Fluctuating fuel prices paint volatile picture, gasoline nears €2 per liter

Fluctuating crude oil prices in international markets have shaped a very volatile domestic fuel market, the instability raising gasoline prices to more than 2 euros per liter on a number of Greek islands, which has prompted questions as to whether such levels will spread to pumps  throughout the country.

Two key developments have unsettled suppliers and consumers, the first being further EU sanctions imposed on Russian petroleum products, to come into effect February 8. The latest measure will ban Russian oil exports to the EU. Brussels is also examining a price cap for Russian oil sold to non-EU members.

A second factor making impact concerns China’s return to energy markets following the country’s departure from a zero-Covid policy and whether the subsequent increase in Chinese demand will lead to shortages.

Analysts have remained indefinite on the possible effects of both these factors.

According to Greece’s monitoring center for liquid fuel prices, unleaded gasoline rose by 0.076 euros per liter between January 1 and January 29, to 1.918 euros per liter.

The rise in heating fuel prices in Greece was steeper, escalating by 0.162 euros per liter during the same period to reach 1.301 euros per liter. A government subsidy cut on heating fuel was the main factor behind this price increase.

The price rise for auto diesel was milder, increasing by 0.026 euros per liter, to 1.821 euros per liter, between January 1 and January 29.

Refineries have begun reducing their wholesale fuel prices as a result of a recent de-escalation in international prices, since January 20, to be passed on to the domestic retail market in coming days. But the duration of this price de-escalation remains unknown.

Greek-Bulgarian MoU for oil pipeline likely in February

Greece and Bulgaria are likely to sign a Memorandum of Understanding in Athens next month for the development of an oil pipeline to run from Alexandroupoli in Greece’s northeast to Burgas, on Bulgaria’s Black Sea coast, sources have informed.

If so, a joint Greek-Bulgarian working group would soon commence work on a new study for the project, unchanged at many sections, compared to an original plan.

However, contrary to the original plan, the pipeline will flow in the opposite direction to supply oil from Greece to Bulgaria.

This project promises to further upgrade the geopolitical significance of Alexandroupoli, a prospect not embraced by Turkey as the pipeline would reduce the geopolitical importance of the Bosphorus Strait.

The Alexandroupoli-Burgas oil pipeline, to cover a 260-km distance, equally divided between Greece and Bulgaria, is planned to have a 24-inch diameter and capacity of 10 million tons.

Oil will be transported to Burgas’ Lukoil refinery, which will need a capacity boost from 7 to 8 million tons at present to 10 million tons.

The revised oil pipeline plan appears to have the backing of the EU and the USA, as part of Europe’s wider effort aiming for an end of its reliance on Russian fossil fuels.

Officials estimate work on the Alexandroupoli-Burgas oil pipeline will begin in one to two years for a possible launch in three to four years’ time.

 

 

Copelouzos: Alexandroupoli FSRU to transport gas to Ukraine

Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal now being developed in Greece’s northeast, will also install an additional FSRU unit at the location, the group’s chief, Dimitris Copelouzos has asserted in comments to media, noting the facility will be capable of transporting natural gas to Ukraine.

According to sources, the Copelouzos group has already held preliminary talks with officials of the embattled country on the prospect of natural gas supply from Greece’s northeast.

A second Alexandroupoli FSRU is expected to be completed in 2025, as an addition to the first terminal at the location, now nearing completion.

The Copelouzos group chief, asked by journalists on the route to be used for transporting natural gas to Ukraine, responded: “Via the pipeline that is now empty,” a reference to the Trans Balkan Pipeline, which transported Russian gas to Greece through the Sidirokastro entry point in the country’s northeast until early 2020.

This route was replaced by Turk Stream in early 2020 so that Ukraine could be bypassed.

The Trans Balkan Pipeline runs from Russia, crossing Ukraine, Moldova and Bulgaria, before branching out to Greece and Turkey.

