TTF hike raises concerns over perceived ‘return to normality’

A steady rise in the TTF index over the past few days, following more than a year of decline, has market players concerned about the direction natural gas prices could take for the rest of this year.

The TTF, Europe’s gas benchmark, had fallen to as low as 23 euros per MWh a few weeks ago but has now rebounded, reaching a level of 28 euros per MWh yesterday. Gas futures dated December, 2024 and onwards are currently priced at over 30 euros per MWh.

The rising trend comes following a very mild winter of low consumption, which, however, was higher compared to last year.

Market players do not appear to be fully convinced by Europe’s extension of measures aiming to reduce demand for yet another year, until the end of next winter.

The recent insecurity that has crept into the market appears to stem from Europe’s anticipated loss of Russian gas imported via a Ukrainian corridor. A five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

This bilateral agreement’s end is expected to reduce the EU’s total gas imports by 5 percent. The loss will need to be offset by an increase in LNG shipments.

Unfavorable news from across the Atlantic has further unsettled market players. Natural gas producers such as EQT have decided to reduce output as a result of extremely low gas prices in the domestic market.

The downward trajectory of the TTF in recent months was driven by weak demand in Asia, including China, a trend whose continuation cannot be depended on. Also, the EU cannot count on next winter being as mild as the previous two winters.

 

EU energy-crisis concerns over Ukraine corridor ‘manageable’

European fears of further energy-crisis woes that could result from the nearing end of a five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine, appear to be manageable, as long as a series of specific measures are implemented, most EU ministers responsible for energy agreed at an Energy Council in Brussels yesterday.

The bilateral agreement between Ukraine and Russia expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

Further energy-crisis concerns as a consequence of this agreement’s conclusion, expected to reduce the EU’s total gas imports by 5 percent, can be prevented if EU member states speed up their development of roughly 20 LNG facilities planned from Europe’s north to south; renewable energy investments gain further momentum; energy-savings measures are continued; natural gas consumption reductions continue at the current rate; and LNG imports are increased to make up for reduced Russian gas imports, energy ministers of most EU member states agreed at the Brussels meeting.

Last year, approximately 14 bcm of Russian gas was transported through the Ukrainian corridor to countries such as Austria, Hungary and Slovakia.

Numerous EU member states achieved renewable energy production all-time highs last year. In Portugal, renewables covered 61 percent of the country’s energy needs in 2023. RES coverage of Greece’s energy needs reached 57 percent. In Germany, RES units met 52 percent of the country’s energy needs, while in Belgium the figure reached over 30 percent.

European fears of further energy-crisis woes not yet over

European Commission officials fear the continent has yet to fully break away from further energy-crisis dangers, despite capacity-filled gas storage facilities and a mild winter, as a five-year bilateral pipeline gas transit agreement signed by Kyiv and Moscow in 2019, three years before Russia’s invasion of Ukraine, is set to expire at the end of this year and could lead to higher energy prices.

The agreement’s end would reduce the EU’s total gas imports by 5 percent, the European Commission has briefed Brussels officials in a memo, Politico has revealed. Countries in central and southeast Europe would be particularly affected, the memo notes.

Natural gas supply to EU member states has continued through this Ukrainian-Russian transit agreement, despite the ongoing war.

However, Ukraine has declared it does not intend to renew this agreement, which  facilitates Russian gas supply to Europe, while European Commissioner for Energy Kadri Simson has noted it is not in the EU’s interests to push for an extension.

 

 

PPC, a regional player, turning into an energy ambassador

Power utility PPC’s strategic moves into southeast European markets are becoming a powerful tool of economic diplomacy for Greece and the country’s interests in the wider region as control of energy corridors and resources is equivalent to geopolitical power.

PPC’s chief executive Giorgos Stassis and his associates have been making more regular and intensified contact of late with government officials in the wider region and across the Atlantic.

Stassis’ meeting with Geoffrey Pyatt, the US’s Assistant Secretary of State for Energy Resources, in Washington just over a week ago, followed by a meeting earlier this week with Romanian Prime Minister Marcel Ciolacu, highlight the important diplomatic role now been played by PPC.

