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Alexandroupoli infrastructure offering regional gas-hub potential

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Gas infrastructure being planned and developed at Alexandroupoli, on the edge of northeastern Greece, offers potential to establish this provincial city as a regional gas hub in southeast Europe that will facilitate gas trade and shape regional gas prices.

Gas quantities of between 20 and 30 bcm are expected to be attracted to the region by FSRUs, gas pipelines and a vertical pipeline corridor, covering the wider region.

However, the effort to establish a gas hub in this specific region faces many challenges. Besides bringing in large gas quantities and offering competitive prices as well as high liquidity, all needed to lure players from other hubs and neighboring markets, the region also requires a major reinforcement of the transport system, along with a significant increase in the capacity of the recently launched Greek-Bulgarian IGB gas pipeline.

The absence of a gas hub in southeast Europe and the prospective accumulation of quantities up to 30 bcm in Alexandroupoli offers great potential for the provincial Greek city, as was pointed out by a leading energy ministry official during last weekend’s launch of a new power station in the area.

Attracting significant gas quantities to the location is a first step. It must be followed up by the establishment of a gas spot market in Greece, one capable of increasing interconnectivity in the southeast European market.

Greece promises to serve as an entry point for the aforementioned natural gas vertical corridor, to run through Bulgaria, Romania, Hungary, Ukraine and Moldova.

This project, to utilize existing infrastructure combined with new infrastructure, will incorporate the Trans Balkan Pipeline, which transported Russian gas to southeast Europe via Ukraine for thirty years and is now set to operate with gas flow in the opposite direction.

PPC takeover of ENEL Romania would establish utility in region

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Power utility PPC has entered exclusive talks with Italy’s ENEL for the acquisition of the latter’s portfolio in Romania, a lucrative prospect offering networks in three Romanian regions, three million customers in the country’s retail electricity market, 550 MW in RES projects already operating, as well as 2,000 MW in RES projects at an advanced stage.

Completion of the deal would take PPC to another level and establish it as a regional force in southeast Europe’s energy market.

Market experts have put a price tag of between 1.3 and 1.4 billion euros on the possible deal.

Late last night, PPC and ENEL signed a confidentiality agreement obliging ENEL officials to only discuss a possible deal with PPC, which is conducting due diligence until January 23, in preparation for a deal that appears increasingly likely, as long as the two sides can agree on a price.

ENEL controls Romanian networks in the Muntenia region, surrounding Bucharest, the industrial zone of Timisoara, as well as Dobrota’s tourism section. The three networks offer a total capacity of 16 TWh.

PPC business plan well received by US, European funds

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Power utility PPC’s business plan has been well received by major international funds at a London roadshow co-organized by the Athens bourse and Morgan Stanley and involving 29 Greek companies, ten of which are from the energy sector.

PPC’s administration has held over 30 meetings with American funds such as Sandglass and Manulife, as well as European funds, including the UK’s Senvest, Polygon and TFG Asset management, which were informed on PPC’s business potential. Emphasis was placed on decarbonization, new RES projects, growth prospects in foreign markets, and digitization.

The meetings have included one-on-one meetings between PPC’s chief executive Giorgos Stassis and CEOs of foreign funds, who were offered detailed presentations of PPC’s business plan.

Some of these funds are already familiar with PPC’s activities and objectives, while others have only just begun showing interest, either through thoughts of purchasing company shares or participation in two PPC bond issues, a 775 million-euro bond maturing in 2026 and a 500 million-euro bond maturing in 2028.

PPC, emerging from the energy crisis unscathed and implementing its business plan without deviations, despite the challenging international environment, expects its EBITDA figure this year to reach between 800 and 900 million euros, approximately the same as last year, with a similar or improved performance next year.

PPC’s business plan foresees investments worth 9.3 billion euros over the next four to five years, 55 percent of the investment sum in renewable energy, 20 percent in electricity distribution networks, 7 percent in conventional energy sources, 4 percent in waste-to-energy production, and 3 percent in retail energy.

