IGB nearing completion, Bulgarian PM to visit Komotini

The Greek-Bulgarian IGB gas pipeline, whose construction is expected to be completed by mid-April, promises to contribute to the EU’s effort for drastically reduced reliance on Russian gas.

The IGB gas pipeline, a 50-50 joint venture of the ICGB consortium, involving Greek-Italian company IGI Poseidon (DEPA and Edison) and Bulgaria’s BEH, will run from Komotini, northeastern Greece, to Stara Zagora in Bulgaria and be linked with the TAP pipeline that runs across northern Greece for supply of Azerbaijaini gas to the region.

The IGB pipeline will offer a second interconnection between Greece and Bulgaria, in addition to the nearby Sidirokastro link.

Last week, EU officials announced a new energy strategy, Repower EU, aiming to reduce Russian gas imports to the continent by two-thirds. The establishment of alternative energy supply routes into Europe is now a priority on the Brussels agenda.

Bulgarian prime minister Kiril Petkov is scheduled to visit the IGB project contactor AVAX’s construction site in Komotini this Friday. His Greek counterpart Kyriakos Mitsotakis has been forced to miss the occasion after being sidelined by the Covid-19 virus. Energy minister Kostas Skrekas will fill in.

Athens to discuss plan should Russian gas supply be cut

The Greek government is on high alert fearing the entry of Russian troops into two rebel-held regions in Ukraine’s east could disrupt Russian natural gas supplies to Europe and prompt energy insufficiencies, including in Greece.

In response to the development, energy minister Kostas Skrekas has been asked to attend an emergency meeting of the Government Council for Foreign Affairs and Defense (KYSEA), to be headed by Prime Minister Kyriakos Mitsotakis, and present a detailed update on the strategy he could implement to avert a natural gas shortage in Greece should Russia disrupt its gas supply to Europe or the EU imposes economic sanctions on Russia, including its gas exports.

Russian president Vladimir Putin has recognized Donetsk and Luhansk as independent states.

The fundamentals of the Greek energy minister’s plan had been presented at a recent government meeting on February 14.

According to sources, the worst-case scenario would entail a disruption of Russian natural gas supply via the TurkStream pipeline, which supplies Bulgaria and then Greece.

In this event, Greece would need to utilize gas grid operator DESFA’s LNG terminal, on the islet Revythoussa just off Athens, to its fullest, as well as the TAP pipeline supplying natural gas from Azerbaijan.

The Revythoussa LNG terminal is currently filled to capacity and would remain so with two shipments each month for as long as the Ukraine crisis continues, sources have informed.

However, the big question for Greece, and Europe as a whole, is whether LNG shipments will be available, and at what price.

Milder weather conditions, resulting in less gas consumption, would help ease the pressure on grids throughout Europe.

Emergency energy plan shaped should Russia invade Ukraine

The government’s emergency energy sufficiency plan should a Russian invasion of Ukraine occur over the next couple of months and interrupt Russian gas supply to Greece, a worst-case scenario considered unlikely yet not impossible, includes at least three additional LNG shipments from Algeria and Egypt, a switch to diesel powering of natural gas-fueled powered stations, wherever this is technically possible, as well as increased inflow of natural gas from Azerbaijan through the TAP route.

The country’s energy planning authorities continue to believe there is no cause for alarm, despite being under no illusions that the quantity of Russian gas supply received by Greece could be fully replaced in the event of a disruption.

External factors beyond the control of the country’s energy officials will be crucial should  Russian forces invade Ukraine. The duration of any conflict, weather conditions over the next couple of months, as well as the availability of additional gas orders, in a market where demand levels are already breaking records, are all crucial factors that would shape the severity of yet another crisis.

Five hydrogen projects seeking inclusion on IPCEI list

Authorities at the energy and development ministries are working on approval procedures for five hydrogen-related projects involving as many companies – Damco (Copelouzos group), Snam, Energean, TAP and gas grid operator DESFA – all seeking their inclusion on the EU’s list of Important Projects of Common European Interest (IPCEI).

Damco is interested in developing a low-carbon blue hydrogen production facility in Greece’s north. The project is planned to use natural gas for the production of hydrogen, while also capturing carbon emissions.

A Damco partnership with Italy’s Snam, involved in a number of hydrogen projects, is looking to develop three hydrogen producing facilities, in Athens, Thessaloniki and Alexandroupoli, as well as hydrogen reloading railway stations.

Energean plans to develop a blue hydrogen plant of virtually zero emissions at Prinos, using natural gas and combining carbon capture and storage technology. Energean has already being given recovery fund approval and funding for this project.

DESFA, the gas grid operator, wants to develop hydrogen transmission projects.

TAP is interested in developing projects linked to the major White Dragon project – involving the country’s biggest energy groups with gas company DEPA Commercial as head coordinator, for a hydrogen producing facility in northern Greece’s lignite-dependent west Macedonia region – with the intention of transporting and exporting hydrogen to European markets through interconnections.

Once the five hydrogen projects are approved domestically, their investors will need to prove the maturity of the projects, technically and financially, in accordance with IPCEI criteria.

 

Natural gas consumption hits record level in 2021, up 10.9%

Natural gas consumption in Greece reached an all-time high in 2021, increasing by 10.87 percent to 69.96 million MWh, up from 63.1 million MWh in 2020, according to annual data provided by DESFA, the country’s gas grid operator.

Natural gas-fueled power stations represented the greatest share of this consumption, using 68.65 percent in 2021, while household consumers and suppliers linked to the grid followed with 18.77 percent. Industrial enterprises directly linked with DESFA’s high-pressure supply system consumed 12.56 percent of the country’s total natural gas inflow.