During their Washington meeting, Stassis and the US’s Assistant Secretary of State for Energy Resources discussed how PPC could play a more active role through east Europe’s major energy corridors and the US-backed Three Seas initiative, involving 13 Baltic Sea, Black Sea and Adriatic Sea countries and aiming to offer protection against the threat of Russia.

The US sees Greece’s initiatives in the wider region as moves that are aligned with America’s geostrategic interests, especially at a time when Russia’s war in Ukraine has turned arming eastern Europe against Russian influence into a priority.

US sees American interests in PPC’s southeast Europe plans

Greek power utility PPC’s aspirations to establish itself as a key energy market player in the Balkans and southeast Europe is being embraced by US investors who, through such a development, see further potential for interests of their own, given the excellent standing of Greek-US bilateral ties.

Protecting the region’s energy sufficiency from the threat posed by Russia remains a top priority for the US, which also sees potential for American interests in PPC’s plans to penetrate markets in the Balkans and beyond with large quantities of renewable energy.

PPC’s chief executive Giorgos Stassis made note of the power utility’s plans for southeast Europe, and also referred to the wider Three Seas Initiative in an announcement made yesterday following a meeting with Geoffrey Pyatt, US Assistant Secretary of State for Energy Resources.

The Three Seas Initiative, presently covering 13 countries between the Baltic Sea, Black Sea and Adriatic Sea, aims to attract major investments from the EU and the US in the areas of road and rail transport, economy, energy infrastructure for transmission of renewable energy, fiber optic development and everything needed to launch 5G telecommunication networks.

Greece, Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia are all included in the Three Seas Initiative, while Ukraine and Moldova were granted membership rights last September.

EU support sought for half of Vertical Corridor’s €450m budgeted cost

The Vertical Corridor, a European gas-pipeline system now planned to involve TSOs of seven countries – Greece, Bulgaria, Romania, Hungary, Slovakia, Moldova and Ukraine – will require an estimated 450 million euros in investments, energypress sources have noted.

Greek gas grid operator DESFA’s share of this sum will be minimal as a compressor station at Komotini, northeastern Greece, is all it will need to contribute to the project. All other upgrades to Greece’s gas grid, which, once completed, would enable the country to serve as a Vertical Corridor entry point, are already under development.

Officials of the six other countries participating in the project through initiatives taken by local TSOs believe that 50 percent of the project’s budgeted cost would need to be covered by EU funds if Vertical Corridor is to be materialized.

Project participants will push for political commitment from the European Commission by March as the upcoming European elections and any leadership changes would result in delays.

This issue was raised during a two-day ministerial conference staged by the Central and South-Eastern European Gas Connectivity Group (CESEC) in Athens last week, a gathering attended by European Commissioner for Energy Kadri Simson, but no indications of Brussels’ stance were offered.

Vertical Corridor project members are now expected to intensify their call to the European Commission for political support regarding the project’s development.

Following an initiative taken by Slovakia, an MoU was signed at the CESEC meeting in Athens to bring Moldova and Ukraine into the Vertical Corridor project.

Besides TSOs from the seven participating countries, Gastrade, a consortium established by the Copelouzos group for the imminent Alexandroupoli FSRU at Greece’s northeastern port of Alexandroupoli, and ICGB, the consortium behind the Greek-Bulgarian IGB gas pipeline, are also involved in the Vertical Corridor initiative.

Vertical Corridor meeting to gather project participants

Pivotal European energy infrastructure projects such as a vertical gas corridor, crucial for decoupling the region from Russian gas, an initiative which Ukraine and Moldova will officially join; a Greek-Cypriot-Israeli electrical grid interconnection; as well as hydrogen-related plans, will all be tabled for discussion at a meeting in Athens today between the energy ministers of southeast Europe.

Participants at the CESEC (Central and South Eastern Europe Energy Connectivity) meeting will be focusing on the most mature cross-border and trans-European gas and electricity projects that promise to enhance southeast Europe’s energy autonomy and upgrade its geopolitical importance.