In geographical terms, 85 percent of PPC’s investments are planned for within Greece, the other 15 percent planned for the Balkans, primarily in Romania and Bulgaria.

PPC plans to invest 2.3 billion euros in 2023, 2.5 billion euros in 2024, 1.7 billion euros in 2025 as well as 2026.

These investments are expected to contribute to Greece’s improved energy self-sufficiency, reducing electricity imports to 10 percent in 2026 from 18 percent in 2020.

 

 

PPC up against three big funds for Enel Romania acquisition

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Power utility PPC is up against strong competition from three major funds handling capital worth hundreds of billions of euros for the acquisition of Enel Romania, a subsidiary of the major Italian energy group Enel, sources have informed.

Enel Romania has been placed for sale as its parent company wants to reduce its net debt figure.

PPC has been scouring neighboring markets for almost a year now, looking for opportunities to expand beyond Greece and establish a geostrategic position in the region.

The southeast European energy market is attracting major international investment interest as Balkan countries have plenty of potential for RES growth and also promise to serve as a new energy corridor in Europe.

Canadian fund Brookfield, handling over 750 billion euros in capital and globally present with investments in renewables, infrastructure, real estate and social security funds, is believed to be one of the funds PPC is up against for Enel Romania.

The UK’s Amber Infrastructure, handling over 10 billion euros in capital, primarily in infrastructure, has been named as another potential buyer of Enel Romania.

Enel’s debt figure surged to 70 billion euros in September following energy crisis measures taken by the Italian government, an extraordinary tax, and increased natural gas orders for coverage of customer needs.

Enel aims to cut its debt by roughly 21 billion euros through the sale of assets in countries such as Romania, Argentina and Peru.

 

PPC eyeing Balkan RES buys, 500-600 MW, as next big move

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Power utility PPC, eyeing a big renewable energy move in the Balkans, is considering five different RES portfolio acquisitions in Romania and the Balkans, believed to represent a total capacity of 500 to 600 MW.

If carried out, these prospective deals, worth millions, would represent one of PPC’s biggest investments in recent years.

The Balkan acquisitions being examined by PPC concern solar, wind and other RES technologies in Romania as well as mature portfolios held by European corporations such as Enel and Siemens Gamesa, plus a variety of prospects in Bulgaria.

PPC’s examination of these investment prospects is believed to have reached an advanced stage.

The power utility has also made clear its intentions for the acquisition of a major vertically integrated group in the Balkan region, without revealing any further information.

Such moves would help PPC subsidiary PPC Renewables achieve its RES portfolio target for 2023, set at 1.5 GW.

PPC’s role in the energy crisis, offering crucial support to households and businesses under pressure, has held back a number of company plans, including takeovers abroad.

PPC’s liquidity, €3.6bn, ‘crisis tool’; Ptolemaida V ‘trial run in October’

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Power utility PPC’s company plans are being adjusted on a daily basis as a result of changing market conditions in the energy crisis, but the corporation’s liquidity, at 3.6 billion euros – 2.197 billion euros in cash reserves and 1.444 billion euros in secured credit availability – stands as a protective weapon amid the uncertainty, chief executive Giorgos Stassis has told analysts during a presentation of PPC’s second-quarter results.

PPC’s net debt on June 30, 2022 was 2.245 billion euros, while PPC faces expiring debt payments worth 220 million euros in 2022, 543 million euros in 2023, and 1.015 billion euros in 2024, for which payment deadlines of 600 million euros can be extended by a year, Stassis informed.

The majority of PPC’s debt, 67 percent, has fixed interest rate terms, while 33 percent of the company’s borrowing is ESG-linked, the chief executive added.

PPC’s new Ptolemaida V power station, to be launched as a lignite-fired power station before eventually converting to natural gas, is expected to undergo a trial run in October, ahead of a scheduled launch in January, Stassis noted.

