ELPE negotiating reopening of North Macedonia oil pipeline

Hellenic Petroleum ELPE, Greek government and North Macedonian officials have begun talks aiming for the reopening of an oil pipeline linking ELPE’s Thessaloniki refinery with the company’s Okta refinery in the neighboring country through an extrajudicial settlement by the end of the year.

The issue was discussed at a meeting in Thessaloniki yesterday, held on the sidelines of a visit by US Secretary of State Mike Pompeo.

At the meeting, the ELPE and North Macedonian government officials appeared keen on achieving an out-of-court settlement, sources informed.

The Greek petroleum group is seeking compensation of 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

ELPE has already won an older case, on the same issue, at the International Court of Arbitration in Paris for compensation worth 52 million dollars. This verdict was delivered in 2007, three years after the case was filed.

The Greek and North Macedonian sides, encouraged by the US, agreed to form a committee to work, until mid-October, on a solution that could enable the oil pipeline to reopen following a seven-year interruption, sources informed.

The officials have set a deadline to reopen the pipeline by the end of the year, sources added.

ELPE has completed all technical work needed for the oil pipeline’s relaunch, sources said. The pipeline’s use in place of oil tankers would offer drastic transportation cost cuts.

The ELPE officials updated North Macedonia’s government officials on the company’s investment plan for the neighboring country, sources said. It is believed to include RES investments and a conversion of ELPE’s Okta facilities into a petroleum products hub that would serve the western Balkans.

ELPE is already present in Serbia and Montenegro and is now targeting the markets of Albania and Kosovo for supply of ready-to-use petroleum products.

The oil pipeline stopped operating in 2013 after ELPE deemed its Okta refining activities were no longer feasible. The 213-km pipeline has a 350,000-metric ton capacity.

Until 2013, the pipeline was used to transfer crude oil from ELPE’s Thessaloniki refinery to the Okta unit in Skopje.

Greek energy minister Costis Hatzidakis chaired yesterday’s meeting, which involved the participation of secretary-general Alexandra Sdoukou; deputy minister for economic diplomacy Kostas Fragogiannis; ELPE president Giannis Papathanasiou; ELPE chief executive Andreas Siamisiis; North Macedonian government deputies Liupko Nikolovski and Fatmit Bitikji; the country’s economy minister Kreshnik Bekteshi; US Assistant Secretary of State for Energy Resources Francis Fannon; and the US Ambassador to North Macedonia Kate Marie Byrnes.

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 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.

Serbian hydropower opportunities the focus at upcoming Belgrade summit

This year’s 3rd Hydropower Balkans Summit is scheduled to take place November 7 and 8 in Belgrade with official support from the national power utility Elektroprivreda Srbije (EPS), owner of a major part of generating capacities in the country.

Major investment projects will be discussed at the summit, a professional platform bringing together chief ministers, major investors, decision-makers of power utilities, leading hydropower plants, project initiators and regulators, with the aim to consolidate efforts focused on efficient development of key projects for construction and modernisation of HPPs across the Balkan region.

Investing in Serbian hydropower projects offers numerous advantages, the summit’s organizers have noted, listing industry data.

Serbia has the highest installed hydropower capacity in southeast Europe. Current installed capacity totals 2,835 MW.

Hydropower plants represent 21.2 percent of Serbia’s energy mix 21.2%, installed capacity amounting to 2,831 MW.

Hydropower plants generate 29 percent of the total amount of electricity produced in Serbia.

A total of 500 million euros is expected to be invested in the modernization of hydropower plants by 2025, the objective being to ensure their services for the next 30 years.

Serbia plans to install 438 MW of new hydropower capacities in order to achieve an energy target gross final energy consumption through the use of renewable energy to 27 percent.

A total of 39 small HPPs with a total capacity of 49 MW currently operate in Serbia. Moreover, 856 potential locations for SHPPs have been identified around Serbia.

The most promising big, medium and small investment projects include construction of three hydropower plants on the upper Drina river, construction of SHPP Celije and SHPP Rovni, as well as an overhaul of the Djerdap 1 and 2 HPPs.

At the end of 2017, EPS announced its intention to overhaul ten units at HPP Đerdap 2 over 10 years to help extend the plant’s lifespan and boost its capacity by 50 MW.

EPS and Siloviye Mashiny are cooperating on the overhaul of HPP Đerdap 1. The overhaul began in 2009. In July 2018, the two companies signed a contract on the modernization of the A2 and A3 units in order to complete a revamp of the entire HPP in 2021. 