Important remaining priorities concerning the vertical corridor include completion of its  Bulgaria-Romania pipeline segment; and to officially bring Ukraine and Moldova into the project’s picture. As part of the process, Greek gas grid operator DESFA is today expected to sign an MoU will all TSOs involved.

The vertical corridor includes a 182-km Greek-Bulgarian pipeline, the Bulgarian-Romanian section, and its interconnection with the network on the border with Ukraine and Moldova.

This corridor, combined with the imminent launch of the 5.5-bcm capacity Alexandroupoli FSRU, in Greece’s northeast, is expected to accelerate Europe’s effort to decouple the continent’s southeast from Russian energy dependence.

 

Gastrade Alexandroupoli FSRU anchors for testing, launch

The Alexandroupoli FSRU, a floating natural gas liquefaction and storage unit to be installed at the country’s northeastern port of Alexandroupoli by Gastrade, a consortium established by the Copelouzos group for the project’s development and operation, has just entered the Thracian Sea and anchored after setting sail November 26 from Singapore’s Seatrium shipyard, where the unit was developed over a period of nearly ten months.

The FSRU’s arrival to its permanent anchorage marks the completion of a project of major importance for the national and local economies.

In the coming days, the FSRU will be moored through a twelve-point mooring system before being connected to a high-pressure subsea and onshore gas transmission pipeline, which, once operational, will deliver gas to the Greek gas network and, subsequently, consumers in Greece, Bulgaria, Romania, North Macedonia, Serbia, Moldova, Ukraine, Hungary and Slovakia.

The FSRU’s commercial launch is planned for the first quarter of 2024, once testing has been completed. The unit will offer a 5.5-bcm annual liquefaction capacity.

 

Levy on gas used for power production to end January 1

The energy ministry has decided to terminate, as of January 1, a special levy imposed on natural gas used for electricity production, energypress sources have informed.

The special levy has been applied by the energy ministry as a tool to limit domestic gas consumption and, as a result, help subdue gas prices. Up until recently, the ministry was considering to extend the levy for a brief period into 2024.

The energy committee at SEV, the Hellenic Association of Industrialists, had pushed for this special levy to be terminated during a recent meeting with the energy ministry’s leadership in late October.

At the time, the ministry officials refused to offer any specific withdrawal date for the levy, noting the matter would be examined with the course of international gas prices in mind. The ministry officials indicated the levy would be maintained if international gas prices remained at levels of the time, or increased.

However, international gas prices have since fallen. Last week, the TTF index fell to 38 euros per MWh, a level not recorded since early 2022, prior to Russia’s invasion of Ukraine and the attack’s impact on energy markets.

This price de-escalation in international markets should eliminate any risk of a demand-driven natural gas price increase in Greece, officials believe.

The special levy’s formula was revised in May to 5 percent of the TTF, replacing a previous flat rate of 10 euros per MWh that had been introduced in November, 2022.

PM prioritizes south-north link in talks with German leader

Green Aegean, a electricity supply corridor envisaged, by Athens, to run from Greece to Germany’s south, dominated talks between Prime Minister Kyriakos Mitsotakis and German Chancellor Olaf Scholz in Berlin yesterday, sources close to the Greek leader have informed.

Mitsotakis, determined to promote this project, prioritized Green Aegean over the European migrant crisis and the Middle East conflict at yesterday’s meeting.

The German side, no longer appearing worried about the Greek economy, was keen to listen to the Greek leader’s views on the south-north corridor, but, despite agreeing with Mitsotakis on most points raised, refrained from expressing any clear position, either because of other priorities or because Berlin remains unconvinced about the project’s financial sustainability.

Mitsotakis presented Green Aegean as an important plan for both countries, noting Germany’s energy needs are high in winter, and have become even more acute ever since low-cost Russian gas supply stopped flowing as a consequence of Moscow’s war in Ukraine, while energy demand in Greece is high during the summer.

Berlin is well aware of the fact that additional green-energy sources will be needed, beyond large-scale offshore wind farms in the North Sea, if German industry is to become carbon-neutral by 2050.

