Local gas-fueled generation up in response to high-cost power imports

Higher electricity prices in neighboring countries, increasing the cost of electricity imports, have prompted power utility PPC to capitalize on the situation and operate its gas-fueled power stations at maximum capacity for satisfactory market prices.

In recent days, PPC’s natural gas-fueled units have covered between 35 and 40 percent of electricity demand.

Yesterday, the power utility’s gas-fueled power stations covered 40 percent of electricity demand at a price of 42.6 euros per MWh for ten hours.

Independent producers covered 19 percent of electricity demand at a price of 64.4 euros per MWh for one hour.

Electricity imports covered 14 percent of electricity demand for a price of 51.7 euros per MWh over 11 hours.

Renewable energy sources covered 24 percent of electricity demand yesterday, while the decreased lignite input continued on its downward trajectory, contributing 3.6 GWh.

In Bulgaria, the wholesale electricity price was 53.14 euros per MWh. In Italy, it was 51.93 euros per MWh. Romania registered a price level of 51.7 euros per MWh. The price in Serbia was 49.91 euros per MWh.

Alexandroupoli FSRU investment decision later in ’20

Investors behind the Alexandroupoli FSRU are expected to make final decisions on the project’s development in the final quarter of this year.

Two pending issues, the completion of a regulatory framework for the project, as well as approval by the European Commission’s Directorate-General for Competition of the project and funding via the National Strategic Reference Framework (2014-2020), are expected to be resolved by the final quarter.

Also, RAE, the Regulatory Authority for Energy, is soon expected to reach a preliminary decision exempting the FSRU from compulsory access to third parties as well as tariff adjustments every three to four years. This decision, needed for the project’s regulatory framework, is expected by late October or early November, when the European Commission’s approval is anticipated.

The Directorate-General for Competition will also need to give the green light for NSRF funding.

Once these pending issues are all resolved, investors will be able to decide on the project’s development, expected to require two years to construct. Investors envision a launch in 2023.

Yesterday’s anticipated entry of Bulgartransgaz, for a 20 percent stake, highlights the project’s regional prospects. This regional dimension will be highlighted even further if ongoing Romanian interest is materialized.  Talks that have been going on for some time were disrupted by the pandemic.

For the time being, Greek gas utility DEPA, Gaslog and Bulgartransgaz each have 20 percent stakes, while the Copelouzos group holds a 40 percent share. The entry into the project of Gastrade, as a fifth partner, remains pending.

Most crucial for the project’s prospects, a market test completed in March showed that the Alexandroupoli FSRU is sustainable. The test prompted a big response from Greek and international gas traders, who placed capacity reservation bids for a total of 2.6 billion cubic meters per year.

US interest for LNG supply via the Alexandroupoli FSRU is strong. Last year, Cheniere sold a big shipment to Greek gas utility DEPA, while a further ten American shipments have been made so far this year.

Alexandroupoli FSRU market test offers total 2.6 bcm, viability assured

Binding capacity reservations for the prospective Alexandroupoli FSRU in northeastern Greece, whose second-round market test expired on Tuesday afternoon, amounted to 2.6 bcm, a tally that secures the project’s sustainability and paves the way for a finalized investment decision, energypress sources have informed.

Two Greek utilities, gas company DEPA and power company PPC, are among the participants who have reserved capacities, for long-term periods, the sources noted.

Bulgaria’s Bulgartransgaz and a Serbian company also confirmed earlier requests for capacity reservations.

Romania’s Romgaz did not turn up for the market test’s second round after expressing interest for a considerable capacity covering a lengthy period in the first round. Instead, two private-sector Romanian trading companies ended up submitting binding offers for Alexandroupoli FSRU capacities.

The Bulgarian, Serbian and Romanian interest highlights the potential of the Alexandroupoli FSRU to serve as a new natural gas gateway for southeast European markets, via the Greek-Bulgarian IGB pipeline, now under construction, as well as other existing and planned gas pipelines in the region.