For summit details: 

Contact person: Olga Zhogal, Forum Director

Email: OZhogal@vostockcapital.com

Tel. +44 207 394 3090

Website: http://www.hydropowerbalkans.com/

Name agreement developing Fyrom into ELPE oil hub

A bilateral agreement between Greece and Fyrom (Former Yugoslav Republic of Macedonia) for a change of name by the latter to the Republic of North Macedonia is providing further momentum to talks between ELPE (Hellenic Petroleum) and the neighboring country’s government for the reopening of an oil pipeline stretching 213 kilometers from the Greek petroleum group’s Thessaloniki facilities to its Okta company refinery across the northern border.

The two sides are close to finalizing an agreement for the pipeline’s relaunch, sources informed. The facility was shut down in 2013 when ELPE decided it was no longer feasible to keep it running.

The Greek company used the pipeline as a channel of transportation for crude from its Thessaloniki plant to the Okta unit in Fyrom.

Road networks have been used to supply fuels to Fyrom since 2013 but transportation costs and smuggling activity have risen sharply at the expense of both Fyrom and ELPE, the neighboring market’s main supplier.

Besides supplying the Fyrom market, ELPE’s Okta refinery also promises to serve as a hub for the wider region. Wider growth in Balkan countries over recent years was a catalyst in the ELPE board’s decision to reopen the pipeline to its Okta plant.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating more than 200 petrol stations in total. The pipeline’s reopening is expected to facilitate ELPE’s entry into new markets.

 

ELPE oil pipeline from Thessaloniki to Fyrom seen reopening March

An oil pipeline stretching 213 kilometers from Greek petroleum group  ELPE’s Thessaloniki facilities in the country’s north to its Okta company refinery across the northern border in Fyrom (Former Yugoslav Republic of Macedonia) is expected to reopen around March after the firm ceased using this channel in 2013, ruling it, at the time, as inefficient and unprofitable.

The ensuing road transportation of fuels has sharply increased costs and smuggling activity.

ELPE and Fyrom’s administration are ready for the oil pipeline’s reopening, sources have informed. However, constitutional changes concerning a bilateral agreement for Fyrom’s name change to the Republic of North Macedonia, requiring several rounds of voting in parliament, still need to be completed before oil quantities can be transported through this pipeline.

The ELPE group is currently using its Okta company refinery as a storage facility. Balkan regional growth experienced in recent years has rekindled the Greek petroleum firm’s interest in the Okta unit as a transit center for distribution of petroleum products in Fyrom and other countries in the region.

ELPE maintains a market presence in Bulgaria, Serbia, Montenegro and Fyrom, operating over 200 petrol stations.

The Thessaloniki-Fyrom oil pipeline’s reopening is expected to significantly reduce fuel transportation costs to these markets.

 

Serbia discussed as Italy alternative for East Med project

An alternative route, replacing Italy with Serbia, for the ambitious 5 billion-euro East Med natural gas pipeline, planned to carry southeast Mediterranean natural gas deposits to the EU via Greece, was discussed at a five-way meeting in Thessaloniki last Friday between leading energy-sector officials representing Greece, Israel, Bulgaria, Serbia and the US.

The meeting’s participants expressed concern over the new Italian coalition’s unfavorable view of such projects. In June, the Italian coalition described as “pointless” the Trans Adriatic Pipeline (TAP) project, the final stage of a bigger project – the Southern Gas Corridor – that will take Azeri gas to western Europe. Intended to diversify Europe’s natural gas sources and lessen the reliance on Russia, the TAP project represents the cornerstone of the EU’s energy security policy.

An extremely complex 1,900-km project whose greatest part would run underwater, East Med is planned to conclude in Italy. It is being supported by the EU as a PCI- status project.

Serbia’s mining and energy minister Aleksandar Antic, one of the five participants at the Thessaloniki meeting, held within the framework of the Thessaloniki International Trade Fair, is believed to have embraced the plan for an alternative East Med route that would include his country – should Italy not clarify its position.

 

IGB construction, procurement tenders to be announced January

Development of the Greek-Bulgarian IGB gas grid interconnector is expected to commence in mid-2018 as documentation concerning two project tenders, one for construction, the other for pipeline procurement, has been finalized, according to sources.

Both tenders are expected to be announced in January, which would enable the project to begin midway through next year, as ICGB, the project’s consortium, currently plans.

A number of key institutions, including the European Investment Bank (EIB), have expressed an interest in the project’s financing. Participation by the European Fund for Strategic Investments (EFSI) has not been ruled out.

The IGB is expected to be completed by 2020 along with TAP, the Trans Adriatic Pipeline, a project to transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe, through a route crossing northern Greece, Albania and the Adriatic Sea, to southern Italy.

