Ukraine

ExxonMobil-Helleniq Energy seismic surveys off Crete

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US oil and gas corporation ExxonMobil has been conducting seismic surveys under complete secrecy and at a rapid pace over the past week or so at two offshore block licenses, west and southwest of Crete, held with Helleniq Energy, formerly named ELPE, as its junior partner.

The two blocks share similar geological traits with Egypt’s giant offshore Zohr gas field and, according to early estimates, may contain rich natural gas quantities.

American presence is being assured, through ExxonMobil, in the southeast Mediterranean region at a particularly critical geopolitical period, both because of the Russian invasion of Ukraine and Turkey’s provocative moves against Greece (aggressive rhetoric and the Libya pact), political analysts told energypress.

ExxonMobil acted swiftly to increase its stake in a consortium holding licenses for the two offshore Cretan blocks following a recent  decision by France’s TotalEnergies to withdraw. ExxonMobil acquired TotalEnergies’ share to now hold a 70 percent share in the consortium as the venture’s operator.

The ExxonMobil-led seismic surveys off Crete, which began on October 24, are being conducted by Norway’s PGS and the company’s Sanco Swift seismic vessel. It is conducting 3D surveys, meaning ExxonMobil is focusing on specific areas for possible natural gas deposits.

Ukraine war adds to complexity of Greek-Albanian EEZ dispute in Ionian

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An unresolved exclusive economic zone dispute between Greece and Albania over territorial rights in the Ionian Sea has become even more complicated as a result of Russia’s war in Ukraine, a conflict that has turned the Ionian and Adriatic sea areas into a hotbed of confrontation between NATO and Russia.

According to a recent report published by Italian daily La Reppublica, numerous incidents, both minor and more intense, have taken place in the Adriatic and Ionian seas between the escorting forces of the US 6th Fleet aircraft carrier Harry Truman and Russian warships. At least one of these incidents took place off Corfu, military sources have informed.

The naval incidents in the region are a result of its increased strategic importance for NATO with regards to the war in Ukraine as well as military preparations for any possible spread of the conflict beyond Ukraine.

Greece and Albania, following an agreement between the two countries, have begun procedures to take their Ionian Sea EEZ dispute to the International Court of Justice in The Hague. The consequences of the Ukraine war add to the issue’s complexity.

Energean and ELPE (Hellenic Petroleum), both holders of licenses in the Ionian Sea, are working to explore the region’s hydrocarbon prospects.

EastMed pipeline consortium set to apply for PCI status

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Boosted by the prospect of a significant gas deposit discovery off the Cyprus coastline, IGI Poseidon, the consortium behind the prospective EastMed gas pipeline, a 50-50 venture involving Edison and DEPA International Projects, is set to submit an application seeking Project of Common Interest (PCI) status, which assures EU funding support, for the gas pipeline project.

Russia’s invasion of Ukraine, skyrocketing oil and natural gas prices, as well as the EU’s efforts aiming for greater energy independence, with the backing of the US, are developments that have created new market conditions favoring the EastMed gas pipeline’s development.

On Monday, the ENI-Total consortium announced it has detected natural gas at Block 6 off the Cypriot coast, noting its preliminary estimates indicate the existence of a gas deposit measuring 2.5 trillion cubic feet, a significant quantity.

This gas deposit discovery is crucial for the sustainability prospects of the EastMed gas pipeline, intended to transport gas from deposits in the east Mediterranean to Europe.

According to a recent update from the IGI Poseidon consortium, the EastMed project’s licensing procedure and technical plans are nearing completion and should be finalized by the end of 2022. The EastMed gas pipeline could begin operating within 2027, the consortium added.

PCI-related funding support from the EU for the EastMed gas pipeline’s development would be crucial as this is a high-cost project, budgeted, most recently, at 5.2 billion euros.

European gas storage units nearly 70% full, on course for October target

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Europe’s gas storage facilities are estimated to be close to 70 percent full in early August, according to data provided by Gas Infrastructure Europe (GIE), representing the continent’s gas infrastructure operators.