For its part, Athens knows very well that problems will arise in the future if RES output does not reach central Europe. Greek RES output is already many times over the country’s needs and grid capacity. Also, green energy the country aspires to import from Egypt and the Middle East will require a new electricity corridor to Europe’s north. Without such an export corridor, north African and Middle Eastern producers will surely look elsewhere for pathways to Europe.

Biomethane sector draft bill forwarded for consultation

A draft bill for the development of Greece’s biomethane sector is ready and set to be forwarded for consultation, deputy energy minister Alexandra Sdoukou has told a conference organized by the Hellenic Association of Biogas Producers (HABIO/ESPAV).

Consultation on the draft bill will, according to the energy ministry plan, begin with a closed procedure involving biomethane producers, supply companies, gas operators and other public entities directly associated with the sector, to provide initial comments and observations on the draft bill for preliminary corrections.

The consultation procedure will then continue as normal with the aim of being completed by the end of the year so that legislation procedure may begin early in 2024.

The ministry opted for a double-staged consultation procedure believing it will bring the shape of the legislative proposal as close as possible to completion, having taken into account the views of market officials. A similar route was followed to update the National Energy and Climate Plan.

Investment support for the biomethane sector will be sought through the REPowerEU facility, introduced by the European Commission, in response to the 2022 Russian invasion of Ukraine, to end the EU’s reliance on Russian fossil fuels before 2030.

Ministry’s single variable tariff intended to boost competition

A decision by energy minister Thodoris Skylakakis to introduce – as of January, for 12 months – a single variable tariff formula for all electricity suppliers, whose level they will set depending on respective profit-margin strategies, is intended to intensify competition leading to lower prices, or at least, price containment at reasonable levels.

The application of a single pricing formula, to be made available to all electricity suppliers, will enable consumers to make instant price comparisons with the push of a button, not possible under the current complicated system.

“If I were to ask you who the lowest-price supplier is would you know? The problem is that we don’t have a common tariff offered by all suppliers. A common tariff will now exist. All details will be announced within the next ten days,” Skylakakis, the energy minister, told local radio station Parapolitika yesterday.

All electricity consumers will be automatically transferred to the new single variable tariff as of January 1, unless they opt, prior to this date, for any other supply deals offered by suppliers.

The energy ministry estimates over 4 million consumers, or at least 70 percent of 5.7 million in total, will favor an automatic transferal to the new single variable tariff over any of the new products to be made available by suppliers.

Some market officials believe consumer preference for the new single variable tariff will be even greater.

Authorities are preparing for the Greek electricity market’s return to normality as of January 1, when subsidies are planned to end and indexation clauses reintroduced.

However, market conditions are currently adverse and challenging given last week’s outbreak of the Israel-Gaza war as an addition to Russia’s ongoing war in Ukraine.

A continuation of current market trends and conditions, which have pushed natural gas prices up 36 percent since the beginning of October, to 49 euros per MWh, would inevitably result in higher domestic electricity prices in January.

Nuclear plants, Baltic pipeline on energy council agenda

Electricity market reforms, the energy situation in Ukraine, progress on revised National Energy and Climate Plan appraisals, energy-efficiency financing matters, Europe’s preparations for winter, the shutdown of the Baltic-connector pipeline, CO2 emission rights, as well as nuclear power plant support are among the agenda items to be discussed at today’s EU energy council.

On the electricity market reforms front, support for nuclear power plants will be a key agenda topic. France and nine other EU member states are expected to call for two-way Contracts for Difference. Germany has already expressed reservations, fearing the impact of CfDs on the rest of the market if unconditionally applied.

This disagreement needs to be resolved as quickly as possible so that the revised market structure can be finalized and adopted by the end of the year. Market players are confident a compromise solution will be found before the end of this month.

European Commissioner for Energy Kadri Simson is expected to update EU energy ministers on how assessments of revised NECPs are progressing.

Also, Finland and Estonia will inform fellow EU members on any findings of an investigation conducted to determine the cause of damage discovered last week at the Baltic-connector gas pipeline, used by the two countries for access to an underground gas storage facility in Latvia. Suspicions of sabotage have been raised.

Alexandroupoli FSRU on track for early-2024 launch

Development of the Alexandroupoli FSRU at the country’s northeastern port is progressing steadily and set for an on-schedule launch by the end of January, 2024, energypress sources have informed.