PPC is pushing ahead with investments in renewable energy, the company’s portfolio of RES facilities under construction or ready to undergo construction at 394 MW, the chief executive informed, adding that RES projects representing a further 4 GW are practically assured.

Company news concerning acquisitions is soon expected from Romania, possibly within the next few months, the chief executive noted.

IGB moves close to launch, ICGB consortium certified

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The Greek-Bulgarian IGB gas pipeline has moved a step closer towards its launch, expected around the end of this month, following the completion of a certification procedure for the ICGB consortium behind the project.

The European Commission, according to information made available, has approved a certification application submitted by the Greek Regulatory Authority for Energy, RAE, and its Bulgarian counterpart, EWRC.

Greek Prime Minister Kyriakos Mitsotakis and Bulgarian leader Kiril Petkov will both attend the project’s inauguration ceremony in Komotini, northeastern Greece, this Friday, ahead of the project’s commercial launch towards the end of the month.

The two leaders are expected to highlight this project’s contribution to the EU’s ongoing effort to end the continent’s reliance on Russia’s Gazprom.

The IGB gas pipeline will offer an alternative natural gas route into Bulgaria, initially via the TAP route and, from autumn onwards, through Greece’s gas grid. From 2023, the IGB will serve as a gateway for LNG imports from coastal FSRUs in the region. LNG quantities will reach Bulgaria, Romania, even Ukraine, through pipeline interconnections.

Alexandroupoli FSRU development launch today, pivotal project

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Development of the Alexandroupoli FSRU in Greece’s northeast, a project promising to boost energy security by broadening energy source diversification for Greece and the wider Balkan region, is scheduled to officially commence today.

The prime ministers of Greece and Bulgaria, as well as Serbia’s president, will attend today’s official ceremony. The leaders will highlight the need for energy source diversification in the Balkans and reduced reliance on Russian natural gas.

The Alexandroupoli FSRU promises to establish Greece as a gas hub for transportation of LNG into the EU.

Natural gas consumption in southeast Europe totals between 10 and 11 bcm annually, half this amount provided by Russia.

The Alexandroupoli FSRU, expected to be ready to operate by the end of 2023, is planned to offer a capacity of approximately 5.5 bcm, greatly diversifying gas supply to southeast Europe.

The project is budgeted at 380 million euros, of which 166.7 million euros will be provided through the National Strategic Reference Framework (NSRF).

The Alexandroupoli FSRU will be linked with Greece’s gas grid via a 28-km pipeline, enabling gas supply to Greece, Bulgaria and the wider region, including Romania, Serbia, North Macedonia, Moldavia and Ukraine.

 

Revythoussa FSU 12-month rental or permanent solution

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Greek authorities are making comparisons in preparation for a choice between an FSU one-year rental and a permanent floating storage unit at the Revythoussa LNG terminal as part of a plan to boost the country’s gas storage capacity ahead of next winter.

A decision for a capacity boost at the Revythoussa LNG terminal, with the addition of a fourth unit, has already been reached, highly ranked energy ministry officials have informed. A competitive procedure will be staged for the contract.

The option of renting an FSU for the Revythoussa LNG terminal, a facility operated by DESFA, the gas grid operator, would take approximately two months to complete, sources said.

This solution would make operations at the Revythoussa LNG terminal more flexible as it would enable unloading of two LNG orders simultaneously, instead of just one, as is the case at present.

A disruption of Russian gas supply to the EU would force all member states to try and secure additional LNG shipments.

The second alternative, entailing the installation of a permanent floating storage unit at the Revythoussa LNG terminal, would require more time to complete without offering any additional advantages, compared to the FSU rental, energy ministry officials noted.

Officials at RAE, the Regulatory Authority for Energy, are comparing market data such as domestic gas demand projections, and also considering Revythoussa’s prospects for a bigger role as a natural gas gateway for neighboring countries. Bulgaria and Romania are already using the Revythoussa terminal for LNG imports.