Europe’s gas storage units continued being filled at a rapid rate in late July, despite the reduction of Gazprom’s gas supply through the Nord Stream I pipeline, now operating at just 20 percent of capacity.

Given the continent’s current gas storage levels, European authorities are confident an 80 percent objective can be achieved by early October. However, storage level discrepancies between EU member states remains a challenge that needs to be dealt with.

German gas storage units are now 70 percent full, while the level in Italy is higher, at 73 percent. On the contrary, gas storage facility levels are far lower elsewhere, registering 48 percent in Bulgaria, 24 percent in Ukraine and 53 percent in Croatia.

Fixed charge cap of 5 euros, over €500m raised in July for subsidies

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The government has decided to implement a five-euro cap on fixed charges in electricity bills, energy minister Kostas Skrekas has told parliament.

It is the latest in a series of energy-crisis measures introduced by the government and comes after electricity suppliers opted to increase their fixed charges as a means of keeping their tariffs – the competitive aspect of electricity bills – as low as possible.

A new market mechanism’s revenues generated for the Energy Transition Fund, supporting the government’s electricity subsidies initiative, reached over 330 million euros in the first half of the month and could exceed 500 million euros by the end of the month, the minister told parliament. This sum nearly covers the monthly cost for subsidies.

The energy crisis, brought about by pandemic-induced market abnormalities, has been exacerbated by Russia’s war on Ukraine, which the minister described as “catastrophic, causing thousands of deaths, many of the victims being unarmed civilians, and beyond that, an enormous energy crisis that is feeding economic and inflationary crises, which we hope does not also lead to a food crisis.”

Lignite-fired output to double, PPC sets conditions for return

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State-controlled power utility PPC will double its lignite-fired electricity generation over the next 12 months for annual production of 10 TWh, from 5 TWh at present, an increase covering 20 percent of Greece’s annual electricity needs, energy authorities have agreed at an emergency meeting chaired by Prime Minister Kyriakos Mitsotakis.

The overall effort, reversing the country’s decarbonization plan in order to make up for dwindling Russian natural gas exports and help counter skyrocketing gas costs, will include the development of new lignite mines.

The government’s recently introduced price caps for power generation, set at different levels for respective production technologies, will be applied to this emergency lignite plan.

A price cap of 208 euros per MWh has been imposed on lignite-fired electricity production, meaning the additional 5-TWh amount to be generated by PPC will be worth roughly one billion euros. This additional 5-TWh in production would have been worth 1.8 billion euros if current energy exchange price levels were applied. The wholesale cost of lignite-generated electricity at present is 341.17 euros per MWh.

PPC, controlling all the country’s lignite facilities, has set a series of conditions for the return of lignite-fired power stations, including the abolishment of a rule requiring the company to commit 50 percent of the previous year’s lignite-based output to the futures market.

The power utility has also demanded a 150 million-euro guarantee from the government  should Russia’s war on Ukraine end and energy prices deescalate, which would end the need for the emergency lignite-fired production boost. In setting this condition, PPC has taken into account investments it will need to make to double its lignite-fired generation over the next year.

The government appears to be willing to satisfy the conditions set by PPC, which has disinvested in lignite over the past couple of years.

 

Brussels report highlights EU’s alarming energy cost increase

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The cost of wholesale electricity in the EU rose by over 400 percent in the first quarter of 2022, compared to the equivalent period a year earlier, while gas imports during this period cost the EU a total of 78 billion euros, of which 27 billion euros concerned Russian natural gas quantities, a report published by the European Commission’s Directorate-General for Energy has shown.

Households and businesses across the continent have faced unprecedented natural gas cost increases following Russia’s invasion of Ukraine in February. Consequently, the TTF index skyrocketed to peak at 212 euros per MWh on March 7.

The EU adopted a series of sanctions primarily concerning the energy sector as a result of the Russian attack, the report noted. Also, in May, the EU approved its REPower EU plan, designed to gradually end Europe’s reliance on Russian fossil fuels, bolster the continent’s energy security, and support the green-energy transition.