Investments, including compressor stations in Bulgaria, will be needed to fully utilize the capacity offered by the Trans Balkan Pipeline, sources pointed out.

Natural gas prices tumble to 12-month low, crucial period still ahead

European natural gas prices tumbled to 65 euros per MWh yesterday, a new 12-month low last reached in mid-January, 2022, prior to Russia’s invasion of Ukraine.

The price drop has been attributed to mild European winter conditions, so far, that have flattened demand and kept the continent’s energy storage facilities 84 percent full, well above the level recorded a year ago and approximately 30 percent higher than the average level recorded over the past five years.

Analysts insist European market conditions remain fragile, despite the favorable price trajectory of natural gas so far this winter. A sudden change of weather conditions, combined with a complete disruption of Russian gas supply to Europe, could spark a new round of price volatility and deplete European gas reserves by the end of winter, analysts have warned.

The European energy market, experts have long pointed out, will face its toughest test in spring, when EU member states will begin efforts to refill their gas storage facilities in preparation for the winter of 2023-2024.

This refilling period could once again spike natural gas prices to levels of 120 euros per MWh, analysts have noted. Russian pipeline gas supply is expected to be considerably lower in spring, while the LNG market, on which Europe now greatly depends, is expected to be tight in spring.

A worst-case scenario for Europe would combine a complete disruption of Russian natural gas supply with an increase of LNG demand in the Chinese market. Such a combination would prompt a natural gas shortage estimated to reach as much as 57 billion cubic meters, or 15 percent of projected demand.

PM hopeful of a European gas price cap agreement

Prime Minister Kyriakos Mitsotakis, on his way to today’s Council summit of EU leaders, expressed hope that a European agreement on a gas price cap could be achieved either today or next Monday, the latest, when the EU’s energy ministers are scheduled to meet.

The Greek leader stressed it is absolutely essential that Europe sends a clear message to energy markets as well as to Russia by underlining that Moscow’s exploitation of natural gas as a tool to burden European citizens and businesses will not be tolerated.

“We are close to being able to impose a price cap on gas. Our arguments are now known to all member states and I believe that, one way or another, we will find the necessary majorities to move in this direction,” Mitsotakis noted.

Greece supports the implementation of a gas price cap at 200 euros per MWh or less, applicable at all European hubs with an accompanying limit-up mechanism. Though well below the European Commission’s initial proposal of 275 euros per MWh, it seems to have gained increased acceptance by fellow EU member states.

However, a group of six EU member states – Germany, Austria, the Netherlands, Denmark, Estonia and Luxembourg – remains skeptical, fearing a low-level price cap could prompt market instability.

“In any case, regardless of European decisions, the Greek government is continuing to take all measures needed to support Greek households and businesses,” Mitsotakis noted, pointing out that 900 million euros in state budget money will be used in December to support low-income households and offer allowances for heating oil purchases.

New household gas connections plunge 50%, energy crisis prompts hesitation

The number of households connecting to the gas grid has fallen by roughly 50 percent since mid-2021, many residential consumers now hesitant to make the switch as natural gas has lost its appeal amidst the energy crisis.

Consumer hesitation for new gas connections has been even more severe in the business category, where it has just about frozen.

Industrial consumers, too, have reduced their consumption levels of natural gas, turning, if technically possible, to alternative fuels such as diesel or LPG.

This overall downturn in the usage of natural gas is having a wider affect on the gas sector, impacting distribution network operators, gas companies as well as technicians specializing in the development and operation of gas-based facilities.

Even though supply of Russian gas to Greece has not been affected – Turk Stream, supplying the country via Turkey, has been operating continuously since the beginning of the Russian invasion of Ukraine – the possibility, alone, of a mandatory 15 percent reduction of gas usage should a heightened state of alert be triggered in Europe has led to reservations among businesses and residential consumers.

Natural gas prices have, for the time being, only remained competitive in Greece courtesy of generous subsidies offered to households by gas utility DEPA Commercial.

