IGB gas pipeline launch delayed by 8 months for late-June, 2022

The commercial launch of the Greek-Bulgarian IGB gas pipeline has been deferred by 8 months, for June 30, 2022, as a result of pandemic-related obstacles faced during the project’s development.

The gas pipeline’s technical work is now expected to be completed by the end of this year, instead of April, 2021, as was originally scheduled.

Two months earlier, ICGB, the consortium developing the project, informed companies that have reserved pipeline capacities through a market test of the unavoidable delay in the commercial launch.

Contractor AVAX, the winning bidder for the project’s construction in an international tender staged by ICGB, began developing the pipeline in May, 2019, prior to the pandemic, whose emergence and impact forced the company to drastically reschedule the IGB project.

International quarantine rules have delayed the IGB project’s progress as many workers needing to regularly cross the Greek-Bulgarian border have been forced to quarantine, each time, for days.

The quarantining rules have also complicated the transfer of equipment needed from one country to the other.

The ICGB consortium is comprised of Bulgaria’s BEH, holding a 50 percent stake, and IGI Poseidon, a 50-50 partnership involving DEPA International Projects and Italy’s Edison.

The IGB gas pipeline, to cover a total length of 182 kilometers, will run from Komotini, northeastern Greece, to Stara Zagora in Bulgaria, offering a second interconnection between the two countries, in addition to the nearby Sidirokastro link.

The project is planned to begin operating at an annual capacity of 3 bcm, which could be boosted to 5 bcm at a latter date.

 

Gas imports up 17% in first four months, LNG at the forefront

Gas imports for both large and small-scale consumers increased by 17 percent in the year’s first four-month period, defying unprecedented market conditions brought about by the pandemic, especially during March and April, the peak of the lockdown.

Gas imports totaled 21,393 GWh between January and April this year compared to 18,211 GWh during the equivalent period a year earlier, according to data provided by DESFA, the gas grid operator.

During the four-month period, gas imports at DESFA’s LNG terminal on the islet Revythoussa just off Athens rose to 11,679 GWh, a 45 percent increase compared to a year earlier. This terminal was the national gas grid’s biggest entry point.

Sidirokastro, at the Greek-Bulgarian border, followed with a pipeline-gas quantity of 7,952 GWh, an 8 percent drop compared to the equivalent four-month period a year earlier. Even so, Sidirokastro remains an important entry point.

The country’s other pipeline-gas entry point, Kipoi, in the Evros region, northeastern Greece, registered a 13 percent year-on-year increase of natural gas imports to reach 1,762 GWh.

The aforementioned data reconfirms a market overturn that emerged last year to show LNG imports exceed incoming pipeline gas amounts via the grid’s Sidirokastro and Kipoi entry points.

This trend highlights the fact that major Greek energy market players have been able to secure competitively priced LNG and favorable delivery solutions.

Increased gas trading activity at Sidirokastro entry point

The implementation of a Capacity Allocation Mechanism (CAM) at Greece’s gas entry point in Sidirokastro, on the Greek-Bulgarian border, has led to increased trading activity.

The mechanism is designed to facilitate gas transport and trading in the EU.

As a result, a greater number of importers and suppliers are now purchasing natural gas amounts at this border point. More specifically, three gas companies have imported gas amounts from the Sidirokastro gateway, whose capacity was fully covered until recently.

However, full implementation of an interconnection agreement, still encountering practical issues, is needed to further facilitate trade.

Besides DEPA, the Public Gas Corporation, two more firms, Promitheas (Copelouzos, Gazprom) and M&M (Mytilineos, Motor Oil Hellas) are now actively involved in gas imports. ELFE has also purchased gas amounts at the border. So, too, have a number of traders and industrial consumers, such as the energy firms Heron and Cedalion, as well as Yioula, Greece’s biggest glasswork industry, and Elval (Hellenic Aluminium Industry).

The increased activity is reshaping market shares. Promitheas currently holds approximately 20 percent of the gas import market, while M&M, supplying industrial consumers, has also gained a considerable share.

Increased import potential is also possible at Kipoi, the Greek gas system’s second-biggest entry point (to and from Turkey). Negotiations concerning the implementation of an interconnection agreement and CAM system at this entry point are now in progress.

Efforts have been made in the past to forge an opening towards the east. A big market, Turkey would offer major trading opportunities if obstacles are cleared.