Sweden’s OX2 buys 500-MW RES portfolio, eyeing further moves

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Swedish company OX2 has acquired wind and solar energy projects in Greece with a total capacity of 500 MW, a development that serves as a reminder of the steadily growing interest of European and international investors in the country’s RES market.

OX2 already possesses an extensive past in the Greek market, having collaborated with local companies to develop RES projects offering a total capacity in excess of 4 GW, the Swedish company has pointed out.

Further details on the deal’s seller, or sellers, have not been disclosed, but it is understood OX2’s acquisition concerns projects that are currently at different stages of development in various parts of Greece.

The Swedish company is preparing to assemble a team in Greece comprised of personnel from the Greek market as well as employees already with the company, sources have informed energypress.

OX2 plans to also examine further investment opportunities in the Greek market and is eyeing offshore wind farm, energy storage and hydrogen-related investments, a top-ranked company official has told energypress.

“Greece is a very interesting market for OX2. Approximately 20 percent of energy consumed is imported and 15TWh of lignite-fired power will be replaced by 2028,” noted Paul Stormoen, chief executive officer at OX2. “The country has strong sources, serious prospects for development of green energy projects, and plans to install over 5 GW in solar units and more than 3 GW in wind units by 2030. OX2 is aiming for a long-term presence and can accelerate the energy transition by utilizing its high expertise in the development of RES projects,” he continued.

Last year, OX2 formed subsidiaries in Romania and Italy and also developed a solar energy hub in Spain. The company is active in ten European markets.

 

South Kavala UGS tender’s final round not until early summer

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The final round of privatization fund TAIPED’s tender for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north will not be held until early this summer following a latest deadline extension by RAE, the Regulatory Authority for Energy, on consultation regarding the facility’s business pricing framework, sources closely following the project’s developments have informed energypress.

Prior to this deadline extension, the overall procedure was delayed by several months as a result of a disagreement between RAE and gas grid operator DESFA over supplementary investments that would enable the country’s grid to cater to the needs of the UGS.

Consultation for UGS pricing framework proposals and other details, including DESFA’s ten-year development plan, was to expire on March 14, but RAE has offered participants an extension until March 30.

It is believed RAE’s text forwarded for consultation has been deemed far from satisfactory by prospective investors. If no changes are made, the tender could fail to produce a result, despite its long duration.

Such a prospect threatens to leave Greece as Europe’s only country without a single UGS for many years to come.

Elsewhere, EU member states are rushing to fill their UGS facilities ahead of next winter, following an order issued by the European Commission as part of a plan to drastically reduce Europe’s reliance on Russian gas.

The EU has a total of 170 UGS facilities, offering a total capacity of 4.2 trillion cubic metres. Germany tops the list with 60 facilities that represent 42 percent of the continent’s UGS capacity. France follows with 16 UGS facilities, Italy has 13 functional facilities and 7 under construction, while Romania has 8 UGS facilities and Bulgaria one.

 

 

Europe’s south wants wholesale price to reflect energy mix cost

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Greece will align with a French proposal for wholesale electricity prices as a reflection of energy-mix cost, not energy exchange levels, a stance to be adopted by countries of Europe’s south, at a council meeting of European energy ministers today.

France will join forces with Greece, Italy, Romania and Spain, Barbara Pompili, Minister of Ecological Transition, has informed ahead of today’s session, for their presentation of a joint proposal to the EU 27 for wholesale electricity market reforms.

The proposal’s objective will be to offer consumers better protection against excessive price increases as well as stability through the energy transition period.

It remains unclear how the French-led proposal will be received by other EU member state representatives.

Europe’s north, better equipped to handle adverse market conditions as a result of more diverse energy mixes and numerous grid interconnections, enabling greater flexibility, has been less affected by the energy crisis and, subsequently, is not under pressure to seek market reforms.

However, governments around the continent are feeling growing pressure as wholesale price levels appear to be establishing themselves at higher levels, impacting inflation rates around Europe, latest Eurostat figures for November have shown.