IPTO: Thessaloniki RSC headquarters for southeast Europe in July

A Regional Security Coordinator (RSC) role for Thessaloniki planned by Greek power grid operator IPTO with its Romanian and Bulgarian peers, Transelectrica and ESO-EAD, respectively, will be ready for launch, from its headquarters in the northern Greek city, in the first week of July, energypress sources have informed.

IPTO chief executive Manos Manousakis has declared the headquarters for southeast Europe’s RSC will be in Thessaloniki.

The Thessaloniki RSC plan was established by the Greek, Romanian and Bulgarian operators following years of negotiations with ENTSO-E, the European Network of Transmission System Operators for Electricity.

According to EU law, all European operators must, as of 2020, hand over a list of responsibilities to one regional security coordinator with headquarters at an EU member state.

These responsibilities include capacity calculation coordination, common network model development and regional security coordination.

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.

 

EDEY to drum up Greek oil, gas hopes at Italy, Romania events

Spurred by recent significant gas field discoveries at Cypriot and Egyptian offshore blocks and the favorable prospects these have generated for the wider region, top officials at EDEY, the Greek Hydrocarbon Management Company, will be looking to attract major foreign investors to new Greek blocks at two industry events in Italy and Romania.

EDEY chairman Yiannis Basias, who is in Ravenna, Italy today to attend the Offshore Mediterranean Conference & Exhibition, a leading industry event, will be exploring the potential interest of oil majors, including Italy’s ENI, for new offshore blocks in the Ionian Sea and off Crete to soon be licensed out.

EDEY chief’s deputy Spyros Bellas will follow up this effort in Bucharest at the Balkans & Black Sea Cooperation Forum, scheduled to take place April 4 and 5.

Tristan Aspray, ExxonMobil’s Vice President of Exploration for Europe, Russia, and the Caspian, hailed the wider region’s prospects at the recent Delphi Economic Forum in Greece. ExxonMobil is currently involved in exploration work being carried out in Romania.

Speaking earlier this month at London’s Global APPEX (Prospect & Property Expo), an event organized by the American Association of Petroleum Geologists (AAPG), Bellas, EDEY’s deputy, presented a road map of Greece’s hydrocarbon plans for 2019 to officials of foreign companies as well as latest and more detailed geological data on the Ionian Sea and Cretan regions. This data was processed by Norway’s PGS.

The strategy adopted at EDEY is to plan tenders for offshore blocks based on the interest expressed by foreign investors at this series of meetings.

Besides ENI and ExxonMobil, EDEY is seeking to convince Repsol, Shell and other US majors of Greece’s hydrocarbon prospects.

 

 

Balkan countries working on EU protective solidarity arrangements

EU member states are working on forming and signing solidarity arrangements to offer wider crisis prevention plans against electricity and natural gas supply abnormalities by December 1, based on an EU regulation issued last November.

These arrangements are intended to protect consumers and infrastructure against energy shortage threats raised by emergency conditions as a coordinated European effort rather than a series of national plans, seen as too limited to counter threats with broader implications.

RAE, Greece’s Regulatory Authority for Energy, has been tasked with heading the wider arrangement’s Balkan group, coordinating the protection plans of Greece, Bulgaria and Romania.

The solidarity arrangements are seen as a necessary form of protection in emergency situations given the interactive nature of electricity and natural gas markets, especially neighboring markets.

The solidarity arrangements will enable EU member states affected by natural gas and electricity supply problems to seek support from neighboring countries.

According to the EU regulation, gas supply sufficiency priority will be given to households, telethermal facilities and key social services such as hospitals.

In the plan’s most recent regional development, Greek and Bulgarian energy regulatory and energy exchange officials, as well as system operators representing the two neighboring countries, held a meeting early last month to establish a road map with an objective to bridge their electricity markets.

The crucial role of energy as a link promoting stability, economic growth and competition-related potential, ultimately offering mutual benefits to energy consumers of both countries, was reiterated at the meeting, according to participants.