Sidirokastro in Greece’s northeast remains the main natural gas entry point, while considerable natural gas quantities were also brought in from the new Nea Mesimvria entry point, in the north, which, since late 2020, has linked the country’s grid with the TAP pipeline running across northern Greece.

 

Solid trader interest for LNG terminal slots despite crisis-related concerns

Demand is high for LNG slots at the Revythoussa terminal in 2022, made available through ongoing gas grid operator DESFA auctions, attracting strong interest from importers, despite concerns that the current energy crisis and difficulty to make price projections could dampen interest at these sessions, ending November 2 with a third and final auction.

The level of interest for LNG slots at DESFA’s Revythoussa terminal, on the islet just off Athens, is significant for the gas grid operator as well as power grid operator IPTO, as it helps shape the country’s energy security picture, especially for the challenging colder months, right up until the end of April in 2022.

A total of 2.5 billion cubic meters of LNG is expected to be needed in 2022 to satisfy the Greek market’s needs, according to sources.

Besides LNG, overall natural gas consumption in the Greek market next year is expected to reach 7.5 billion cubic meters.

Of this total, 5 billion cubic meters is expected to be supplied through pipeline gas imports, 3.5 million cubic meters coming from Russia, one billion cubic meters from Azerbaijan, through the TAP route, and 0.5 billion cubic meters from Turkey’s Botas.

 

 

 

Revythoussa terminal LNG slot auctions for ’22 starting today

Gas grid operator DESFA will today stage the first of three auctions planned until November 2 for LNG slots at its Revythoussa terminal in 2022, following a slight delay in the hope of a gas price de-escalation, to no avail.

These sessions are planned to be immediately followed by auctions – to be staged until the end of the year – for reservations of LNG slots at Revythoussa between 2023 and 2026.

DESFA, along with power grid operator IPTO, have their eyes set on the first auction series for LNG slot reservations at Revythoussa in 2022, given the extraordinary market conditions prompted by the sharp rise in natural gas prices over recent months.

According to market experts, making forecasts about the auctions concerning 2022 is next to impossible as it remains unclear if importers, especially electricity producers, managing their own gas supplies, will seek LNG slots at Revythoussa or hold back and instead opt to punt on pipeline gas.

Whatever the outcome, energy sufficiency will not be an issue as the Revythoussa terminal nowadays represents only 30 percent of total gas imports into Greece, the northern grid interconnection and TAP playing dominant roles, DESFA officials noted.

 

 

Crisis Management Committee to examine supply security

The Crisis Management Committee is expected to meet within the first fortnight of October to examine the overall situation in the energy market, driving price levels up to exorbitant levels for consumers of all categories.

The committee’s members will discuss the issue of supply adequacy and security for meeting electricity generation needs, primarily.

Electricity, natural gas and CO2 emission prices are skyrocketing, while natural gas shortages are now emerging in EU markets, all as a result of an extraordinary combination of developments in European markets.

For the time being, Greek energy sector authorities – RAE, the Regulatory Authority for Energy; DESFA, the gas grid operator; and IPTO, the power grid operator – have remained reassuring. Yesterday, RAE president Athanasios Dagoumas noted: “We are not in a state of alarm but are vigilant.”

Overall natural gas consumption is expected to increase in 2021. Consumption was 14 percent higher in the first half compared to the equivalent period a year earlier, DESFA data has shown.

Gas demand rose in July and August to meet increased electricity generation needs and is also expected to be elevated this coming winter.

In Greece, approximately 60 percent of natural gas consumption results from electricity generation. The ongoing withdrawal of coal-fired power stations and greater reliance on fluctuating RES output is expected to lead to a further increase in demand for natural gas.

Local authorities have pointed to Greece’s natural gas source diversification, made possible by the Revythoussa LNG terminal and TAP, both offering alternative solutions, as crucial in the effort to manage the current energy crisis.

DESFA looks to biomethane, hydrogen, plans grid investments

Greek gas grid operator DESFA plans to invest in biomethane and hydrogen infrastructure to be in a position to utilize these eco-friendly gas options and avoid being impacted by the energy transition.

DESFA’s experienced European gas companies holding stakes in the Greek operator believe green biomethane technologies are more developed and mature compared to those available for hydrogen.

Snam, Enagas and DESFA’s other shareholders – Fluxys, Damco – have set as a primary objective to “decarbonize the natural gas chain”.

DESFA officials are in talks with universities, market authorities, as well as Greek enterprises to develop biomethane pilot programs.

More projects such as the White Dragon project – bringing Greece’s biggest industrial corporations closer for major investments in electrolytic hydrogen production by means of solar energy from photovoltaic parks – can be expected next winter, officials anticipate.

If the White Dragon project is approved, DESFA plans to upgrade its existing natural gas network in order to be able to receive hydrogen production, transport from the country’s north to south, channel to TAP and, via TAP, transport to the EU.

DESFA’s share of the White Dragon project, estimated between 30 and 35 percent of the cost, is expected to reach 1.5 billion euros, of which one billion euros – if the project is approved – will concern the development of new infrastructure for hydrogen transmission through the Greek gas network, measuring 1,466 km.

Brussels forwards new PCI list, to be finalized late this year

The European Commission’s fifth PCI (Projects of Common Interest) list in the electricity and natural gas sectors, being forwarded for public consultation, features, for now, a number of project additions and removals, compared to the previous edition.

Market officials and state authorities will have the opportunity to offer their views and observations over the consultation procedure’s twelve-week period before the European Commission adopts a finalized version of the fifth PCI list towards the end of 2021, based on an existing Trans-European Networks for Energy (TEN-E) framework, focused on linking the energy infrastructure of EU countries.