Tanker conversion work being conducted for the FSRU at Singapore’s Keppel Shipyard was 87.1 percent ready at the end of August, meaning all basic equipment, including burners and gasifiers, has been installed, the sources added.

Representatives of Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, visited the Keppel Shipyard just days ago.  The consortium’s chief executive, Kostis Sifneos, headed the visiting group.

The consortium’s members – the Copelouzos group’s Elmina Copelouzou, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz and Greek gas grid operator DESFA, all holding 20 percent shares – plan to soon hold a meeting to discuss the project’s steps leading to its launch, the sources added.

The FSRU vessel is expected to be ready to set sail for Alexandroupoli in mid-November, before reaching its destination in early December.

The Alexandroupoli FSRU, to offer a 153,500-m3 LNG capacity, will be connected to Greece’s gas network via a 28-km pipeline, through which gasified LNG will be distributed to the domestic market, Bulgaria, Romania, Serbia, North Macedonia, Hungary, Moldova and Ukraine.

The project will serve as a new energy gateway promising to play a key role in the energy security and independence of Greece as well as central and southeast Europe.

PPC chief to take part in Romanian Three Seas meeting

Greece aims to bolster its geopolitical influence in the Balkans through energy, power utility PPC’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania being a key part of this strategy.

In addition to PPC’s takeover of ENEL Romania, Helleniq Energy recently invested in Romania and had been preceded by Mytilineos – both in renewable energy projects.

PPC’s ENEL Romania takeover has prompted an announcement from Romanian president Klaus Iohannis, who named Greece as a new member of The Three Seas, a diplomatic initiative taken by Romania’s political leadership to bring together EU member states and candidates located between the Baltic, Adriatic and Black Seas for collaboration in the fields of energy, infrastructure and the digital economy.

Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Slovakia, Slovenia, and Ukraine are the other members of The Three Seas initiative.

Iohannis, Romania’s president, will host a two-day meeting in Bucharest on September 6 and 7 for talks on collaboration in these domains. Ministers and entrepreneurs representing the aforementioned countries, including PPC’s chief executive officer Giorgos Stassis, energypress sources have informed, will take part at the upcoming Bucharest meeting.

Romania has become a geopolitical focal point as a result of the country’s close proximity to war-entangled Ukraine. In addition, Bucharest has established a pivotal role as a result of its support of Ukraine in the war with Russia and Moldova’s EU membership quest. Romania has also facilitated the movement of grain across its borders.

Collective gas orders increase in second purchasing round

A second round of collective European gas purchases, through a platform similar to one established for vaccine orders during the pandemic, has resulted in natural gas orders totaling nearly 12 bcm, well over a quantity ordered during the procedure’s first round in May.

However, the EU initiative fell short of attracting full participation. Second-round orders were delivered to twenty European grid entry points, the majority of quantities at entry points in the Netherlands, France, Italy, Bulgaria and Germany, as well as Ukrainian storage facilities, Sefcovic noted.

“The positive results of this second round illustrate that there is a need and clear added value to join forces, pool our demand and work together to guarantee stable and affordable gas supply to the EU market,” noted the European Commission’s Vice President Maros Sefcovic, who oversees the platform, named AggregateEU.

It was established by the EU following Russia’s invasion of Ukraine to prevent bidding wars between fellow member states and utilize their collective bargaining power potential for competitively priced energy supply as an alternative to Russian natural gas.

Approximately 5.5 bcm, or 45 percent, of the second round’s orders, totaling 11.98 bcm, were made for LNG, well over this energy source’s share of orders in the first round, below 20 percent of the total. Pipeline gas represented all other collective orders made through the platform in the second round.

A third round is expected to be staged in September and is planned to be followed by two further rounds before the end of the year.

EuroAsia Interconnector funds threatened by project delays

EU authorities appear to have issued a strict warning to Cyprus over major delays in binding scheduling terms for EuroAsia Interconnector, a project of strategic importance planned to interconnect the Greek, Cypriot and Israeli power grids.

