’s announcement by gas grid operator DESFA, operating the LNG facility.

RAE has refused to approve the finalized plan and extended its announcement date to December 3.

Including PPC and Motor Oil Hellas on the unloading program for 2020 will be difficult to achieve without the cooperation of other firms, pundits noted.

The temporary unloading plan’s initial shape was determined through the application of standard rules and formula used by DESFA.

Players requesting bigger capacities are given priority, according to the current formula.

A sharp increase in slot requests, double the quantity compared to the previous season, has been registered for 2020.

Revythoussa LNG terminal congestion generates tension between rivals

Gas importers who appear to have failed to secure slots at gas grid operator DESFA’s Revythoussa terminal for 2020, due to congestion caused by high demand, are expected to react, initially through formal written complaints to RAE, the Regulatory Authority for Energy, and DESFA, and, if needed, escalated action at the Competition Committee.

A finalized list of Revythoussa slot reservations for 2020 is expected to be announced by DESFA today. A preliminary list announced last week prompted complaints by importers who failed to make the cut.

DESFA opted to give priority to importers preparing to ship in bigger LNG quantities. The sidelined importers will await the finalized list before taking any action.

As a result of the higher demand for Revythoussa slots, DESFA, following public consultation, decided to sharply increased a penalty rate for unfulfilled terminal capacity reservations, as has often been the case in the past.

PPC and Motor Oil Hellas, two market players who imported a number of LNG shipments through the Revythoussa terminal in 2019, are among the companies left off the list for 2020.

The two companies contend other importers have submitted reservation applications representing more than double their required amounts in 2019 and, as a result, will not fully use these slot capacities.

Four players made successful bids. Of these, just one importer requested slots for 2020 that represent an LNG quantity anywhere near its requirements for the current year, sidelined firms have complained. Slots have been intentionally overbooked by some players to sweep rivals aside, they added.

A total of 18 LNG shipments to Revythoussa were made in 2018. The current year is expected to end with 35 shipments, while the initial schedule for 2020 includes 120 shipments.

Elpedison makes dynamic gas market move for 2020, Balkans also eyed

Elpedison’s strong turnout for gas grid operator DESFA’s annual reservation of LNG slots at the Revythoussa terminal just off Athens highlights the company’s strategic decision aiming for a leading role in the wholesale gas market, which it entered last year.

Elpedison has reserved 22 slots, roughly one-third of a total of 65 slots offered by DESFA for the terminal in 2020.

Mytilineos, the country’s biggest LNG importer, also booked 22 slots. Gas utility DEPA reserved 14 slots, while Heron booked seven slots.

Elpedison considers its involvement in the wholesale and retail gas markets just as important as its activities in the electricity market, chief executive Nikos Zahariadis underlined in comments to energypress. Elpedison will bolster its gas market presence in 2020, he added.

Storage and gasification capacity increases at the Revythoussa LNG terminal have played an instrumental role in helping liberalize Greece’s gas market. This development, along with lower-priced LNG, compared to pipeline gas, has created market prospects and opportunities. Elpedison operates two gas-fueled power plants.

Besides the Greek market, Elpedison, just like all other corporate groups importing and trading gas, also sees opportunities in Balkan markets. The company already sells modest gas quantities in Bulgaria and Romania but is aiming for a significant increase in 2020.

Greece is developing into a gas hub for supply to the wider southeast European region, Zahariadis, Elpedison’s chief executive, noted. Major international gas infrastructure projects such as the TAP, IGB, Alexandroupoli FSRU and underground gas storage facility in the offshore South Kavala region are expected to be completed within the next few years, he stressed.

 

Lower LNG prices prompt terminal congestion fears

A considerably heightened interest for LNG imports, prompted by lower prices, has generated congestion concerns at gas grid operator DESFA’s Revythoussa terminal on the islet just off Athens.

Importers need to declare their LNG orders for 2020 by tomorrow, following a deadline extension of a few days.

The terminal slots to be requested by importers could exceed the LNG facility’s total capacity.

RAE, the Regulatory Authority for Energy, acting on a request made by DESFA, recently sharply increased a penalty rate for unfulfilled terminal capacity reservations, as has often been the case in the past.

The resulting cost for importers not following up on LNG capacity reservations with actual usage has been increased from 50,000 to 200,000 euros per day.

Some market officials preferring milder rules have requested the staging of auctions as a means of filling slots left vacant and imposing penalties on importers only if the auctions have failed to fill these capacity gaps.

Flurry of activity at Revythoussa LNG terminal over next two months

A flurry of LNG import activity planned through the Revythoussa islet terminal, just off Athens, in September and October, highlights the strong interest maintained by Greek energy companies in this energy source.