PCI projects are entitled to EU funding support. Brussels authorities introduced selection criteria revisions in December, ascertaining, however, that the impact of all projects, especially on CO2 emissions, will be appraised when finalizing the PCI list’s fifth edition.

The provisional list includes a number of electricity and gas sector projects concerning Greece.

Electricity-sector projects involving Greece include: a Bulgarian-Greek grid interconnection, expected to be completed in 2023; an Egyptian-Greek-Libyan grid interconnection headed by Green Power 2020 and scheduled for delivery in 2025; as well as three Egypt-Greece interconnections, two of these featuring Kykladika Meltemia SA as project promoter and expected to be respectively completed in 2025 and 2028, and a third headed by Elica SA and scheduled for completion in 2028.

An energy storage project planned by Eunice for Ptolemaida, northern Greece, and scheduled for completion in 2022 is a new entry on the PCI list.

In the natural gas sector, the PCI list includes: the Alexandroupoli FSRU (2022); a subsea pipeline between Greece and Italy, known as the Poseidon Pipeline (2025); EastMed, a pipeline planned to carry natural gas from the east Mediterranean to European markets, via Crete (2025); a compressor station in Thessaloniki’s Nea Mesimvria area (2022); a metering and regulating station in Megalopoli, Peloponnese (2025); a compressor station in Abelia, in Greece’s mid-north (2023); a compressor station in Kipoi, northeastern Greece (2024); a pipeline link for the Alexandroupoli FSRU (2022); a TAP pipeline capacity increase (2025); and the development of an underground gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala” in northern Greece (2023).

DEPA calls for RAE to prioritize Kipoi, Abelia compressor stations

Gas utility DEPA has underlined the gas-supply security importance of two prospective compressor stations in Kipoi, northeastern Greece, and Abelia, in the mid-north, urging RAE, the Regulatory Authority for Energy, to prioritize their development.

The two projects, on a RAE list of infrastructure projects for preventive action, are expected to significantly improve energy supply security in Greece over the mid and long-term by facilitating the transportation process of natural gas.

DEPA stressed the importance of the two compressor stations in a letter forwarded to RAE’s public consultation procedure on its preventive action plan.

The two compressor stations are vital for grid-connection and gas-flow purposes concerning the prospective Alexandroupoli FSRU and an underground gas storage facility (UGS) planned for development at an almost depleted offshore natural gas field in South Kavala, DEPA pointed out in its letter.

Also, the Abelia compressor station is needed to ensure hydraulic gas-flow sufficiency from north to south, via the TAP project, DEPA noted.

Both compressor station projects feature in gas grid operator DESFA’s ten-year development plan covering 2021 to 2030.

Gas market competition intensifies, TAP lowering prices

Competition has intensified in the country’s wholesale gas market at a time of changing conditions and negotiations for 2021 deals between importers and major-scale consumers, namely electricity producers and industrial enterprises.

Many gas supply contracts expired at the end of 2020, requiring a large number of players to renegotiate deals. Some of these big consumers have already reached new agreements with gas wholesalers.

Market conditions have changed considerably compared to a year earlier. Supply of Azeri gas through the new TAP route has already begun to Greece as well as Bulgaria, increasing overall supply, which has obliged, and permitted, gas utility DEPA to pursue a more aggressive pricing policy as the company pushes to absorb quantities it has committed to through clauses in existing contracts.

Also, the TAP-related increase of gas supply to Bulgaria, combined with this country’s inflow of Russian gas through oil-indexed price agreements, currently relatively cheaper, is now depriving Greek wholesale gas companies of entry into a neighboring market that was available for trading activity last year.

Furthermore, conditions have also been impacted by a competition committee decision no longer requiring DEPA to stage gas auctions to make available a share of its gas orders to rival traders. This measure was introduced and maintained to help liberalize Greece’s gas market.

The new conditions are pushing Greek traders towards more competitive pricing policies. They appear to have acknowledged that their profit margins will be narrower in 2021.

DEPA, helped by the fact that a sizeable proportion of its gas purchases is oil-indexed, is said to be playing a dominant role in the ongoing negotiations for new contracts with customers.

It should be pointed out that, unlike rival gas importers such as Mytilineos, Elpedison and Heron, all benefitting through self-consumption of a large part of their gas orders for gas-fired power stations they operate, DEPA does not self-consume.

Prometheus Gas, a member of the Copelouzos group, remains a formidable player, while the power utility PPC and petroleum company Motor Oil are less influential in the wholesale gas market.

Higher LNG prices, compared to pipeline gas, will decrease demand for LNG this year and weaken the interest of traders for LNG supply through gas grid operator DESFA’s Revythoussa terminal on the islet just off Athens. Last year, this facility was a hot spot of trading activity as a result of lower-priced LNG.

Azeri gas through TAP route now just a fortnight away

Just two weeks remain before the scheduled launch of the TAP gas pipeline on January 1, a development to facilitate the inflow of Azeri gas into the Greek market.

This coming Monday, in the final step before the launch, the TAP project, running across Greece’s north, Albania and the Adriatic Sea to Italy, will be interconnected with Greek gas grid operator DESFA’s domestic network.

Greek gas utility DEPA has already reached an agreement with Azeri officials for an annual amount of 1 bcm through the TAP route. Azerbaijan is offering customers discount prices for 2021.

TAP’s Azeri natural gas supply to the Greek market will represent a fifth gas source alternative for Greece, bolstering the country’s energy security while also promising to offer benefits to consumers and the national economy.