 

Big 2030 RES, energy storage target boosts for revised NECP

The energy ministry is preparing to set even more ambitious renewable energy and storage targets for 2030 through the country’s National Energy and Climate Plan, currently being revised as part of national and EU plans aiming to diminish reliance on fossil fuels, especially Russian natural gas.

The energy ministry is expected to set a total RES capacity target of between 25 and 30 GW for 2030, an objective that could be achieved with new wind and solar energy installations, as well as development of hydropower stations.

At present, RES facilities already operating in Greece offer a total capacity of 10 GW, meaning renewable energy projects producing an additional overall capacity of up to 20 GW will need to be developed over the next eight years if the energy ministry’s anticipated RES target boost in the revised NECP for 2030 is to be achieved.

Greece’s revised NECP will also include a major energy storage capacity boost to between 5 and 8 GW by 2030, well above the present target of 1.5 GW, through a portfolio comprising batteries and pumped storage stations.

Also, the 2030 target for the RES sector’s share of the country’s energy mix is expected to be increased to 80 percent from the current NECP target of 65 percent.

European wholesale market investigated for manipulation

The European wholesale energy market is being placed under the microscope for abuse and manipulation during the energy crisis.

ACER, Europe’s Agency for the Cooperation of Energy Regulators, is assembling a transboundary investigation team for this purpose, with assistance from the Austrian, Dutch and German regulatory authorities for energy.

These authorities intend to examine a series of cases suggesting speculative trading linked to the TTF benchmark and management of gas storage infrastructure, especially regarding transactions that involve Russia’s Gazprom.

As underlined in a relevant statement issued by ACER, high prices and high volatility in wholesale energy markets have prompted the European agency and national energy regulators to reinforce their monitoring in an effort to identify and sanction possible cases of market abuse.

Revythoussa LNG slot prices soar, driven by Balkan exports

Driven by LNG export potential to Bulgaria and the wider eastern European region, energy companies have submitted bids of between 3.5 and 4 million euros for slots at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens.

These bids, made at an ongoing DESFA auction offering slots for the next four years, are roughly three-and-a-half times higher than price levels recorded last year.

Two Bulgarian companies, Bulgargaz and Kolmar, as well as Greece’s power utility PPC and Motor Oil, were the winning bidders at the auction’s session yesterday, securing four of eight Revythoussa slots offered. The other four slots are expected to be taken by bidders today.

Earlier in the week, on Monday, gas company DEPA secured eight slots for 4 TWh, Mytilineos secured five slots for 5 TWh, as did and Bulgaria’s MET.

Greece’s recent transformation as a strategic gas exporter for the wider region has prompted a surge in demand for slots at the Revythoussa LNG terminal.

During the year’s first nine-month period, the country’s gas exports increased by 293 percent, representing over 20 TWh. Bulgaria was the main recipient. Greece has been covering the neighboring country’s gas needs for some months now, following natural gas pipeline disruptions from Russia.

 

ExxonMobil-Helleniq Energy seismic surveys off Crete

US oil and gas corporation ExxonMobil has been conducting seismic surveys under complete secrecy and at a rapid pace over the past week or so at two offshore block licenses, west and southwest of Crete, held with Helleniq Energy, formerly named ELPE, as its junior partner.

The two blocks share similar geological traits with Egypt’s giant offshore Zohr gas field and, according to early estimates, may contain rich natural gas quantities.

American presence is being assured, through ExxonMobil, in the southeast Mediterranean region at a particularly critical geopolitical period, both because of the Russian invasion of Ukraine and Turkey’s provocative moves against Greece (aggressive rhetoric and the Libya pact), political analysts told energypress.

ExxonMobil acted swiftly to increase its stake in a consortium holding licenses for the two offshore Cretan blocks following a recent  decision by France’s TotalEnergies to withdraw. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator.

The ExxonMobil-led seismic surveys off Crete, which began on October 24, are being conducted by Norway’s PGS and the company’s Sanco Swift seismic vessel. It is conducting 3D surveys, meaning ExxonMobil is focusing on specific areas for possible natural gas deposits.