Imports of Russian gas fell by 71 percent via Belarus and 41 percent via Ukraine in the first quarter of 2022, compared to the equivalent period a year earlier. Gas inflow from the Nord Stream pipeline linking Russia with Germany fell by 60 percent in early June.

Europe’s wholesale electricity price averaged 201 euros per MWh in the first quarter of 2022, 281 percent higher than the equivalent period in 2021, the report noted.

Spain and Portugal registered the highest wholesale electricity price increases during this period, a 411 percent rise, followed by Greece (343%) and France (336%), the report noted.

IGB moves close to launch, ICGB consortium certified

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The Greek-Bulgarian IGB gas pipeline has moved a step closer towards its launch, expected around the end of this month, following the completion of a certification procedure for the ICGB consortium behind the project.

The European Commission, according to information made available, has approved a certification application submitted by the Greek Regulatory Authority for Energy, RAE, and its Bulgarian counterpart, EWRC.

Greek Prime Minister Kyriakos Mitsotakis and Bulgarian leader Kiril Petkov will both attend the project’s inauguration ceremony in Komotini, northeastern Greece, this Friday, ahead of the project’s commercial launch towards the end of the month.

The two leaders are expected to highlight this project’s contribution to the EU’s ongoing effort to end the continent’s reliance on Russia’s Gazprom.

The IGB gas pipeline will offer an alternative natural gas route into Bulgaria, initially via the TAP route and, from autumn onwards, through Greece’s gas grid. From 2023, the IGB will serve as a gateway for LNG imports from coastal FSRUs in the region. LNG quantities will reach Bulgaria, Romania, even Ukraine, through pipeline interconnections.

Strategic reserve mechanism application to be withdrawn

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The energy ministry intends to withdraw its application submitted to the European Commission for a strategic reserve mechanism as a result of the government’s recent decision to revise its withdrawal plan for the country’s lignite-fired power stations in order to permit operations until 2028 instead of 2025, as was planned.

Under the original plan, the strategic reserve mechanism would have been introduced to maintain lignite-fired power stations under the control of power grid operator IPTO for energy contributions during periods of high demand.

Within the framework of these developments, the government is also considering to withdraw a compensation application for power utility PPC’s premature withdrawal of lignite-fired power stations.

PPC’s plan entailed shutting down all existing lignite-fired power stations by the end of 2023.

However, the government is being forced to delay its decarbonization strategy as a result of the steep rise in gas prices prompted by Russia’s war on Ukraine.

PPC awaits Brussels energy strategy to decide on Ptolemaida V

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Power utility PPC will wait for the European Commission’s finalized decisions on a strategic plan intended to end the EU’s reliance on Russian fossil fuels before it decides on the operating and conversion details of its prospective Ptolemaida V power station in northern Greece, to be launched as a lignite-fired facility before being converted to natural gas.

The PPC board is now expected to decide on Ptolemaida V’s conversion date towards the end of this year, according to sources.

Ptolemaida V, expected to undergo a trial run in the second half of the year before being launched late in the year or early in 2023, will be introduced as Greece’s last lignite-fired power station.

Early in April, prime minister Kyriakos Mitsotakis announced extensions to withdrawal dates for older lignite-fired power stations that were originally headed for closure prior to 2025. At the time, the prime minister also informed that Ptolemaida V could now operate as a lignite-fired unit until 2028.

Revisions to the country’s decarbonization plan have been prompted by energy security concerns following Russia’s invasion of Ukraine and the exacerbation of the preceding energy crisis as a result of this war.

The Greek government has decided to increase lignite mining output as a safety measure should Russia interrupt its natural gas supply.

A year ago, PPC had announced it intended to convert Ptolemaida V into a natural gas-fired facility as of 2025, but the latest energy security concerns froze this plan.