Engie imports gas from north for Heron, Gazprom not involved

France’s Engie has emerged as a new supplier of natural gas to the Greek market through the country’s northern gateway following a gas auction co-staged yesterday by DESFA, Greece’s natural gas grid operator, and its Romanian and Greek counterparts, to offer capacities available at the Romanian-Bulgarian and Bulgarian-Greek gas grid interconnections.

Engie secured a pipeline capacity at the jointly held auction to import natural gas into Greece for electricity generation by the energy firm Heron. Engie, which holds a 25 percent stake in Heron, has been active in Romania’s energy market, especially natural gas, for a number of years.

Though the amount to be imported by Engie, 1,500 MWh per day over a year, is modest, it represents yet another gas import agreement through Greece’s north that does not involve Russia’s Gazprom.

The agreement is competitively priced, compared to Gazprom’s offers, energypress sources informed.

Besides an import agreement involving DEPA, the Greek gas utility, and Gazprom, Russian gas is also imported into Greece through the northern gateway by Prometheus Gas, a joint venture of the Copelouzos Group and Gazprom Export. Prometheus Gas has captured a 20 percent share of the Greek market. The Mytilineos group also imports, buying directly from Gazprom.

The gas amount to be brought into the Greek market by Engie covers the pipeline capacity that was available at the Romanian-Bulgarian interconnection. The capacity at the Bulgarian-Greek interconnection was considerably bigger, amounting to 7,500 MWh per day over a year.

The pipeline capacity offered by the Greek, Bulgarian and Romanian gas grid operators at yesterday’s auction represented an amount that needed to be offered to third parties, according to EU regulations. The auction represented the first ever act of collective trans-boundary trade involving the three countries.

The EU has applied pressure on member states to utilize interconnections and diversify their sources of supply.

 

 

Pivotal IGB project one step closer towards actualization

This week’s approval by RAE, the Regulatory Authority for Energy, of guidelines set for the IGB (Interconnector Greece-Bulgaria) project’s second-round market test, entailing the submission of binding offers by interested parties for pipeline capacity, brings the project one step closer to its actualization.

The project’s development is scheduled to begin within the second half of this year, while its launch is planned for early in the second half of 2018, assuming no more delays hamper the process, as has been the case in the past on the Bulgarian side.

The IGB will feature a 182-kilometer pipeline, 31 kilometers of which will cross Greek territory, running from Komotini, northeastern Greece, to Stara Zagora in Bulgaria, as well as supportive facilities such as metric stations and an operation center.

The project will have an initial capacity of 3 billion cubic meters per year, while provisions will be made for an increase to 5 billion cubic meters per year, if needed, through the installation of a compressor station.

The project will facilitate transportation of natural gas to Bulgaria via various sources, through Greece, with reverse-flow operations available.

According to ICGB AD, the project’s consortium, nine non-binding expressions of interest – for a total capacity of 4.3 billion cubic meters per year from Greece to Bulgaria and roughly one billion cubic meters per year from Bulgaria to Greece – were submitted last April during the market test’s first stage.

The nine firms were Bulgargaz, DEPA (Greece’s Public Gas Corporation), Edison, Socar, Noble Energy, Gastrade, OMV Petrom – the Romanian subsidiary of Austria’s OMV – as well as two Bulgarian distribution companies, Citygaz and the Black Sea Technology Company.

A final investment decision on the IGB’s development will be made once binding offers are submitted, as this stage will determine the project’s sustainability.

The IGB represents the first segment of the “Vertical Corridor” to initially connect the Greek, Bulgarian and Romanian natural gas grids. At a latter stage, this stretch may be extended to reach central European grids, such as Austria’s. The IGB will also facilitate a prospective floating LNG station in Alexandroupoli, northeast Greece.

The prospective gas hub in Alexandroupoli also stands to provide favorable conditions for the utilization of a depleted gas deposit in the Gulf of Kavala as an underground natural gas storage facility.