The technical details of the TAP-DESFA pipeline interconnection, situated in Thessaloniki’s Nea Mesimvria area, were completed several weeks ago. The link has undergone testing over the past month or so.

TAP trial test preparing launch, Azeri gas delivery by year’s end

The Trans Adriatic Pipeline (TAP) project, to enable the delivery of Caspian gas to destinations throughout southeastern, central and western Europe, is currently undergoing trial tests at its interconnection with the Greek grid in Thessaloniki’s Nea Mesimvria area, sources have informed.

As things currently stand, gas grid operator DESFA should be ready to receive Azeri natural gas through the Nea Mesimvria point within the next few weeks, a development that will offer the Greek gas grid a fifth alternative supply entry point.

Completion of the trial testing, expected to last until next month, will enable the project’s commercial launch. Greek gas utility DEPA and Bulgaria’s BEH have reserved respective capacities at preceding auctions.

The TAP project’s launch promises to benefit the Greek economy and also bolster the country’s energy supply security.

At present, the national gas grid possesses three entry points. Russian gas enters Greece via the Nea Mesimvria point after crossing the Bulgarian system. Kipoi in Evros, northeastern Greece, linked to a Greek-Turkish pipeline, and the LNG terminal at the islet Revythoussa, just off Athens, represent the Greek system’s two other entry points.

Besides Nea Mesimvria, the TAP project, running across northern Greece and through Albania all the way across the Adriatic Sea to Italy, will also offer the Greek gas grid a fifth entry point via Italy.

Bulgaria’s BEH reserves local capacity for gas market entry

Bulgaria’s state-owned Bulgarian Energy Holdings, participating in a gas auction staged by Greek gas grid operator DESFA, has reserved gas infrastructure capacity at the national grid’s crossing with the new TAP line in Nea Mesimvria, west of Thessaloniki, establishing a base for entry into the Greek gas market.

Greek gas utility DEPA reserved the biggest share, 29,000 MWh per day, at the auction, while Bulgaria’s BEH secured a smaller share of 3,300 MWh per day.

The DESFA auction offered Nea Mesimvria infrastructure capacities for the first quarter of 2021.

Local market authorities regard the Bulgarian company’s move as a positive step that reignites interest in the Greek market.

It remains to be seen if BEH can attract customers in the Greek market and supply here, or whether its share of TAP line gas, even if modest, will end up being used for Bulgarian market needs.

Either way, the Bulgarian company’s initiative can be interpreted as a positive move by an international player seeing potential in the Greek market.

Significant steps towards maturity have been made in recent years, but the Greek gas market still has ground to cover before reaching levels of liquidity and transparency achieved by major markets and hubs in central and western Europe.

TAP’s commercial launch now on the final stretch

The Trans Adriatic Pipeline (TAP) project, to enable the delivery of Caspian gas to destinations throughout southeastern, central and western Europe, is almost ready for its commercial launch, four years after construction began and 17 years after its first feasibility study was conducted.

The project, running from the Shah Deniz gas field in Azerbaijan, will represent the EU’s main alternative route for natural gas, greatly contributing to the end of the continent’s dependence on Russian gas, supply security and intensified competition.

The TAP project will begin operating at a capacity of 10 billion cubic meters, annually.

Greece was the first of the project’s host countries to complete its segment of construction work, a 550-km stretch across northern Greece, from Evros’ Kipoi area in the northeast to Ieropigi in the Kastoria province, at the Greek-Albanian border.

Just days ago, Greece’s energy ministry approved the operation of the project’s Greek segment, running from Evros to Rodopi, Xanthi, Kavala, Drama, Serres, Thessaloniki, Kilkis, Pella, Imathia, Florina, Kozani and Kastroria.

Authorities of the project’s two other host nations, Albania and Italy, will soon grant their respective operating permits, sources informed.

The project’s commercial launch is expected to take place close to the final quarter this year, the energy ministry has announced.

The Greek and Italian gas grid operators, DESFA and Snam, respectively, will need to prepare their national grids so that natural gas quantities can reach consumers via TAP, sources added.

 

US backs Greece’s east Mediterranean activities, major projects

All countries in the east Mediterranean region must carry out their activities in accordance with international law, including the International Law of the Sea as stipulated by the 1982 United Nations Convention on the Law of the Sea, the Greek and US governments have jointly announced following a high-level virtual conference held yesterday on energy issues.

This statement clearly offers US support for the positions of Greece, facing Turkish provocation.

The working group’s participating Greek and US officials reiterated the commitment of the two countries to cooperate on the effort to diversify energy sources in southeast Europe, collaborate with regional partners for energy source development, and promote regional energy security.

The latest energy working group builds on steadily growing bilateral cooperation following Greek-US strategic dialogue meetings in December, 2018 and October, 2019, the joint announcement added.

The Greek team was represented by the Ministry of Foreign Affairs’ Deputy Minister for Economic Diplomacy and Openness Kostas Frangogiannis and Deputy Environment and Energy Minister Gerassimos Thomas (photo). The US team was represented by Assistant Secretary of State for Energy Resources Francis Fannon and Under Secretary of Energy Mark Menezes.

Fannon, the Assistant Secretary of State, expressed satisfaction on the completion of the Greek segment of the TAP gas pipeline project, to carry Azeri gas to Europe.

The US official also offered support for the ongoing construction of the Greek-Bulgarian IGB gas pipeline interconnection and the progress achieved in plans for an FSRU in Alexandroupoli, northeastern Greece, a South Kavala underground gas storage facility, and Greek-North Macedonian connection.