 

NECP officials at odds over future gas role in Greece

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Local authorities are at odds over the role of natural gas in the country’s National Energy and Climate Plan, to be revised, as well as on the decarbonization road map for the coming decades.

A second session just held by an energy ministry working group assembled for the NECP revisions has revealed contrasting views on the future plans for natural gas in Greece, energypress sources have informed.

One side of the working group’s members wants an end to the expansion of natural gas in Greece and containment of investments for new natural gas infrastructure, especially networks.

At the other end, a second group of officials supports that Europe’s intention to end the continent’s reliance on Russian natural gas highlights the need for diversification of energy sources in Greece, as the country’s system is designed based on the assumption of Russia being a key supplier of natural gas.

This group also noted that Greece, based on the new European energy plan, stands to become a main gateway for natural gas to the wider region and, as a result, is favorably positioned for related gas infrastructure investments worth 10 billion euros, through the REPowerEU plan, prompted by Russia’s invasion of Ukraine.

 

LNG order costs fall as much as 40% below TTF prices

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The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.

 

Alexandroupoli FSRU development launch today, pivotal project

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Development of the Alexandroupoli FSRU in Greece’s northeast, a project promising to boost energy security by broadening energy source diversification for Greece and the wider Balkan region, is scheduled to officially commence today.

The prime ministers of Greece and Bulgaria, as well as Serbia’s president, will attend today’s official ceremony. The leaders will highlight the need for energy source diversification in the Balkans and reduced reliance on Russian natural gas.

The Alexandroupoli FSRU promises to establish Greece as a gas hub for transportation of LNG into the EU.

Natural gas consumption in southeast Europe totals between 10 and 11 bcm annually, half this amount provided by Russia.

The Alexandroupoli FSRU, expected to be ready to operate by the end of 2023, is planned to offer a capacity of approximately 5.5 bcm, greatly diversifying gas supply to southeast Europe.

The project is budgeted at 380 million euros, of which 166.7 million euros will be provided through the National Strategic Reference Framework (NSRF).

The Alexandroupoli FSRU will be linked with Greece’s gas grid via a 28-km pipeline, enabling gas supply to Greece, Bulgaria and the wider region, including Romania, Serbia, North Macedonia, Moldavia and Ukraine.

 

Talks in progress for Italy’s East Med gas pipeline entry

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Talks are in progress for Italy’s official entry into the East Med gas pipeline project, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, energypress sources have informed.

Greece, Cyprus and Israel signed an agreement for the project’s development in 2020, without Italy’s participation, as the country’s government at the time, citing environmental issues, had reacted against the project reaching its shores.

Italy’s current Prime Minister, Mario Draghi, recently stressed that the East Med gas pipeline needs to be pursued as a result of Russia’s invasion of Ukraine.

The project has now gained political support in Italy, through a resolution issued in parliament urging the government to co-sign the transboundary agreement, energypress sources informed.

Italy has revised its stance on the East Med project as a result of a recent EU-27 decision to drastically reduce Europe’s reliance on Russian natural gas.

Italy could officially announce, in May, its intention to co-sign the East Med agreement, sources informed.

Ongoing war, new EU sanctions on Russia, spark price fears

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The ongoing war in Ukraine, as well as a fifth round of EU sanctions against invading Russia, have prompted further energy-shortage fears that could drive natural gas and electricity prices even higher.

A growing number of consumers struggling to cover energy bills are resorting to installment-based payment arrangements, up 60 to 70 percent since the beginning of the year.

One major energy supplier received some 6,000 applications for installment-based payments in March, up from 4,500 in February.

Though the EU has found consensus on imposing sanctions against Russia, it has struggled to reach agreement on support measures for consumers and enterprises. A gap between the EU’s north and south continues to exist, each member state more or less left to seek solutions alone.

None of the south’s proposals, intended to ease the effects of the energy crisis, including a price ceiling on natural gas, and a detachment of gas prices from electricity prices, have yet to be adopted. Instead, decisions have been postponed until May. Decisions could ultimately be shaped by the degree of pressure felt by the north.