In Greece, wholesale electricity prices have held steady at record-breaking levels above 260 euros per MWh over the past few days.

Foreign institutional investors hold 50% of PPC for first time

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Power utility PPC is entering a new era following yesterday’s completion of the corporation’s equity capital raise, which lowers the Greek State’s share in PPC below 51 percent, to 34 percent, for the first time in the utility’s 70-year history. Foreign institutional investors now hold an overall 50 percent stake in PPC, up from 27 percent, while domestic stakeholders have a 16 percent share.

Greek governments will no longer be able to do as they please with PPC. Issues concerning management, policies, strategic decisions and new hirings will now require the approval of foreign investors at the general shareholders’ meetings. The Greek State will remain influential with its 34 percent stake.

The corporation’s new equity line-up promises to transform PPC into a far more efficient corporation capable of achieving more favorable terms in capital markets.

The Covalis and Zimmer funds, among the new multinational stakeholders, specialize in utility investments. Wellington is regarded as a highly selective fund, more so than Blackrock, also part of PPC’s new equity line-up.

PPC easily achieved its 1.35 billion-euro target through the equity capital increase. The business plan, approved on the eve of the equity capital increase, envisions investments worth 8.4 billion euros between 2022 and 2026, but the amount is now seen rising to 9.3 billion euros. Investments are planned in renewables, networks, Balkan investments and waste management.

More than half the sum of new investments, or 55 percent, is planned for the RES sector, both in Greece and abroad. A further 20 percent is planned for distribution networks, 7 percent for conventional energy sources, 4 percent for waste-to-energy units and 3 percent for retail concerns.

Geographically, 85 percent of PPC’s new investments will be made in Greece, and 15 percent in the Balkans, primarily in Romania and Bulgaria.

PPC makes waste-to-energy plans, RES moves worth €2bn in Balkans

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Power utility PPC plans to develop waste-to-energy plants and also make RES investments in the Balkans worth two billion euros, a bulleting attached to the corporation’s ongoing equity capital raise, offering an update on the board’s strategic plan, has revealed.

The book building process, which began yesterday, will run until Thursday. Investors anticipate that PPC will enter new circular economy activities and also expand its green interests beyond Greece’s borders.

PPC expects to raise 1.35 billion euros through the equity capital raise, which will partially fund the corporation’s ambitious 5 billion-euro investment plan covering 2022 to 2024.

The power utility had initially announced a plan to enter the waste-to-energy sector in 2020 and is now reviving this part of its strategic plan.

This plan is in line with the overall national policy for waste management, developed in response to condemnation by European institutions of Greece for the country’s uncontrolled landfill management.

The power utility is expected to adopt advanced waste-to-energy technologies used in Europe’s north for the development of units making minimal environmental impact.

As for renewable energy, PPC has planned investments worth two billion euros between 2022 and 2026. Of this total, 820 million euros is planned to be invested between 2022 and 2024 and 1.11 billion euros from 2024 to 2026, according to the equity capital raise’s bulletin.

These sums are expected to be used for RES portfolio acquisitions. PPC is aiming for a green portfolio of 7.2 GW by 2024 to include extensive investments in the Balkans. Bulgaria and Romania are being targeted as markets of major potential.

 

PPC: EBITDA green exposure to 39%, Balkan investments

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Power utility PPC’s chief executive Giorgos Stassis, in an extensive update to analysts following the announcement of a 750 million-euro equity capital increase plan, described the utility of the future as a radically transformed company to be primarily based on green energy production.

Stassis, who was addressing approximately 120 analysts, noted that the equity capital increase plan’s timing reflects current opportunities for PPC as well as the country’s needs.

Besides takeover opportunities in Balkan markets and RES sector investments that will help Greece achieve its energy and climate plan objectives, the country will also decrease its exposure to energy imports at fluctuating price levels, according to the chief executive.