International gas prices lowered by favorable conditions

More favorable market conditions of late have prompted a de-escalation of international gas prices, currently on a downward trajectory. This morning, the international price for natural gas reached as low as 107.355 euros per MWh, a new four-month low.

Market officials explained that LNG is currently available in abundance with some tankers unable to secure delivery destinations as Europe’s storage facilities are close to full.

At the same time, demand for Russian gas in Asia, primarily China – where Russia has turned to as a result of restricted exports to Europe – has fallen significantly. Mild weather conditions in Europe at present have helped contain demand for gas.

This gas price drop will not become fully apparent in the retail market until mid-November – unless a new price surge is experienced – as prices are set based on the previous month’s prices.

DESFA market test for gas grid lift includes 3 pipeline doubles

Gas grid operator DESFA has begun preparing a market test for prospective gas transmission system expansion projects, based on a requirement set by RAE, the Regulatory Authority for Energy, as part of its approval of the projects.

The market test’s details are expected to be completed by the end of this month. A related event will then be staged to update gas transmission system users on the market test’s process as well as projects to be offered for capacity reservations.

RAE’s market test requirement for these projects has been incorporated into its approval of DESFA’s ten-year development plan covering 2022 to 2031, as the authority wants the operator to gauge the level of interest and need concerning the gas transmission system’s expansion.

According to energypress sources, three new gas pipelines, to serve as doubles at sections of the existing infrastructure, will be included in the market test.

One of the three pipelines is planned to complement infrastructure covering parts of the wider Athens area, a second pipeline is envisaged as a double for a pipeline running from Athens to Thessaloniki, and a third pipeline is planned to run as a double alongside a line from Thessaloniki to Komotini, northeastern Greece.

The EU’s decision to gradually diminish its reliance on Russian gas is changing the continent’s gas supply map. Subsequently, gas entry points from the continent’s south are now becoming more crucial, giving rise to the need for gas infrastructure boosts in Greece.

 

Uncertainty, multiple thoughts ahead of EU ministers meeting

The EU’s energy ministers meet in Brussels today amid a climate of uncertainty, exacerbated by a barrage of energy-crisis proposals, inappropriate conditions for crucial decision making.

Today’s session comes in the wake of the European Commission’s rejection of a proposal by 15 EU member states for a universal price cap on gas. Many proposals have since emerged.

Brussels yesterday brought back a price-cap proposal for Russian gas. However, it is believed there is little chance of the EU-27 reaching consensus on this measure for two key reasons. Firstly, it is feared Moscow would be prompted to disrupt its European gas supply through all remaining pipelines, including TurkStream, which supplies Greece. Secondly, a price cap on Russian gas supply would represent a breach of contract, by European companies, of Gazprom’s supply agreements, experts have warned.

Other proposals that have been brought forth in the lead-up to today’s meeting of EU energy ministers include European agreements with major LNG producers; the establishment of an alternative to the TTF benchmark that would be connected to the American Henry hub; a price cap on gas used for electricity generation; a windfall tax on excess refinery earnings; a limit to electricity producer windfall profits; and a compulsory reduction of electricity consumption.

Regardless of the choices made and route taken, ordinary European citizens will be anxious to see a reduction in energy costs.

DEPA’s TotalEnergies LNG deal a break away from Russia, TTF

A gas supply agreement reached between DEPA Commercial and France’s TotalEnergies, securing, for the former, French LNG quantities totaling 10 TWh, nearly one-third of annual Russian gas supply, based on references prices not linked to the Dutch TTF hub, up to 90 euros per MWh more expensive than other hubs, paves the way for further agreements not connected to the TTF and Russian supply.

According to sources, DEPA Commercial is currently working on a strategic long-term LNG supply agreement with another major international player, once again using a pricing formula linked to a hub other than the TTF.

These moves are ensuring energy sufficiency for DEPA Commercial’s customers as well as the country, at competitive prices.