The EU’s fifth round of sanctions on Russia, announced yesterday, include a ban on coal imports from Russia, worth four billion euros annually; a total ban of banking transactions with four main Russian banks; as well as export bans for products required by Russia, such as semiconductors. The USA has also increased its pressure on Russia.

Wholesale electricity prices in Greece may be 30 percent lower than a peak of 427 euros per MWh registered in early March, but levels of between 280 and 330 euros per MWh registered in recent days are equivalent to those of November and December.

Even if the war were to end now, the good scenario for energy prices would still be bad. Natural gas prices would remain at levels of between 50 and 60 euros per MWh throughout 2022, compared to yesterday’s level of 106 euros per MWh, for a wholesale electricity price of 160 euros per MWh, up 160 percent compared to last year and 130 percent over 2019 levels.

As for the worst-case scenario, maintenance of natural gas price levels at the present level of 100 euros per MWh would result in wholesale electricity prices of 255 euros per MWh, meaning between 130 and 150 euros in monthly electricity bills for average households, not including subsidies.

 

Greece, Cyprus, Israel prepare to discuss East Med, power grid link

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The East Med gas pipeline and a subsea electricity grid interconnection to link Israel with Greece and Cyprus, projects whose prospects have grown as a result of the EU’s new energy policy, aiming to end the continent’s reliance on Russian gas as soon as possible, are expected to dominate the agenda at an upcoming trilateral meeting between the energy ministers of Greece, Cyprus and Israel.

The session is planned to take place in a fortnight’s time or immediately following the Greek Easter period, culminating on April 24.

Italian Prime Minister Mario Draghi recently stressed that development of the East Med gas pipeline, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, needs to be pursued as a result of Russia’s invasion of Ukraine.

A consortium formed by Greek gas company DEPA and Italy’s Edison is continuing its studies on the East Med project plan.

As for the subsea electricity grid interconnection, Cyprus and Israel have pushed for its development to end their energy isolation. The European Commission has already approved funding worth 657 million euros for the prospective project’s section to run from Greece to Cyprus.

Greek prime minister Kyriakos Mitsotakis and energy minister Kostas Skrekas will be involved in two key meetings in Athens today, to focus on energy matters as a result of Russia’s war on Ukraine, with Israel’s alternate prime minister and foreign affairs minister Yair Lapid, as well as US under secretary of state for political affairs Victoria Nuland.

 

Emergency steps taken for FSU at Revythoussa LNG terminal

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The energy ministry appears to be pushing ahead with an emergency plan for swift installation of a floating storage unit (FSU) at the country’s only existing LNG terminal, on the islet Revythoussa, just off Athens, for increased LNG storage capacity ahead of next winter, sources have informed energypress.

Gas grid operator DESFA, the Revythoussa facility’s operator, has already researched the market for an appropriate vessel, which will need to be equipped with modern technology and recently built.

The FSU to be moored at Revythoussa will need to offer an LNG storage capacity of between 130,000 and 140,000 cubic meters to satisfy the Greek market’s needs, the sources noted.

Under normal conditions, procedures concerning this specific project would take over 12 months to complete and enable installation, but authorities are now moving fast as a result of the extreme impact Russia’s war on Ukraine has had on the energy market.

DESFA will present a cost-benefit analysis to the energy ministry by this Wednesday, according to sources.

 

 

 

War, energy crisis hastening plans for new LNG facilities

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Russia’s war on Ukraine and the energy crisis are precipitating new natural gas and LNG supply solutions, a development that has increased the importance of related projects planned in Greece.

The EU’s decision to drastically reduce the continent’s reliance on Russian gas by two-thirds this year and terminate the dependence prior to 2030 has increased the importance of supply routes not linked to Moscow’s interests.

This development has increased the feasibility of new infrastructure promising to facilitate natural gas and LNG supply to Europe from alternative sources.

A major US-EU agreement established late last week for supply of an additional 15 bcm, at least, of American LNG to the continent this year, and gradual supply increases further ahead in time, has greatly boosted the prospects for related infrastructure.