Six Greek heavyweights among DEPA Commercial contenders

Six major Greek energy market players are among the contenders through to the second round of the DEPA Commercial sale, the biggest domestic turnout for an energy-sector tender in recent years, highlighting the gas market’s significance and prospects over the next decade.

The country’s energy transition plan is aiming for zero emissions by 2030.

Hellenic Petroleum (ELPE), joined by Italian partner Edison, a Motor Oil and power utility PPC partnership, Mytilineos, Gek-Terna and the Copelouzos group are the six Greek contenders, among a list of seven bidding teams shortlisted for the DEPA Commercial sale’s final round, entailing binding bids.

Gas utility DEPA, from which DEPA Commercial has been established for the utility’s privatization, may have lost its monopoly in the natural gas market, but its assets and market share promise the new owner a leading position during Greece’s decade of decarbonization, electric vehicle market growth and drastic reduction in fuel consumption.

As a result, fierce bidding for DEPA Commercial is expected.

The company’s acquisition will provide the new owner with a portfolio of 350,000 customers plus DEPA Commercial’s international supply contracts with Russia’s Gazprom, supplying pipeline gas to the Greek company for years; Algeria’s Sonatrach, supplying LNG; and Turkey’s Botas.

Gas quantities from Azerbaijan have also been reserved by DEPA Commercial via the imminent TAP route.

 

 

 

DESFA considering west Macedonia pipeline expansion

Gas grid operator DESFA’s next ten-year development plan, for 2021 to 2030, may include gas network extension projects in areas that have not featured in previous plans, including northern Greece’s west Macedonia region.

The shape and extent of the pipeline network expansion plan will depend on the development, or not, of regional natural gas-fired power stations by electricity producers.

Preliminary considerations for DESFA’s new ten-year development plan come just weeks after a delayed approval by authorities of the operator’s ten-year plan covering 2020 to 2029.

A prospective decision by power grid operator PPC on whether its Ptolemaida V power station will operate as a natural gas-fired unit will be instrumental in shaping DESFA’s investment decisions for pipeline network expansions in the west Macedonia area.

DESFA also intends to develop metering stations at TAP project corridor points as the capacity to be offered by the TAP project will not suffice to cover regional needs if natural gas-fired power stations are developed in the west Macedonia region.

DESFA plans to construct three new metering and regulating stations in the Eordea, Kastoria and Aspros (Edessa, Naoussa, Giannitsa) areas, their budget totaling 8 million euros. These stations, whose completion is expected by the end of 2022, will enable the development of a mid and low-voltage network for natural gas transmission to these areas.

 

DESFA 10-year plan approved, virtual pipelines not included

Gas grid operator DESFA’s ten-year development plan has been approved by RAE, the Regulatory Authority for Energy, following a lengthy procedure, including consultation, that lasted several months.

A virtual pipeline proposal envisioning LNG supply to Crete, the north Aegean islands and the Dodecanese via tankers from the operator’s Revythoussa terminal just off Athens was left out of the approved plan. This is the ten-year plan’s only notable change compared to the draft forwarded for consultation.

LNG virtual pipelines serve as a substitute for conventional gas pipelines to enable the transport of LNG to points of use by sea, road or a combination of these.

The virtual pipeline proposal was removed from the DESFA ten-year plan following concerns expressed by consultation participants over higher surcharge costs for consumers that could have been imposed as part of the project’s cost recovery procedure.

The gas grid operator’s ten-year plan includes, for the first time, a natural gas outlet along the TAP route for the west Macedonia region in Greece’s north.

This TAP outlet, a project budgeted at 3 million euros and expected to be launched late in 2022, is intended to supply natural gas to the area’s provincial cities of Kozani, Ptolemaida, Florina and Amynteo for use at telethermal facilities as well as other energy needs in the post-lignite era.

The area’s telethermal system currently relies on energy produced by power utility PPC’s lignite-fired power stations, soon set for withdrawal as part of the country’s decarbonization effort.

 

DESFA wants key role in country’s infrastructure projects

Gas grid operator DESFA, controlled by Senfluga, a consortium formed by Snam, Enagas and Fluxys for their acquisition of a 66 percent stake of the operator in 2018, is determined to play a leading role in all the country’s infrastructure projects as well as Greece’s wider natural gas-related developments.

“We see our role as being that of the leader in Greece’s gas sector and the wider region. We are interested in every gas project and want to be able to claim it. We also have the know-how and strong shareholders to play such a role,” a DESFA official told energypress.

According to sources, DESFA’s emergence as a prospective buyer of DEPA Infrastructure, a new entity established by gas utility DEPA as part of its privatization procedure, prompted officials to slightly extend the sale deadline.

More specifically, Snam, the Senfluga consortium’s chief member with a 54 percent stake, requested a deadline extension for the DEPA Infrastructure as it has yet to decide on its partners for this bidding quest. Enagas and Fluxys each hold 18 percent stakes in Senfluga. The Copelouzos group’s Damco recently joined this consortium, buying a 10 percent stake.

DESFA’s influence is also believed to have persuaded officials to delay a decision on whether to classify the development of a natural gas storage facility at a depleted offshore gas field in the south Kavala region as a national or independent grid project.

Snam, Enagas and Fluxys are part of the six-member Trans Adriatic Pipeline (TAP) consortium.

DESFA, which has signed a Memorandum of Understanding for the Alexandroupoli FSRU, is now seriously considering to acquire a 20 percent stake in this venture, headed by Gastrade.

Other projects being considered by DESFA include a 175 million-euro Cretan LNG terminal that promises to resolve the island’s energy sufficiency concerns, as well as a 57.3-km gas pipeline connection linking the Thessaloniki area with North Macedonia, already included in the operator’s ten-year strategic plan.