DEPA Commercial’s 10-TWh LNG agreement with TotalEnergies, which, according to sources, will result in supply from November until March next year, is equivalent to five months of Russian gas consumption in the Greek market.

The TotalEnergies amount should be enough to cover the country’s needs during this five-month period if Russia completely disrupts gas supply to Europe. In 2021, Greece’s gas imports from Russia totaled 35.37 TWh.

The Greek energy ministry’s leadership and DEPA Commercial officials are preparing for a trip to Azerbaijan, postponed three weeks ago, to seek an agreement for further gas quantities, at prices that are more competitive than the current Azerbaijani supply deal, DEPA Commercial’s most expensive.

 

 

Energy sufficiency fears rising, extra FSU may be required

The probability of a complete disruption of Russian gas supply to Europe, including the Turk Stream pipeline supplying Greece and other Balkan countries, is becoming increasingly likely, members of the country’s crisis management team have told energypress.

Over the past few weeks, energy operators have been staging more frequent simulated tests for the country’s electricity and natural gas systems in an effort to measure the extent of energy shortages that would result from a Russian decision to cut off all Gazprom supply routes to Europe.

The tests, according to sources, include rapid moves securing additional LNG cargo orders as replacements for Russian gas quantities.

An extra FSU at the LNG terminal on Revythoussa, the islet just off Athens, in addition to one just installed at the facility, cannot be ruled out at this stage, Athanasios Dagoumas, president of RAE, the Regulatory Authority for Energy, noted yesterday during a speech at the OT (Oikonomikos Tahydromos) Forum.

 

No EU decision seen today for cap on Russian gas prices

At least ten EU member states oppose singling out Russia for a cap on its gas prices, warning that such a move could push Russian president Vladimir Putin to cut supplies to Europe completely, the Financial Times has reported.

The EU countries opposing action against Russia, alone, including Greece, Italy and Poland, want caps on gas prices for all suppliers.

The lack of consensus on a gas price cap means that the proposal is not expected to lead to a decision at today’s emergency meeting of EU energy ministers.

“Quite frankly the Russians will probably retaliate on this,” Nikos Tsafos, chief energy adviser to Greek prime minister Kyriakos Mitsotakis, told the Financial Times.

“Europe should have a loud voice and impose a reasonable price,” said Italy’s energy transition minister Roberto Cingolani, saying he too preferred a general cap. “It is a perfect storm against our citizens and companies.”

Moscow has threatened to stop all gas supply to Europe should the EU impose a gas price cap. Russian gas supplies to the bloc have been cut by about 80 per cent to about 84mn cubic meters a day since the start of Russia’s invasion of Ukraine.

 

 

Worst-case natural gas scenario for Europe becoming a reality

The worst-case scenario for natural gas supply in Europe appears to be turning into a reality. If Russian gas supply to Germany via the Nord Stream I pipeline – now closed temporarily for repair work, according to Russia’s Gazprom – ends up being stopped, long term, the effects, skyrocketing prices and energy shortages, would swiftly spread across Europe.

The pipeline’s shut-off would leave no supply route unaffected, including Turk Stream, a key pipeline route for supply of Russian gas to Greece.

Greek government officials discussed concerns over such a scenario during a meeting yesterday at the Prime Minister’s office, while, on a wider level, the clouds are darkening over Europe, as Moscow appears increasingly likely to keep Nord Stream I shut off.

If so, Greece will need to activate its national emergency plan, whose measures include further LNG shipments, diesel conversion of natural gas-fueled power stations, and increased lignite power generation.

Even so, the national emergency plan may not suffice to fully cover the country’s energy demand should cold winter conditions be prolonged, a minister who took part in yesterday’s meeting at the Prime Minister’s office acknowledged to energypress.

In Greece, the wholesale price of natural gas rose sharply yesterday to 280 euros per MWh, impacting electricity prices.