State-controlled Bulgarian Energy Holding (BEH) holds a 50 percent stake in the ICGB consortium, while DEPA, Greece’s public gas corporation, and Italy’s Edison control 25 percent stakes.

The IGB interconnector, a project to measure 180 kilomteres in length and offer a 4.3 bcm capacity with upgrade options, is budgeted at approximately 220 million euros.

Its development promises to offer Azerbaijani natural gas an alternative route into southeast European markets. Procedures are already in motion for an extension to Serbia. The project will also enable LNG supply to regional countries currently subject to limited gas supply and facing major energy security issues.

DEPA chief invites Serbia to take part in Alexandroupoli FSRU, IGB pipeline

The head official at DEPA, Greece’s Public Gas Corporation, has extended an invitation to Serbia for participation in major energy projects planned for the region, namely the Greek-Bulgarian IGB gas pipeline interconnection and a floating LNG terminal in Alexandropoli, northeastern Greece.

Theodoros Kitsakos, DEPA’s chief executive officer, asked Serbian officials for the country to become involved in these projects during a series of meetings in Serbia.

Kitsakos visited the neighboring country to take part in an ecomomic forum earlier this week, held to discuss regional energy developments.

The DEPA chief met with key Serbian officials, including the gas utility and energy ministry heads, as well as energy-sector entrepreneurs, as part of an effort to promote DEPA’s strategic plan for the wider region.

Speaking at the economic forum, Kitsakos stressed the considerable gas needs of the wider Balkan region and Europe, overall, require the utilization of additional supply sources.

European gas consumption requirements represent 13 percent of global demand but the continent’s gas deposits amount to just one percent of the world’s total supply, Kitsakos pointed out.

Minor landslide at Serbian mine raises domestic power supply concerns

A minor landslide at a coal mine in the Serbian region of Kolubara has raised fears of energy supply shortages in the country as a result of diminishing coal reserves at the country’s Nikola Tesla power plant complex, Serbian media has reported.

Though the landslide was of limited scale compared to a respective event last weekend at Greece’s Amynteo facilities, Serbian energy authorities are concerned as coal reserves at the Nikola Tesla complex, the country’s biggest covering neary half of Serbia’s electricity needs, currently measure approximately 400,000 tons, well under a safety level of at least 1.5 millon tons, according to Serbian media.

Power utility EPS rejected the reports by noting coal reserves measure over one million tons. The utility also dismissed reports of a drop in the quality of coal being mined.

Besides claiming the country’s coal reserves are diminished, Serbian media is also reporting that the Kolubara mine has produced lignite of inferior quality in recent months. This is believed to have increased fuel consumption levels as oil is added to the coal mix when coal combustion levels are lower.

The developments have generated uncertainty as to whether EPS will be able to cover the country’s electricity needs without having to turn to costly imports during periods of peak demand.

Commenting just days ago, Milorad Grcid, managing director at EPS, assured that sufficient coal supply exists for electricity generation but did admit output at the Kolubara was 5.6 percent lower than planned. Coal and electricity prices would not rise, the official added.

 

CMEC, following PPC agreement, to develop power station in Serbia

Following up on its recent agreement with the main power utility PPC to examine the prospect of constructing a new coal-fired power station, Melitis II, in the Florina area, northern Greece, CMEC (China Machinery Engineering Corporation) is proceeding with the development of a new power station in Serbia as part of the Chinese firm’s wider plan to expand its activities in the Balkan region.

CMEC has reached an agreement with Serbia’s EPS to construct of a new, state-of-the-art thermal electricity production station in Kostolac, eastern Serbia. This unit will utilize coal deposits in the Drmno area.

The plan includes using a new VI ECS coal-excavating unit worth 123 million dollars to help boost coal output at the Drmno deposit. The objective is to increase coal production from the present level of 9 million tons per year to 12 million tons.

The Serbian power station project is being developed by a consortium that is headed by CMEC and includes Germany’s Krupp, Austria’s Sandvik, as well as Serbian firms.

The total cost of the project, including the new power station and the coal deposit’s expansion, is worth 715.6 million dollars. A China Exim Bank loan will cover 608 million dollars of this amount, while the remainder will be provided by the EPS corporation.

The Serbian power station is scheduled to be completed in 2020.

As for the prospective Melitis II power station in northern Greece, a team of CMEC technical officials recently visited the area to assess the existing infrastructure – Melitis 1 and the mines – in order to prepare a report for the company’s administration. A CMEC decision on whether it will be interested in developing the Florina project is expected in spring.