 

RAE given 5 months to set Kavala underground gas storage charges

RAE, the Regulatory Authority for Energy, has been given five months to determine the pricing policy, regulated earnings and WACC for a planned underground gas storage facility at a depleted offshore gas field in the south Kavala region, according to an imminent joint ministerial decision, energypress understands.

The launch date of the project’s tender will depend on funding for project studies through the EU’s Connecting Europe Facility (CEF) program. This essentially means that the privatization fund TAIPED will need to officially launch the project within the first half of this year to avoid missing out on CEF funds.

The project’s investment cost is estimated at between 300 and 400 million euros.

France’s Engie as well as Energean Oil & Gas and GEK-Terna have formed a three-member consortium named Storengy in anticipation of the tender. DESFA, the gas grid operator, is also expected to participate in the tender.

The project, promising gas storage capacity of 360 million cubic meters, is considered vital for Greece as it will be able to maintain strategic reserves for considerable time periods.

Its development will help boost the performance level and strategic role of the Revythoussa LNG terminal just off Athens, and the prospective Alexandroupoli FSRU in the country’s northeast, as these will be able to supply the wider region greater gas quantities via the IGB and TAP gas pipelines.

The south Kavala project has been classified as a PCI project, offering EU funding opportunities, seen as crucial for the investment’s sustainability, according to some analysts.

‘DEPA key to Greece’s leading Balkan role, energy diversification’

Greek gas utility DEPA chief executive Konstantinos Xifaras met earlier today with the U.S. Ambassador to Greece, Geoffrey Pyatt (photo), for a meeting focused on the recent energy-related developments in Southeast Europe as well as on the progress of significant projects in the wider region, currently under way or in design phase, such as the IGB pipeline, the Alexandroupoli FSRU and the EastMed pipeline, a project of strategic importance.

Following the meeting, Ambassador Pyatt remarked: “Greece is a leader in the Balkans in providing energy security and diversification of energy sources, and DEPA is key to its strategy. The U.S. therefore strongly supports DEPA’s participation in major projects that advance this strategy, particularly the Alexandroupoli FSRU, the IGB, TAP and potential EastMed pipeline, which are literally changing the energy map of Europe. These projects are critical for regional peace and security and will make Greece a regional energy hub.”

The DEPA chief commented: “We discussed, with the Ambassador, the course of significant energy projects currently under way in our region, in which DEPA has a leading role.  Over the past months, our company has striven to strengthen its position in the regional energy market, achieving notable cost reductions as well as expanding its activities in new sectors and products. At the same time, we remain focused on the double privatization [DEPA Trade, DEPA Infrastructure] and we are upgrading our participation in these international projects developing Greece into a regional energy hub, safeguarding, at the same time, the diversity of supply sources to the benefit of the country and consumers.”

 

PPC, seeking gas market role, wants 500 bcm at FSRU in Alexandroupoli

Power utility PPC, seeking a strategic role in Greece’s natural gas market, intends to submit a capacity reservation offer to an ongoing Alexandroupoli FSRU second-round market test for approximately 500 million cubic meters per year.

PPC has reached a decision and is preparing to submit its offer within the next few weeks, energypress sources informed.

A capacity reservation at the prospective Alexandroupoli FSRU in Greece’s northeast is crucial for PPC following its recent failure to secure slots in 2020 for the LNG terminal on the islet Revythoussa, just off Athens.

PPC’s Alexandroupoli FSRU interest is driven by two objectives, firstly, to cover natural gas needs at its gas-fueled power stations, and secondly, to trade gas in the wholesale market, like the sector’s other major players. Besides the Greek market, PPC also sees gas trading opportunities in the wider region of southeast Europe.

PPC is determined to establish its place in a sector being transformed by the development of major trans-boundary projects, namely TAP and IGB. Domestically, the Alexandroupoli FSRU and an underground gas storage facility at a depleted offshore gas field in the south Kavala region also offer major potential for PPC.

The Alexandroupoli FSRU market test has generated considerable interest – unofficial until now – seen easily covering terms set to ensure the project’s sustainability before any finalized investment decision is made for development.

Greek gas utility DEPA, now holding a 20 percent stake in the Alexandroupoli FSRU consortium, will definitely seek to reserve capacity. Bulgaria’s Bulgargaz, also a 20 percent shareholder, will participate in the second-round market test seeking an annual capacity of between 300 to 500 million cubic meters, according to a Reuters report.

Many of the first-round market test’s 20 participants, plus a number of new faces, have emerged for the procedure’s binding second round, sources informed.

First round Alexandroupoli FSRU offers more than doubled a total capacity of 5.5 bcm to reach 12.2 bcm.

 

Operator DESFA seeks role in Greek infrastructure projects

Greek gas grid operator DESFA, driven by the three-member consortium of Snam, Enagas and Fluxys now controlling the company with a 66 percent stake, appears determined to stretch beyond its operator role and become one of the biggest and most pivotal players in the domestic energy market, judging by its interest in major Greek-related natural gas projects now in progress.

According to energypress sources, DESFA’s administration is looking to acquire stakes in three key energy infrastructure projects: the prospective floating LNG terminal (FSRU) in Alexandroupoli, northeastern Greece; the planned underground gas storage facility at a depleted natural gas field in the offshore south Kavala region; and DEPA Infrastructure, one of gas utility DEPA’s two new corporate entities heading for privatization.

The chief executives of Snam, Enagas and Fluxys, major European operators also holding respective stakes in the TAP project, met yesterday with Greek Prime Minister Kyriakos Mitsotakis.