Nord Steam I indefinite closure raises alarm in the EU

Gazprom’s announcement of a latest closure for the Nord Steam I gas pipeline, until further notice, a move that will significantly reduce Russia’s gas supply to Europe, has raised EU concerns to a new high.

In response, an EU crisis team will hold an emergency teleconference meeting today to assess new market conditions resulting from the closure, for an indefinite period, of the Nord Steam I gas pipeline, northern Europe’s main supply route for Russian gas.

Russian gas supply to Europe through Ukraine has already been severely limited.

New measures are likely to be agreed on, to protect EU energy security ahead of winter, at today’s EU crisis team meeting, including moves for energy rationing, seen as an inevitability if Nord Steam I remains closed for an extended period.

“The EU is now in the red zone as further demand reduction needs to take place,” said Thierry Bros, a professor in international energy at Sciences Po in Paris. He estimates an extra 3% of demand needs to be cut.

 

Key industrialists asked to cut down on energy consumption

Energy minister Kostas Skrekas has asked a group of leading Greek industrialists to reduce energy consumption at their production facilities as a means of greatly contributing to the country’s wider energy-crisis effort ahead of what could be a challenging winter, energypress sources have informed.

The minister’s request, a response to Russia’s latest closure of the Nord Steam I gas pipeline, which, according to Moscow, was necessary for repairs, represents the start of the government’s gradual implementation of an emergency plan that factors in the possibility of a complete cut in Russian gas supplies.

The energy minister met last Friday with three industrialists, Dimitri Papalexopoulos, chairman of the executive committee at Titan cement group, Nikolaos Stasinopoulos, president of Viohalco, and Evangelos Mytilineos, chairman and board of the directors at the Mytilineos group, whose subsidiaries include Aluminium of Greece.

The minister, through this initiative, is striving for energy savings of approximately 15 percent as the production facilities of the three industrial groups are the country’s biggest consumers of electricity and natural gas.

Implementation of the minister’s plan is expected to help prevent power cuts to households and businesses. The three businessmen were also asked, by the energy minister, to avoid incorporating job cuts into their energy saving strategies.

 

 

Lignite boost target dependent on futures of sidelined mines

Power utility PPC’s target of boosting its monthly lignite extraction from one million tons to 1.5 million tons, an increase that would enable lignite-fired power station grounds to be fully stocked with lignite reserves ahead of winter, can only be achieved if the futures of two lignite mines, Ahlada and Vevi, both in northern Greece’s Florina region, are cleared up.

Lignitoryhia Ahladas SA, the company to which two lignite mines, Ahlada 1 and Ahlada 2, were leased by the Greek State, was declared defunct by the energy ministry in July as a result of its failure to meet agreement terms, primarily lease payments.

This company, alone, could have provided PPC’s Meliti lignite-fired power station with up to 2.5 million tons of lignite, annually, meaning 1.5 TWh in electricity generation, nearly double this unit’s current limit of 0.8 TWh.

PPC is believed to be close to reaching a new mining agreement with a major private-sector energy firm for the Ahlada lignite deposits.

Greece needs to bolster its lignite reserves as an energy security measure should Russia, in a worst-case scenario, disrupt gas supplies to Europe. Approximately 40 percent of Greece’s electricity generation is gas-fueled.

PPC’s Meliti power station is currently fed by two other lignite sources, one privately owned by METE and, the other, a PPC mine at Mavropigi, in northern Greece’s Kozani region.

There have been no developments concerning Vevi, the Florina region’s other lignite mine, which is owned by the Greek State and has been sidelined since 2001. Reopening the mine after so many years of inactivity would inevitably develop into a lengthy procedure, sector experts have warned.

 

September LNG quantities lower but still considerable

Natural gas quantities to be shipped to the Revythoussa islet LNG terminal just off Athens will total 562,000 cubic meters in September, below the 609,000 cubic meters tallied in August, but equally important for the country’s energy sufficiency effort.

A total of six LNG tankers will moor at the Revythoyssa facility this month, bringing in 13 separate orders.