According to sources, the EU has warned the Cypriot government that if appropriate decisions are not taken immediately to ensure that the project can be put back on track, then a decision offering 657 million euros worth of Connecting Europe Facility (CEF) funding for the PCI-listed project would need to be reviewed.

In response, Cypriot president Nikos Christodoulides held an emergency meeting last Friday with Nasos Ktorides, CEO of the EuroAsia Interconnector consortium, and the country’s energy minister George Papanastasiou.

Though no official announcements have been made, Cypriot press has reported that the government intends to engage directly and vigorously at the highest political level to secure the planned funding for the project.

Delays include Greek power grid operator IPTO’s entry into the EuroAsia Interconnector consortium with a 25 percent stake. A strategic agreement was announced at the end of June but the matter has not progressed further as due diligence remains unfinished.

The EU has insisted on IPTO’s participation as, on the one hand, the project will be connected to the Greek operator’s networks in Crete, and on the other, IPTO, it is believed, would ensure the project’s technical integrity and operational viability.

EuroAsia Interconnector has also been held back by the consortium’s delay in signing a contract with Norwegian company Nexans, to manufacture the project’s subsea cable.

This delay threatens to deprive EuroAsia Interconnector of its intended production slot at Nexans because the manufacturer faces high demand for cables from countries such as Germany and the Baltic countries as a result of Russia’s war in Ukraine.

 

 

 

Alexandroupoli FSRU pipeline work in progress, tanker to arrive November

Development work for the Alexandroupoli FSRU at the country’s northeastern port is in full progress on all fronts, in preparation for the project’s launch early next year.

Besides the project’s floating LNG storage and regasification infrastructure, work is also in progress on the offshore and onshore pipelines to transmit gas to the national grid and, from there, the Greek-Bulgarian IGB pipeline connection for gas quantities to the Balkans.

Officials at Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, offered an on-site presentation of the FSRU’s work in progress to visiting ambassadors. This mission was organized by George Tsounis, the US ambassador to Greece, and included the ambassadors of Bulgaria, Romania, Moldova and Ukraine.

The FSRU’s subsea pipelines, to measure 24 km, and overland pipelines, measuring a further 4 km, have been delivered to the Alexandroupoli port for installation.

The Alexandroupoli FSRU promises to serve as an additional source of gas supply for Greece and other Balkan countries. Quantities will be transmitted through the IGB for delivery to Bulgaria and, by extension, Romania.

The project’s specially equipped floating tanker is expected to arrive at its Alexandroupoli location in late November, while the FSRU facility should start operating early in 2024.

Gastrade has already been granted a further license for an additional FSRU, intended to serve Moldova and Ukraine, if the results of a related market test indicate that such an additional project would be viable.

It remains unknown when Gastrade could make an investment decision on this additional FSRU.

 

Brussels backs TAIPED tender relaunch for South Kavala UGS

The European Commission has endorsed Greek privatization fund TAIPED’s intention to relaunch a failed tender for the development of “South Kavala”, an almost depleted natural gas field in the Aegean Sea’s north, as an underground natural gas storage facility (UGS) that would, under the new plan, also be equipped to store hydrogen.

Brussels’ decision on the South Kavala UGS has been included in a just-published European Commission post-program surveillance report covering the state of the Greek economy and its developments.

TAIPED declared that the South Kavala UGS had ended without a result in March. At the time, the privatization fund also noted it would assess international gas market conditions, taking into account circumstances created by Russia’s invasion of Ukraine, as well as the European Commission’s REPowerEU decisions, to decide on whether it would relaunch the South Kavala UGS tender in the short term.

As previously reported by energypress, TAIPED has submitted an application to Brussels to have the UGS included on the European Commission’s project-supporting PCI list, as a facility also equipped to store hydrogen.

Emergency measures expiring, Athens seeks extension

The energy ministry has forwarded an official request to the European Commission seeking an extension, until the end of the year, of emergency electricity market measures that were introduced last summer to combat energy price rises and are set to expire on July 1. Brussels has yet to respond to Athens’ request.

Over the past nine months, the extraordinary measures have proven effective in subduing electricity prices for households and businesses at levels well below those created by the energy crisis.

