Shipping sector developing offshore wind farm interest

The shipping industry, domestic and foreign, is expressing growing investment interest for offshore wind farms and is awaiting the emerging sector’s regulatory framework to develop such projects in Greek sea territory, energypress sources have informed.

Though plans are still nascent, a considerable number of shipping companies and shipowners are already in talks with consultants for related feasibility studies.

Conditions for shipping industry players are favorable. Their earnings have skyrocketed amid abnormal market conditions, worldwide, ever since the outbreak of the pandemic in early 2020. These higher earnings have generated additional capital for investment, prompting shipowners to consider the potential of offshore wind farms.

Anticipating strong growth in this emerging sector, metals production group Viohalco plans to proceed with an investment estimated to be worth 70 and 100 million euros, which, through subsidiary Cenergy Holdings, will merge the knowhow of group members Hellenic Cables and Corinth Pipeworks for the establishment of the world’s first industrialized unit for floating wind turbines.

Norway’s Equinor, the world’s biggest developer of offshore wind farms, has already expressed interest to develop projects in Greece, proposing an area between the Cyclades islands of Tinos, Syros and Mykonos.

In addition, TERNA Energy has reached an agreement with Ocean Winds, a partnership between EDP Renewables and Engie, for co-development of offshore wind farms offering a 1.5-GW capacity. Also, Mytilineos has reached an agreement with Denmark’s Copenhagen Offshore Partners. Hellenic Petroleum (ELPE) is currently engaged in talks with a major foreign company and Motor Oil has signed an agreement with Abu Dhabi Future Energy Company (Masdar).

Power utility PPC is currently involved in talks with at least five foreign companies, including Australia’s Macquarie, which recently acquired a 49 percent stake in PPC subsidiary DEDDIE/HEDNO, Greece’s distribution network operator. PPC is also believed to be in talks with American fund Quadum.

The Copelouzos group has joined forces with RF Energy to establish Aegean Offshore Wind Farms, a company planning to develop offshore parks offering an 850-MW capacity.

Greek shipowners own 5,514 ships, controlling 32 percent of the world’s tankers, 25 percent of bulk carriers and 22 percent of LNG carriers, the latter category being crucial for Europe’s effort to end its reliance on Russian natural gas.


Solar panel market hit by high prices, major delivery delays

Transportation delivery problems from China, combined with a continuing rise in the cost of raw materials, are maintaining solar panel prices at elevated levels, and, even more crucially, leaving the market dry.

According to PVInfoLink data, current price levels for silicon, the basic component for solar cells, have risen by 300 percent since July, 2020.

Container shipping costs have increased by 350 percent since April, 2020, reaching 12,000 dollars per container, while, according to some forecasts, will soon reach 15,000 dollars per container.

These developments have created unfavorable and unprecedented conditions for investors seeking to develop solar energy parks as they are unable to find panels that could be delivered within reasonable periods, even at higher prices.

Investors who had not placed orders for solar panels in anticipation of further price reductions now find themselves in big trouble. This is especially so for investors who face nearing electrification deadlines for solar energy parks.

According to projections by international analysts, PV price levels are not expected to start declining until at least the end of the first half of 2022.

Demand levels for PV panels will remain high, according to analysts, as investment plans in Europe and around the world are continuously growing in scale, and, even more crucially, the Chinese and Indian markets are moving ahead fast.

Illicit shipping fuel trade persistent, latest measure a step back

Illicit shipping fuel trade in Greece remains a persisting issue despite a series of measures implemented by a succession of governments since 2002 to restrict movement by vessels of smuggled fuel.

In a latest initiative, the finance ministry is preparing a rule, which, if implemented, will nullify preceding measures, subsequently permitting, once again, the use of floating refueling means of any capacity without any restriction of movement.

Adoption of this rule will effectively facilitate the avoidance of special consumption tax payments on shipping fuel purchased.

Special consumption tax on shipping diesel is 410 euros per cubic meter, roughly the current market value of the fuel, while this tax on mazut is 38 euros per ton.

Relatively recent rules, introduced in 2015 and 2016, requiring shipping companies to install certified fuel inflow-outflow monitoring systems as well as GPS technology, have not yet been fully implemented and, subsequently, proved insufficient to stop illicit shipping fuel trade.

Energy transition to boost medium-term gas demand; 6 bcm total expected in ’20

The energy transition is boosting the prospects of an increase in Greek natural gas consumption, which could rise by 2.5 to 3 bcm in the medium term, market experts project.

Pundits expect total gas consumption in 2020 to reach 6 bcm, up considerably from levels registered in 2019, and stabilize at this level in 2021.

Electricity generation is a key factor in the anticipated rise of gas consumption as the withdrawal of lignite-fired power stations should increase the energy-mix share of natural gas to levels of between 30 and 40 percent.

The rise in gas consumption in the short term will greatly depend on the number of new gas-fired power stations to be introduced. For example, a gas-consumption increase of as much as 1.5 bcm is expected if three gas-fired power units with respective capacities of 800 MW are introduced to the system.

Exports are expected to add a further 1 bcm to the market’s size, while small-scale expansion covering the shipping sector and needs of detached areas should add another 500 million cubic meters to consumption.


DEPA signs EIB loan agreement to build LNG supply tanker

Gas utility DEPA has signed a loan agreement with the European Investment Bank for the construction of an LNG supply tanker with a 3,000 cubic-meter capacity, sources have informed.

This loan agreement follows a funding agreement reached between DEPA and the Innovation and Networks Executive Agency (INEA) for EU co-financing – through the new BlueHUBS program – of the LNG tanker to be built by the utility.