More specifically, Bulgaria’s MET energy has ordered four shipments for 104,000 cubic meters, Motor Oil is expecting one shipment carrying 36,900 cubic meters, Bulgargaz is awaiting two shipments for a total of 110,00 cubic meters, Mytilineos has placed an order for one shipment carrying 147,700 cubic meters, Elpedison has placed an order for three shipments totaling 62,00 cubic meters, and DEPA is expecting two shipments totaling 100,000 cubic meters.

These orders have been placed to support the country’s gas-fueled power stations during these challenging times, and also to cover energy needs in neighboring Bulgaria, which has stopped receiving Russian gas for some months now.

Bulgaria’s caretaker government is seeking to increase LNG quantities received through Greece to take advantage of the Greek-Bulgarian IGB pipeline’s upcoming launch, expected imminently.

The neighboring country is also in talks with Azerbaijan for increased imports. Sofia has not ruled out new gas supply negotiations with Russia’s Gazprom should other solutions prove insufficient.

IGB gas pipeline nearing launch, doubts dismissed

The prospective IGB gas pipeline linking Greece and Bulgaria is believed to be almost ready for its commercial launch, scheduled for October 1, despite recent doubts that were cast over the entire project.

Certain analysts recently questioned whether American LNG supply to Bulgaria, through the IGB pipeline, would go ahead, claiming the new Bulgarian government wants to renegotiate a supply agreement with Russia’s Gazprom.

ICGB AD, the consortium behind the IGB project has announced, in what is seen as a response to the scare, that an auction offering pipeline capacity to users will be held this Thursday through the online platform BALKAN GAS HUB EAD, from 9am to 12pm (Sofia time).

Greek construction company AVAX, developing the project, has set itself an end-of-August objective, which could be stretched to September 8, the latest, to complete pending work and obtain required permits from the Bulgarian authorities.

If all this goes according to plan, the IGB gas pipeline will be ready to operate on October 1.

Ukraine war adds to complexity of Greek-Albanian EEZ dispute in Ionian

An unresolved exclusive economic zone dispute between Greece and Albania over territorial rights in the Ionian Sea has become even more complicated as a result of Russia’s war in Ukraine, a conflict that has turned the Ionian and Adriatic sea areas into a hotbed of confrontation between NATO and Russia.

According to a recent report published by Italian daily La Reppublica, numerous incidents, both minor and more intense, have taken place in the Adriatic and Ionian seas between the escorting forces of the US 6th Fleet aircraft carrier Harry Truman and Russian warships. At least one of these incidents took place off Corfu, military sources have informed.

The naval incidents in the region are a result of its increased strategic importance for NATO with regards to the war in Ukraine as well as military preparations for any possible spread of the conflict beyond Ukraine.

Greece and Albania, following an agreement between the two countries, have begun procedures to take their Ionian Sea EEZ dispute to the International Court of Justice in The Hague. The consequences of the Ukraine war add to the issue’s complexity.

Energean and ELPE (Hellenic Petroleum), both holders of licenses in the Ionian Sea, are working to explore the region’s hydrocarbon prospects.

EastMed pipeline consortium set to apply for PCI status

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

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

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

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

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

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

Power producer diesel reserves focus of emergency meeting

Top-ranked officials representing the country’s Hellenic Petroleum (ELPE) and Motor Oil refineries, electricity producers, as well as RAE, the Regulatory Authority for Energy, will take part in an emergency meeting called for today by the energy ministry to address diesel safety reserves and a conversion to this energy source by a number of natural gas-fueled power stations should Russia completely disrupt its gas supply.

According to a RAE plan, five natural gas-fueled power stations will run on diesel should Moscow turn off the taps. These facilities will need to maintain an adequate level of diesel reserves covering the emergency plan.

Diesel reserve level requirements for these power stations have been increased, up from 5 to 20 days of consumption, or maximum storage capacity. Electricity producers must reach the increased safety levels by November 1.