The officials requested first-hand information on the government’s energy market decisions following the delivery of a new and more ambitious National Energy and Climate Plan and the signing of a trilateral agreement between Greece, Cyprus and Israel for the East Med gas pipeline.

The Greek operator’s controlling consortium also presented investment plans supporting the country’s decarbonization strategy and aspirations to become a regional energy hub.

Drastic changes to reshape energy sector by end of 2020

Major developments in Greece’s energy sector, from lignite to natural gas, renewable energy, energy efficiency, as well as the geopolitical effects, promise a drastic reshape of the sector over the next year.

A first batch of power utility PPC’s existing lignite-fired power stations will have ceased operating as part of a plan for a full withdrawal by the end of 2023. PPC will have a reduced number of employees on its payroll. This will have positively impacted the utility’s profit figures.

Also, a first round of major renewable energy projects expected to be launched by PPC subsidiary PPC Renewables through partnerships, as part of the parent company’s wider turn to green energy, will intensify competition in the renewable energy market.

Furthermore, this time next year, assets currently belonging to gas utility DEPA, both in trade and infrastructure, may have been transferred to new owners. This development promises to reshape the entrepreneurial map as the private sector’s dominance will be absolute.

In the retail market, the number of players is expected to have diminished as a result of a new round of takeovers and mergers, amid heightened competition, as was also the case in telecommunications in the recent past.

In addition, Greece’s energy exchange will have clocked up several months of operations by the end of the year. Its arrival will intensify competition, remove market distortions and allow dormant potential to be realized through coupling with neighboring markets.

By the end of 2020, the TAP gas pipeline will have begun delivering its first orders of Azeri gas to Europe, the Greek-Bulgarian IGB gas pipeline will be nearing completion, while procedures leading to the development of the Alexandroupoli FSRU and an underground gas storage facility in the offshore area south of Kavala will have made progress.

Without a doubt, Greece’s energy sector appears to be waking up to the new reality, leaving behind anachronistic perceptions and embracing the green energy revolution. The country is now adopting new ways implemented by the overwhelming majority of European territories two decades earlier.

 

East Med, IGB, Alexandroupoli FSRU upgrading Greek role

Three major energy projects of international dimension, the East Med and IGB natural gas pipelines, as well as the Alexandroupoli FSRU (Floating Storage Regasification Unit), all once seeming distant prospects, are now gradually turning into a close reality.

Their development promise to transform Greece into an energy hub and upgrade the country’s geopolitical standing in the fragile southeast Mediterranean and Balkan regions.

The leaders of Greece, Cyprus and Israel are set to sign a trilateral agreement for East Med, to carry natural gas to Europe via these countries and Italy, at a meeting in Athens on January 2. The transmission capacity of this project, measuring 2,000 km, will range between 10 to 20 billion cubic meters. Italy is also expected to eventually join the partnership for this project.

Its development prospects have been further propelled by a decision from Poseidon, a 50-50 joint venture involving Greek gas utility DEPA and Italy’s Edison, to accelerate the completion of all pending issues needed for the project’s maturity.

The trilateral agreement promises to further bolster ties between Greece, Cyprus and Israel amid a period of heightened regional intensity. Turkish provocation has escalated. An East Med Gas Forum to take place in Cairo January 15 and 16 with participation from the energy ministers of Greece, Cyprus, Israel, Egypt, Jordan and the Palestinian Authority should help expand the alliance.

The Greek-Bulgarian IGB gas pipeline is expected to have begun operating far sooner, in July, 2021. DEPA holds a 25 percent stake in ICGB, the consortium overseeing the IGB project, whose initial capacity will be 3 bcm. Through this pipeline, DEPA plans to supply the Bulgarian market with Azeri gas hailing from the TAP route, and, as a result, break, for the first time, the existing Russian monopoly in the neighboring market.

The IGB will not only be fed by TAP, running westwards across northern Greece for Azeri supply to Europe. The Alexandroupoli FSRU to be anchored off coastal Alexandroupoli, northeastern Greece, will also feed the IGB, enabling an alternative gas supply source for Bulgaria, other east European countries, and Ukraine.

DEPA is also involved in this project. The gas utility has just decided to acquire a 20 percent stake in Gastrade, the company developing the FSRU project in Alexandroupoli.

Leading Washington officials have expressed their support for the East Med, IGB and Alexandroupoli FSRU projects. Prime Minister Kyriakos Mitsotakis will be seeking confirmation of this backing on an upcoming official trip to the US from President Donald Trump himself.

 

DEPA, pivotal for Greek energy plan, pushing ahead internationally

Through its strategic involvement in an array of pipeline and infrastructure projects, Greek gas utility DEPA is becoming a key driver of Greece’s geopolitical upgrade and the diversification of supply sources for the wider region of South-East Europe.

DEPA is establishing its position in the region through a series of significant international projects such as the acceleration of IGB pipeline construction, participation in the IGI Poseidon pipeline  interconnecting Greece and Italy, and, surely, booking capacity in TAP which, from 2020 onwards, will transport Caspian gas to Europe.

Developments around East Med Pipeline are also rapid, with the most recent being IGI Poseidon’s (the 50% – 50% JV between DEPA S.A. and Edison S.p.A ) BoD decision to fast-track the completion of all pending stages that will bring the project to maturity.  The €70 million Feasibility Study is being accelerated, along with every other stage, to complete the East Med pipeline’s design, which will also pave the way for the final investment decision.

All the above are just one part of DEPA’s multifaceted international activity. Prior to that, in October, a bilateral agreement was signed in Sofia for the start of IGB pipeline construction, a project overseen by ICGB AD, in which DEPA has a 25% stake.