The energy ministry imposed a wholesale price cap on electricity, interrupted indexation clauses concerning retail tariffs, and has been subsidizing electricity. Also, in an effort to stimulate competition, the ministry set a rule requiring power suppliers to announce their nominal tariffs – not including subsidies – for each forthcoming month ten days in advance, and has given electricity users the freedom to switch suppliers without any penalty costs.

The Greek request forwarded to the European Commission wants this entire package of measures extended until the end of 2023, as protection against any new wave of energy price rises.

Though energy prices have deescalated over recent months, analysts have not ruled out a rebound and reemergence of energy sufficiency issues in Europe next winter.

Russia’s ongoing war in Ukraine and Europe’s inconclusive plan regarding alternative energy sources are the main factors nurturing these concerns.

‘National interests dominating global energy transition’

National interests continue to dominate the energy transition on a global level, the World Energy Council’s (WEC) latest World Energy Pulse, surveying more than 700 energy leaders and decision-makers from nearly 80 countries for updated snapshots of current attitudes, trends and needs, has shown.

Almost half, or 46 percent, of the survey’s participants cited national priorities and the risk of an out-of-control green technology race as the biggest obstacles to a smooth and fair transition to a zero-emission economy.

Offering his interpretation, Haris Doukas, Associate Professor at the National Technical University of Athens (NTUA), member of the WEC Program Committee and head of the WEC office in Greece, described the dominance of national interests expressed in the survey as aftershocks linked to COVID-19, the ongoing war in Ukraine, and an international race to boost domestic industry, intensified by US President Joe Biden’s recent Inflation Reduction Act.

Though 54 percent of the survey’s respondents agreed that energy independence is vital to their countries’ climate and energy security agenda, an overwhelming 84 percent of participants accepted that energy interdependence is the new global reality.

DEPA Commercial, Moldova’s Energocom nearing gas deal

Greek gas company DEPA Commercial is close to establishing a gas supply deal with Moldovan state gas and electricity supplier Energocom, sources have informed, noting the two sides are currently discussing gas quantities and prices for what could be a long-term agreement.

Both Energocom and Moldova, as a whole, are looking for alternative energy sources as the Balkan country, neighboring Ukraine, seeks to end its reliance on Russian fossil fuels.

Kostas Xifaras, chief executive at DEPA Commercial and Energom’s general director Victor Binzari have held talks as part of an official visit to Athens by the leadership of Moldova’s energy ministry.

Greek energy minister Kostas Skrekas, who met with his Moldovan counterpart, Victor Parlikov, during this visit, released an announcement about the prospective supply deal.

DEPA Commercial gas quantities would reach Moldova through an eastern corridor, or network of gas pipeline interconnections linking Greece with Bulgaria (IGB), Bulgaria with Romania, and Romania with Moldova.

DEPA Commercial is also looking to broaden its gas trading activities with other Balkan countries ahead of the arrival of the Alexandroupoli FSRU, a floating LNG terminal now being developed in Greece’s northeast.

DEPA Commercial is a member of the five-member Gastrade consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU.

Overdevelopment danger for LNG terminals in Europe, IEEFA warns

Major LNG terminals being developed in various parts of Europe, including Greece and Germany, in response to reduced Russian gas supply, could fail to achieve full commercial potential as the continent may end up possessing a far greater number of such facilities than required by 2030, the Institute for Energy Economics and Financial Analysis (IEEFA) has warned.

If REPower EU objectives are attained and Turkish gas demand remains steady, then European demand for LNG will be restricted to a level of just 150 billion cubic meters in 2030, down from 175 bcm in 2022, IEEFA pointed out. At such a level in 2030, LNG terminals in Europe would operate at less than 40 percent of capacity.

IEEFA also stressed that European gas operators have an incentive to over-expand their infrastructure and asset base in order to deliver profits to shareholders, even if projects do not end up being fully utilized.

Existing legislation provides operators with guaranteed revenues collected through tariffs, IEEFA pointed out. Evidence strongly suggests the Russian attack on Ukraine has accelerated Europe’s energy transition by dramatically boosting the penetration of green technologies that reduce demand for gas and LNG, the institute added.