FSU at Revythoussa LNG unit, Italy storage solution advances

An FSU has been licensed and installed at gas grid operator DESFA’s LNG terminal on the islet Revythoussa, just off Athens, boosting the facility’s overall capacity to 370,000 cubic meters.

The new floating storage unit’s installation at the Revythoussa terminal comes as part of the country’s energy security effort for protection should Russia disrupt its gas supply. In addition, it will also be used to serve the needs of neighboring countries.

Other steps are also being taken as part of the national energy security plan.

Greek and Italian officials have reached an advanced stage in talks for maintenance of Greek gas reserves at 1.14 TWh at an underground storage facility in the neighboring country. According to sources, the two sides are set to sign a related Memorandum of Cooperation.

The European Commission requires all EU member states without – or without sufficient – natural gas storage facilities, such as Greece, to store by November 1, gas quantities representing 15 percent of annual consumption at existing storage facilities maintained by fellow member states.

Electricity producers operating generators with dual combustion units (natural gas and diesel) are soon expected to take part in an energy ministry meeting to examine fuel-storage issues. This session could take place tomorrow.

 

 

Fixed charge cap of 5 euros, over €500m raised in July for subsidies

The government has decided to implement a five-euro cap on fixed charges in electricity bills, energy minister Kostas Skrekas has told parliament.

It is the latest in a series of energy-crisis measures introduced by the government and comes after electricity suppliers opted to increase their fixed charges as a means of keeping their tariffs – the competitive aspect of electricity bills – as low as possible.

A new market mechanism’s revenues generated for the Energy Transition Fund, supporting the government’s electricity subsidies initiative, reached over 330 million euros in the first half of the month and could exceed 500 million euros by the end of the month, the minister told parliament. This sum nearly covers the monthly cost for subsidies.

The energy crisis, brought about by pandemic-induced market abnormalities, has been exacerbated by Russia’s war on Ukraine, which the minister described as “catastrophic, causing thousands of deaths, many of the victims being unarmed civilians, and beyond that, an enormous energy crisis that is feeding economic and inflationary crises, which we hope does not also lead to a food crisis.”

Lignite plants at the first line of defense against a Russian gas stoppage

In the case that Russian gas supplies are stopped to Greece the energy regulator plans to enhance power production through lignite plants, as part of its emergency plan, which has been submitted for consultation.
During a meeting with the prime minister last week, it was decided that lignite plants will double their production in that eventuality and reach 10 TWh in the following 12 months from 5 TWh today. These TWh are equal to 20% of Greece’s annual power consumption.
Furthermore, the plan includes the storing of natural gas in Italy, according to European guidelines included in the REPower EU plan. Quantities will reach 1.7-1.8 TWh from October and for a period of five months.
The regulator’s plan also includes fuel switching in the five natural gas plants that are able to do that. Another measure is to take advantage of the LNG terminal in Revythoussa, which has now another floating terminal.

Coal, nuclear exit slowdowns, demand-response part of EU plan

The European Commission plans to announce an energy-crisis emergency plan on July 20, its measures believed to include a slowdown of nuclear and coal-fired facility withdrawals in the EU, as well as a demand-response mechanism offering industrial consumers incentives to curb energy demand in exchange for compensation.

The EU is bracing for further cuts to Russian gas supply. Kremlin-controlled energy giant Gazprom shut down Nord Stream I, a subsea pipeline linking Russia with Germany on July 11 for a 10-day period of maintenance work, according to Gazprom.

The EU’s emergency plan, to coincide with the end of this ten-day period, is expected to include measures aiming to cut gas use, incentives for firms to curb energy demand and gas savings now for stockpiling ahead of winter.

The European Commission plan will also call on EU member states to encourage industrial enterprises and electricity producers to switch energy sources and opt for biomass, biomethane, solar and and other renewable energy sources.

In addition, the plan will require thermal power stations equipped to also run on diesel to take necessary precautions enabling them to switch to diesel for continual periods of at least five days.