The country’s total of five players have all made arrangements to import large and small LNG shipments via Revythoussa during this two-month period, gas grid operator DESFA has announced.

Mytilineos has placed the biggest order, an LNG shipment of approximately 0.5 bcm, expected in October.

The second-biggest LNG order was made by gas utility DEPA, a 0.282-bcm quantity resulting from the utility’s long-running association with Sonatrach for Algerian supply.

Elpedison and Heron have each programed LNG shipments of 148,000 cubic meters, their respective arrivals scheduled for September 12 and 24.

Prometheus Gas has ordered 45,000 cubic meters of LNG for  September 27.

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.

Small-scale LNG dock plan promises wider prospects

A small-scale dock planned for the LNG terminal on Revythoussa, just off Athens, a notable feature listed on gas grid operator DESFA’s development plan for 2020 to 2029, promises to facilitate wider gas supply to new areas.

The project, budgeted at 30 million euros, would facilitate the use of LNG for shipping in the east Mediterranean, promising to establish Greece as a pivotal LNG bunkering and distribution hub in southeast Europe.

A final investment decision on the project, now at a maturing stage, is expected to be made this coming February.

The Poseidon Med II program, the EU’s multiannual financial framework for 2014 to 2020, a European Investment Bank (EIB) loan, and DESFA funds are expected to contribute to the cost of the project’s studies.

The gas grid operator has submitted an application for the multiannual financial framework to cover 50.93 percent of the project’s cost.

The new dock, planned to be developed at the Revythoussa facility’s northeastern end, will facilitate LNG loading onto small-scale transportation tankers with capacities of between 1,000 and 20,000 cubic meters.

The smaller of these tankers will provide refueling services to short-sea and deep-sea ships at Piraeus port, while the bigger tankers will supply LNG storage and distribution facilities at other ports around Greece and abroad.

The project is planned to be launched over two phases, the first in September, 2022 and the second in December, 2026.

New investments worth €132.2m included in DESFA 10-year plan

New investments worth 132.2 million euros have been included in gas grid operator DESFA’s updated ten-year development plan covering 2017 to 2026, which was approved by RAE, the Regulatory Authority for Energy, in February but has only just been released. The plan was forwarded for consultation by RAE back in October, 2017.

RAE’s approval was delayed by a number of projects, including a gas pipeline plan to link Greece and North Macedonia, as a result of a rival project proposal supported by Windows International Hellas, an enterprise controlled by Russian entrepreneur Leonid Lebedev.

RAE needed to decide on whether to endorse the DESFA or Windows International Hellas investment plan for this pipeline project. The authority ended up approving both. Windows International Hellas and DESFA will now need to contest the project’s contract.

A plan for a small-scale dock envisioned for the Revythoussa LNG terminal on an islet close to Athens, to service small vessels with LNG capacities of 1,000 to 20,000 cubic meters, has been deferred for inclusion into the 10-year program at a latter stage. RAE has requested a full plan from DESFA for this project’s development.

 

PPC gearing up for gas market entry, seeking alternative supply sources

The main power utility PPC is intensifying its efforts for a natural gas market entry as an alternative business activity in the wider energy sector to compensate for anticipated losses to result from its disinvestment of lignite units and electricity market share contraction, both required by the bailout agreement.

“The natural gas market is changing rapidly. We also want to enter the retail gas market,” PPC’s chief executive Manolis Panagiotakis told a parliamentary committee yesterday.

The PPC boss made clear the power utility’s intentions to look for alternative supply sources, beyond the gas utility DEPA. An older nine-year supply agreement with DEPA expires on December 31, 2020.

“We are already preparing ourselves for the period beyond the [current] DEPA agreement,” Panagiotakis informed. “LNG has arrived and Azerbaijani gas will soon also be here. We, too, want to connect with these sources. That’s our strategy,” he added.

PPC has also made arrangements to utilize the upgraded LNG terminal on Revythoussa, an islet just off Athens.

PPC ranks as one of the country’s biggest natural gas consumers. The power utility is expected to consume 15.7 million MWh of gas in 2019 to fuel four power stations, Aliveri V, Megalopoli V, Lavrio IV and Komotini. The corporation also requires gas amounts to begin trading in the country’s retail gas market.

 

Mytilineos orders American LNG, energy hub role seen

The country’s second ever American LNG shipment, a 170,000-cubic meter order placed by Mytilineos that represents the first to be made by a private-sector company, is scheduled to dock at the Revythoussa islet terminal just off Athens on February 1.

A follow-up LNG order by a private-sector company would soon be made, a highly-ranked US diplomat told local media yesterday, adding the emergence of US gas in the wider region via Greece and the Revythoussa terminal carries a significant geostrategic dimension.