Planned to adopt new environmentally friendly shipping fuels,  the LNG tanker promises to be the first of its kind in Greece and the east Mediterranean. It will be designed to meet LNG supply needs at Piraeus port and also transport LNG to other major ports around the country.

DEPA, a wide supporter of LNG usage in shipping, is coordinating the BlueHUBS program (2019-2022), aiming for the development of LNG supply carriers.

Jointly supported by Greece and Cyprus, BlueHUBS represents the continuation of the Poseidon Med II program and has a total budget of approximately 66 million euros, of which 30 percent is being provided by the EU.

Small-scale LNG dock plan promises wider prospects

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

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

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

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

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

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

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

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

DEPA planning LNG carrier to utilize cleaner shipping fuel opportunities

Greek gas utility DEPA is preparing to enter the LNG bunkering market with the construction of a 3,000 cubic-meter carrier to be based at Piraeus port, according to energypress sources.

This LNG carrier is intended to offer bunkering services at Piraeus port, the country’s biggest, and also transport LNG to other ports.

DEPA has signed an agreement with the Innovation and Networks Executive Agency (INEA), a European Commission executive agency, for the Blue HUBS program, an extension of Poseidon Med II, offering EU financing for LNG bunkering vessels, the sources informed.

DEPA also plans to rely on company capital and bank financing for the LNG carrier’s development.

The DEPA vessel, whose delivery is anticipated around 2021 or 2022, will be the first of its kind in the Greek and wider eastern Mediterranean regions.

The gas utility is essentially moving to capitalize on market opportunities emerging as a result of stricter EU environmental regulations for cleaner shipping fuels to come into effect as of 2020.


Diesel demand up, spurred by greater merchant ship activity

Demand for diesel, used to run merchant ship engines, has increased, spurred by international trade growth during the first half of 2017 to reach the highest level recorded over the past six years.

International trade grew by 5 percent between March and May this year, compared to the equivalent period a year earlier, according to data provided by the Netherlands Bureau for Economic Policy Analysis (CPB).

This rise in international trading activity covers most of the world’s regions, not including Africa and the Middle East, the CPB data showed.

More stable fuel prices this year have contributed to the growth in global trading activity. Sliding consumer spending and lower business investment levels experienced between mid-2014 and early 2016 in most developing countries have now rebounded.

Taking into consideration the increase of global trading activity, most analysts agree that fuel demand will continue to increase in 2017 and 2018. Pundits believe that demand for diesel will grow at a faster rate than that of gasoline.

Global demand for refined petroleum products dropped by 0.5 percent in 2016, the first decline registered since 2009.

Mytilineos prepares for bond issue to support investments

Mytilineos, one of Greece’s leading industrial groups with activities in the sectors of EPC (Engineering-Procurement-Construction), Metallurgy & Mining, and Energy, has announced the terms of a company bond issue offering 300,000 bonds worth 1,000 euros each, enabling smaller investors to also take part.

The group’s chief executive Evangelos Mytilineos had recently told a shareholders’ meeting that a bond issue allowing smaller invetsors to take part would be considered.

The bond issue will enable the corporate group to draw from a pool worth a total of 1.4 billion euros for investment needs. Its rate will be set on June 20, while the issue will be made available to investors over a three-day period, June 21 to 23. Trading of the bonds is scheduled to commence on June 28.

The Renewable energy and industrial sectors are expected to draw the bulk of the corporate group’s investment needs, Aluminium of Greece being a key recipient. The group plans to boost annual production capacity at Aluminium of Greece to 1.8 million tons from the current level of 830,000 tons. An investment of about 400 million euros will be needed for this production capacity increase.

The group is increasing its activities in the shipping sector. Dry cargo ships have been purchased at a cost of 35.8 milion euros with own capital. Further vessel purchases worth 64.7 million euros are being planned. These will also be financed with own capital. The objective is to reduce the group’s exposure to fluctuating shipping costs and also serve the transportation needs of Aluminium of Greece.

New renewable energy sector investments being planned by the Mytilineos group are worth 73.9 million euros. Own capital, grants and bank loans are expected to fininace these initiatives.

The corporate group also plans to proceed with various other aluminium and energy sector investments worth 213 million euros.


Greek shipowners, counting on LNG, place new vessel orders

Greek shipowners, seeking to capitalize on gas oversupply forecasts, plan to further increase their presence in the LNG trade market.

According to latest available official data, Greek shipowners have ordered 26 new LNG carriers with a total capacity of 4,510,050 GT and a total value of 5.81 billion dollars.

In addition, three Greek shipowners recently placed orders for new ships, two of these concerning a number of LNG carriers, it was disclosed last week during an international shipping fair in Athens.

Maran Tankers and Maran Gas Maritime, owned by Yiannis Aggelikousis, have ordered four tankers and four LNG carriers, increasing this shipowner’s orders placed at South Korean shipbuilder Daewoo to one billion euros.

Dynagas, owned by shipowner Giorgos Prokopiou, has ordered two regasification vessels from Chinese shipbuilder Hudon Zhonghua, each unit worth between 250 million and 300 million dollars.

The third order, made by the Tsakos group, is not gas related. The group ordered containers.

These latest developments indicate that two of the country’s leading shipowners are focused on further developing their places in the LNG market despite less optimistic forecasts made by international officials on future gas market growth.

After having grown at a rate of 2.5 percent over the past six years, the natural gas market is forecast to grow at an average rate of 1.5 percent, annually, until 2021, primarily as a result of a European slowdown and uncertainty in China, according to the International Energy Agency.

Latest data made available by valuation provider Vesselsvalue showed that the fleet of Greek-owned LNG carriers ranks as the world’s second largest with 71 vessels worth a total of 13.03 billion dollars.