The equity capital increase, Stassis noted, will enable PPC to carry out an 8.4 billion-euro investment plan by 2026, its objectives including the installation of RES units with a total capacity of 9.1 GW.

The utility has set an objective for a green-related EBITDA exposure of 39 percent by 2026, up from 17 percent at present.

PPC’s push for greater Balkan presence is planned to begin with projects in Romania and Bulgaria.

Romania’s RES market is growing at an annual rate of 8 percent, the country’s objective being to reach an installed capacity of 6 GW by 2030. Bulgaria’s RES market is growing at an even greater rate, 15 percent. The neighboring country’s objective is to have installed a further 3 GW by 2030.

 

PPC planning equity capital increase, big funds involved

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Power utility PPC will proceed with a 750 million-euro equity capital increase, effectively a partial privatization coming twenty years after a previous round at the bourse that will result in a decrease of privatization fund TAIPED’s current stake in the company from 51 percent to 34 percent.

The company administration’s step back for a minority share, plus management, aims to maximize the participation of foreign institutional investors, who, along with local investors, are expected to easily cover the equity capital increase’s financial demands.

US, British and northern European funds are among the interested parties, private talks held over the past six months, at least, have indicated, energypress sources informed.

Blackrock, EBRD, Fidelity, Apollo, Carmignac, Twenty Four AM, Bluecrest, Pictet, Union Investments, Sona Asset Management, Barings, Aperture, Saba Capital and Vontobel are funds that could be involved, it is believed.

The equity capital increase paves the way for the influx of capital that will contribute to PPC’s 8.4 billion-euro investment plan until 2026, currently ranked as the most ambitious in the Greek market.

Besides the installation of RES units with a total capacity of 8.1 GW, PPC also aims to branch out into the Balkans, beginning with projects in Romania and Bulgaria.

Romania’s RES market is growing at an annual rate of 8 percent, the country’s objective being to reach an installed capacity of 6 GW by 2030. Bulgaria’s RES market is growing at an even greater rate, 15 percent. The neighboring country’s objective is to have installed a further 3 GW by 2030.

PPC eyeing Bulgaria, Romania, Serbia for RES investments

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Power utility PPC is looking to make its next major investment moves in the neighboring countries of Bulgaria, Romania and Serbia, solar energy and hydropower projects being a priority.

RES activity has soared in these three countries over recent years and is expected to continue.

PPC, which has not taken any investment initiatives abroad in quite a few years, anticipates it will be ready to announce details on major-scale solar farm projects in these countries towards the end of the year.

Bulgarian officials are making plans for 2.64 GW in new RES installations by 2030, of which 2.2 GW will concern solar farms, according to the country’s ten-year climate plan.

In Romania, the country’s 2030 projection is for investments reaching 5.2 GW in wind farm investments and approximately 5 GW in solar farms.

Serbia, possibly offering the biggest green energy investment opportunities among these three countries, will need between 8 and 10 GW in RES investments to replace coal-fired generation with a capacity of 4.4 GW by 2050, deputy energy minister Jovanka Atanackovic recently announced.

A first round of wind and solar project auctions is planned to take place in Serbia by the end of this year.

A month and a half ago, a partnership involving PPC and international contractor Archirodon advanced to the second round of a tender staged in North Macedonia for construction and operation of a major hydropower plant, Cebren, budgeted between 500 and 600 million euros and with a capacity between 333 and 458 MW.

PPC will continue to pursue this Cebren contract but its main focus will be on Bulgaria, Romania and Serbia and their solar energy project opportunities, sources informed.

 

 

EastMed alliance broadens, eight countries express support

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Support for the EastMed pipeline, planned to transport natural gas from offshore Levantine Basin gas reserves in the southeast Mediterranean to Greece and further into Europe, is growing in numbers with an initial Greek-Israeli-Cypriot alliance promoting this project now joined by five additional partners, Bulgaria, Romania, Hungary, Serbia and North Macedonia.