The project is expected to go into operation in July 2021, with an initial capacity of 3 billion cubic meters. At first, the entire load of gas will come from TAP that will go into operation within 2020, delivering Azeri gas to European markets, in which DEPA has booked capacity of 1 billion cubic meters. Thus, through IGB, the company will supply the Bulgarian market with Caspian gas, “breaking” for the first time the existing Russian monopoly.

Another major development took place just yesterday, when the company’s Board of Directors approved the participation of DEPA, with a 20% stake, to the equity of GASTRADE, the company developing the FSRU project in Alexandroupolis.

The Terminal is complementary to the IGB pipeline and consists of an FSRU (Floating Storage Regasification Unit), anchored 10 km off the coastal area of ​​Alexandroupolis, with storage capacity up to 170,000 cubic meters of LNG and 22.7 million cubic meters daily regasification capacity, per day (8.3 billion m3 / year), as well as a 28 km long onshore and subsea pipeline system.

The international presence of the company is also enhanced by the Greek-Italian energy interconnection through the IGI Poseidon pipeline, as well as the CYNERGY program that “breaks” Cyprus energy isolation by establishing a natural gas supply chain in the country.

Apart from its participation in international projects, equally important are the company’s long-term supply contracts with Russian Gazprom, Turkish BOTAS, Algerian Sonatrach, IGSC (Azerbaijan) through the TAP pipeline, as well as the procurement of significant quantities of LNG through the global SPOT market, at competitive prices.

DEPA’s CEO, Konstantinos Xifaras, summed up the company’s international role:

“For thirty years, DEPA has been a leading player in the Balkan energy sector, as well as an integral part of the European strategy for energy diversification and security of supply both of Greece and Europe.

At the same time, by deploying multilayered energy diplomacy and participating in major international projects, DEPA establishes Greece as a regional energy hub and upgrades its economic and geo-strategic importance.”

DEPA’s footprint is solid in the domestic energy market as well, where it recently prevailed in a tender process for natural gas supply to PPC in 2020. The company acknowledged as one of the two bidders, with the ability to supply PPC with 2 million MWh.

Gas supply for post-lignite west Macedonia added to grid plan

A natural gas outlet – stemming from the TAP project – for supply to Greece’s west Macedonian region intended to help cover the region’s energy needs in the post-lignite era is one of the few new features added to a gas grid operator DESFA ten-year development plan covering 2020 to 2029, slightly revised compared to its previous version.

The aim is to supply natural gas through pipelines to the region’s provincial cities of Kozani, Ptolemaida, Florina and Amynteo for use at telethermal facilities, currently operating through heat produced at power utility PPC’s lignite-fired power stations.

These PPC units, however, will soon be withdrawn as part of the government’s plan for a decarbonized Greece by 2028, incorporated into a new National Energy and Climate Plan.

The national gas grid’s 10-year development plan, prepared by DESFA, is undergoing public consultation for the second time since August for feedback on its minor changes, including the gas supply plan for west Macedonia.

The first round of public consultation was staged by DESFA while the second round is being held by RAE, the Regulatory Authority for Energy.

A total of 49 projects budgeted at over 2.5 billion euros, overall, are included in the ten-year plan. Responses to the latest public consultation procedure face a January 10 deadline.

Italian energy firms eyeing array of local investments, PM in Italy

Italian investors are displaying widespread interest for energy investments in the Greek market, including possible stakes in distribution network operator DEDDIE/HEDNO, power grid operator IPTO, gas utility DEPA’s two new entities DEPA Trade and DEPA Infrastructure, as well as joint ventures in wind energy stations, electric vehicle projects and smart grids.

Deputy energy minister Gerassimos Thomas, joining Prime Minister Kyriakos Mitsotakis on an official visit to Rome today, is expected to be informed of this Italian investment interest. Thomas is scheduled to meet with Italian economic development minister Stefano Patuanelli.

The Greek Prime Minister, to meet with his Italian counterpart Giuseppe Conte, can also expect to hear of this Italian investment interest during talks which, besides the refugee crisis, will also address cross-border energy projects such as TAP and East Med.

Snam maintains the most emblematic of Italian investments in the Greek market at present with a 66 percent stake in gas grid operator DESFA, including control of the country’s natural gas transmission and storage infrastructure.

Italian firms are regarded as pioneers in a number of green-energy domains, including smart grids, electric vehicle recharging station installations along highways, even wave power projects.

Just days ago, a consortium comprising Eni, Fincantieri and Terna announced it would commercially develop its pilot project Inertial Sea Wave Energy Converter (ISWEC) for wave energy generation, initially at small Italian islands, followed by projects abroad.

The Greek Prime Minister and his energy deputy will also meet with Italian entrepreneurs, including Eni gas e luce chief executive Alberto Chiarini.

Italy’s Terna, one of Europe’s biggest transmission system operators, is believed to be interested in acquiring a stake of IPTO and its Ariadne subsidiary, project promoter of the submarine Crete-Athens grid interconnection.

Enel is considering moves into networks, renewable energy investments and the electric vehicles sector.

Italgas, Italy’s biggest gas distributor and the continent’s third biggest, appears interested in DEPA Infrastructure. Italgas is believed to have reached a preliminary agreement to acquire fellow Italian company Eni gas e luce’s 49 percent stake and management rights in EDA Thess, covering the Thessaloniki and Thessaly areas.

Eni, increasing its involvement in pioneering projects, including wave energy, is believed to be looking to increase its Greek market presence, possibly through acquisitions.