 

US subdued on East Med plan despite anticipated revival

US Secretary of State Anthony Blinken has praised Greece’s leading role concerning the region’s energy transition in his opening remarks at the start of the 4th round of the Greece-US Strategic Dialogue, while underlining that the US is grateful for Greece’s unwavering support for Ukraine.

“Greece’s transition is a model for the region,” Blinken stressed, recalling that renewable energy sources such as wind and solar have, in recent times, provided half of Greece’s electricity needs, which he said was equivalent to taking 3 million cars off the roads.

The US Secretary of State also praised Greece’s role in supporting neighboring countries to diversify their energy sources by reducing their dependence on Russia, such as Bulgaria.

However, the US appears unmoved by Israel’s renewed interest for the development of the East Med gas pipeline, which would connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline. This project would greatly contribute to Europe’s efforts aiming to end the continent’s reliance on Russia for fossil fuels.

Contrary to expectations, the East Med project has not been included on the agenda of talks for Blinken’s official two-day visit to Athens, today and tomorrow, reliable sources informed.

Roughly a year ago, the US had announced it could not support this pipeline project, attributing this stance to a lack of feasibility. But the country’s willingness to maintain a balance in its regional geopolitical interests, especially between Greece and Turkey, is most likely the underlying reason.

Despite difficulties faced in its ties with Turkey, the US appears unwilling to support a regional gas pipeline project that would sideline this NATO ally.

Alexandroupoli infrastructure offering regional gas-hub potential

Gas infrastructure being planned and developed at Alexandroupoli, on the edge of northeastern Greece, offers potential to establish this provincial city as a regional gas hub in southeast Europe that will facilitate gas trade and shape regional gas prices.

Gas quantities of between 20 and 30 bcm are expected to be attracted to the region by FSRUs, gas pipelines and a vertical pipeline corridor, covering the wider region.

However, the effort to establish a gas hub in this specific region faces many challenges. Besides bringing in large gas quantities and offering competitive prices as well as high liquidity, all needed to lure players from other hubs and neighboring markets, the region also requires a major reinforcement of the transport system, along with a significant increase in the capacity of the recently launched Greek-Bulgarian IGB gas pipeline.

The absence of a gas hub in southeast Europe and the prospective accumulation of quantities up to 30 bcm in Alexandroupoli offers great potential for the provincial Greek city, as was pointed out by a leading energy ministry official during last weekend’s launch of a new power station in the area.

Attracting significant gas quantities to the location is a first step. It must be followed up by the establishment of a gas spot market in Greece, one capable of increasing interconnectivity in the southeast European market.

Greece promises to serve as an entry point for the aforementioned natural gas vertical corridor, to run through Bulgaria, Romania, Hungary, Ukraine and Moldova.

This project, to utilize existing infrastructure combined with new infrastructure, will incorporate the Trans Balkan Pipeline, which transported Russian gas to southeast Europe via Ukraine for thirty years and is now set to operate with gas flow in the opposite direction.

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.

Greece becoming a key gas exporter, rise in loads relayed

Greece is developing into a major exporter of natural gas with roughly one in three shipments that reach the country relayed to other countries, well over last year’s level of 9.8 percent.

Russia’s war on Ukraine has increased the geostrategic importance of Europe’s south, including Greece, in terms of gas transportation, supply routes from the continent’s south to north now dominant, a reversal of the flow in previous decades.

LNG shipments to Greece supply a large number of landlocked European countries, all the way north to Ukraine. As a result, Greece’s gas exports have skyrocketed in 2022.

In the first eleven months this year, the country’s gas exports reached 26 TWh, more than triple the level recorded for all of 2021, when the year’s gas exports totaled 7.6 TWh.

Greece’s gas exports are expected to rise even more in 2023 as a result of last October’s launch of the IGB pipeline running from Greece to Bulgaria.

Technical solutions are now being sought so that gas exports can also be made via the IGB pipeline as soon as the Alexandroupoli FSRU, a project led by Gastrade, is launched in late 2023. The Alexandroupoli LNG terminal’s arrival will further boost Greece’s capacity to export gas.

 

 

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.