The arrival of American gas here reflects Washington’s vision of Greece as a prospective energy hub, the official noted, underlining the energy sector was a key matter in bilateral talks between the two countries last month.

The Mytilineos group has played a key role in ensuring the Greek grid’s sufficiency from early January, when temperatures around the country began dropping, until today, the scheduled arrival date of a new DEPA gas utility order from Algeria.

Over the past fortnight, crucial energy injections by the Mytilineos group into the Greek system have helped cover record-breaking levels of electricity demand.

The DEPA and Mytilineos LNG orders represent a change of dynamics in Greece and constitute a market reality, the US diplomat asserted.

 

 

Domestic natural gas consumption strikes new high of 290,000 MWh

Natural gas consumption in Greece struck an all-time high yesterday to reach 290,000 MWh from a previous high of 260,000 MWh set in 2017. The new record was driven by full-capacity operations of electricity producers and natural gas companies.

Gas consumption is expected to remain high today, estimates putting the figure at 270,000 MWh.

Energy market authorities have assured the country does not face any energy security concerns, noting the important sufficiency roles played by the Revythoussa LNG terminal’s increased gasification capacity and the increased ability of the Kipous gas grid interconnection in Evros, at Greece’s northeastern tip, to cover the country’s needs through inflow measuring 48,000 MWh per day.

Despite the reassurances, Greece’s grid has been stretched to its limits over the past couple of days. The country’s lignite and natural gas-fueled power stations have needed to operate at full capacity to meet the elevated electricity demand – along with crucial hydropower, electricity import and RES injections during peak hours.

Highlighting the system’s strain, the main power utility PPC’s lignite-fired power station, still operating despite the expiration of a European Commission time limit, is among the facilities contributing to cover the higher electricity demand.

 

RAE: Market interest needed to develop Greece-Fyrom pipeline

Sufficient market interest will be needed if a natural gas pipeline linking Thessaloniki and Fyrom (Former Yugoslav Republic of Macedonia) and an LNG bunkering facility on the islet Revythoussa, just of Athens, are to be developed, RAE, the Regulatory Authority for Energy, has noted in response to a ten-year gas system development plan (2017-2026) submitted by gas grid operator DESFA.

RAE offered its conditional approval of DESFA’s plan for the Thessaloniki-Fyrom pipeline, a project budgeted at 48.7 million euros, as long as market test, including binding capacity reservation offers, is previously conducted.

As for the Revythoussa LNG bunkering facility plan, the energy authority acknowledged the project could be required in the future as a result of the shipping LNG market’s anticipated growth, while noting DESFA has yet to submit a complete plan and feasibility study supporting its sustainability.

A decision on the induction of this project into DESFA’s ten-year plan will be reached once a comprehensive plan has been submitted, RAE added.

DESFA is looking at developing an LNG bunkering facility to serve the refueling needs of vessels with capacities ranging from 1,000 to 20,000 cubic meters.

RAE also approved a plan for the development of a natural gas compressor station needed for the gas system’s hydraulic stability once the TAP pipeline, running through northern Greece, begins operating.

DEPA placing extra LNG order for bigger Revythoussa terminal

Gas utility DEPA is making arrangements with Algeria’s Sonatrach for a considerable additional LNG order to fill a new third storage tank at the upgraded LNG terminal on the islet Revythoussa, just off Athens, once the facility’s imminent commercial launch is staged.

This LNG shipment, entailing part of a 130,000-cubic meter order, comes as an addition to scheduled deliveries for the winter season’s heightened demand.

DEPA is now awaiting the LNG terminal’s launch, which has been delayed by a few weeks, to proceed with its extra Sonatrach order. The gas utility is keen to move ahead with the order as soon as possible to avoid any price fluctuations in the European energy market, currently volatile.

According to latest estimates, the upgraded Revythoussa terminal is expected to begin operating – commercially – in the second half of December, despite a preceding official launch ceremony, planned for November 22.

The terminal’s new storage tank will offer a 95,000-cubic meter capacity, boosting the facility’s overall capacity to 225,000 cubic meters. The upgrade promises to create new gas export potential to Balkan and southeast European markets.

According to a study conducted by Greek gas grid operator DESFA, the new Revythoussa terminal will be able to cover 30 percent of gas import needs in the Balkans, Slovenia and Hungary.

The US is currently seeking European gateways for shale gas exports. Besides catering to American gas trading interests, the upgraded Revythoussa terminal could, in the medium term, also facilitate gas quantities stemming from rich Cypriot and Israeli sources in the east Mediterranean.