Energy ministers representing these eight countries forwarded a letter of support for the EastMed project to the European Commissioner for Energy Kadri Simson late last week, Greece’s energy and environment minister Kostas Skrekas has told local media.

The pipeline, to be developed by IGI Poseidon SA, a 50-50% joint venture between Greek gas utility DEPA and Italian gas utility Edison, is planned to cover a 1,470-km distance.

IGI Poseidon plans to develop EastMed all the way to Italy via Cyprus, Crete, the Peloponnese, mainland Greece and Epirus, the country’s northwestern flank.

This latest move, bringing the eight energy ministers together for the joint letter, was initiated by Skrekas, Greece’s energy minister, sources informed, following an initiative taken two months earlier by his Israeli counterpart Yuval Steinitz to organize a joint virtual conference involving ministers of all eight countries.

In their letter to Simson, the EU energy commissioner, the eight ministers highlight the importance of EastMed, noting the project promises to contribute to the wider region’s energy security and offer benefits to consumers as a result of increased competition and reduced natural gas price levels.

Regional gas interconnections, including the Greek-Bulgarian IGB, Bulgarian-Serbian IBS, Bulgarian-Romanian IBR and the Romanian-Hungarian IRH would be utilized to extend EastMed’s reach, the letter notes.

Greece and North Macedonia are currently planning a new gas pipeline interconnection whose Greek segment is being promoted by gas grid operator DESFA.

Greece, Israel eyeing broader alliance for Balkans, central Europe

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The Greek-Israeli energy alliance is broadening its scope by aiming for the establishment of a Greek gateway to facilitate Israeli gas supply to the Balkan region and, by extension, central Europe.

This objective, part of strong diplomatic relations between the two countries in energy, was confirmed during a recent virtual meeting between Greece’s newly appointed energy minister Kostas Skrekas and his Israeli counterpart Yuval Steinitz.

Their bilateral talks will be followed up by broader meeting today to involve the energy ministers of Greece, Israel, Cyprus, Serbia, Bulgaria, Romania, North Macedonia and Hungary.

The participating officials will seek to lay the foundations for a closer energy alliance that would facilitate distribution from Israel’s Leviathan gas field via alternate routes – the Alexandroupoli FSRU and the IGP – to soon be offered by Greece.

The aforementioned Balkan and central European countries are extremely keen on securing alternative supply routes, diplomatic sources informed.

Much work is needed by Israel and Greece to establish energy alliances with Balkan countries, but a first step will seemingly be taken today.

PPC scouring southeast Europe markets for opportunities

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Power utility PPC, on a mission, in recent months, to seek investment opportunities in neighboring countries, is carefully planning its first expedition abroad after some time.

Although PPC’s new three-year business plan does not specifically reference investment plans abroad, the company’s interest in other markets has become apparent.

PPC is striving to become a modern corporation and market leader in southeast Europe by 2030, the power utility’s chief executive Giorgos Stassis told a Bloomberg event late last week.

Potential projects on the corporation’s radar include North Macedonia’s Cebren hydropower facility, a 500-600 million-euro project for which PPC has entered a tender with Archirodon as its partner, and, further ahead, RES investments.

Establishing oneself as a dominant player in the southeast European market is a major challenge as highlighted by the participation of ten consortiums, big names included, in the Cebren hydropower plant tender, the latest following a total of ten preceding procedures for this project, all fruitless.

A proportion of PPC’s 1.1 billion-euro EBITDA target for 2023 could be generated by business activities beyond Greece.

The power utility has assembled a working group tasked with scouring foreign-market opportunities in all sectors, including hydropower, photovoltaics, other RES technologies, project tenders, as well as acquisitions.

PPC has made a series of unsuccessful investment quests over the past 18 years, beginning with Romania’s privatization tender, in 2003, for electricity distributors Electrica Banat and Electrica Dabrogea. PPC had advanced to this procedure’s second round but ultimately lost to Italian powerhouse Enel.

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

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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

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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

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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

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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

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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

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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

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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

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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

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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.