The EU intends to follow up on this agreement by also establishing further supply deals with other producers, including Qatar and Egypt, in an effort to increase its LNG imports by a total of 50 bcm.

The EU’s new direction, focused on LNG imports, is seen as essential as the deterioration in relations between Europe and Moscow is expected to last many years.

Related projects in Greece promise to serve as LNG gateways for the country as well as southeast and central Europe, while also establishing Greece as a gas hub with an increased geostrategic role.

The Gastrade consortium recently decided to begin planning a second FSRU for Alexandroupoli, northeastern Greece, as an addition to a prospective first unit.

Petroleum group Motor Oil aims to begin development of its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by the end of the year.

Gas grid operator DESFA is preparing to further upgrade its LNG terminal on the islet Revythoussa, just off Athens.

Also, the Mediterranean Gas company is planning to develop an FSRU at Volos port, on the mainland’s east coast. RAE, the Regulatory Authority for Energy, has already issued a license for this project.

In addition, another investor, still undisclosed, is set to begin licensing procedures for yet another FSRU in Greece, sources have informed.

 

 

 

Nation’s power cost massive, even in best-case scenario

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Worth 1.1 billion euros, the government’s triple-dimensioned support package designed to help consumers deal with exorbitant energy prices is not negligible. The big question at this stage is how many more times will such support need to be offered to consumers in 2022?

Energy price projections are frightening as Russia’s war on Ukraine enters its fourth week. The political world will need to intervene and set market rules, as noted by Greek Prime Minister Kyriakos Mitsotakis. Smaller EU member states with less fiscal leeway, such as Greece, face serious danger should the European Commission not intervene and offer a central European solution.

If the situation unfolds favorably and the war ends soon, wholesale electricity prices could average 100 euros per MWh in 2022, well below today’s level of 240.32 euros per MWh, but nearly double Greece’s pre-crisis wholesale electricity average of 55 euros per MWh.

At a wholesale electricity price average of 100 euros per MWh in 2022, the country’s annual electricity consumption, totaling 55 TWh, would cost 5.5 billion euros.

This figure is 2.2 billion euros more than the 3 billion euros, or so, for Greece’s pre-crisis annual electricity cost, resulting from a wholesale electricity average of 55 euros per MWh.

To put this additional 2.2 billion-euro amount for electricity into perspective, it is just below the 2.58 billion euros collected by the state in 2021 through ENFIA property tax.

Government now fully encouraging upstream activity

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The Greek government is now fully encouraging foreign and domestic upstream companies to continue their hydrocarbon exploration activities at licenses held in the country for discovery and production of natural gas deposits.

In comments offered yesterday, Prime Minister Kyriakos Mitsotakis, while referring to the government’s latest energy-crisis support package for households and businesses, spoke of the country’s need to utilize its natural gas deposits as part of a national effort to achieve energy sufficiency.

Europe’s need to drastically reduce its reliance on Russian natural gas, as highlighted by the repercussions of Russia’s invasion of Ukraine, has prompted the Greek government to reassess its energy policy and, once again, turn to the country’s hydrocarbon potential.

The European Commission has prioritized swifter development of renewable energy sources in the EU, but cover will be needed from other energy sources during the transition, expected to last many years.

Brussels is now backing the further maintenance of European nuclear and coal-fired power stations, as well as extraction of oil and natural gas for a longer period.

Aris Stefatos, chief executive at EDEY, the Greek Hydrocarbon Management Company, has, on a number of occasions, estimated that Greece’s natural gas deposits could be worth 250 billion euros.

Electricity suppliers dread new round of unpaid receivables

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A rising wave of overdue electricity bills, highlighted by a sharp rise in the number of applications lodged by consumers for installment-based payments, is generating anxiety in the energy market as consumers face steep energy cost increases and suppliers battle against tightened cashflows while fearing a reemergence of unpaid receivables.

Consumers are now feeling the accumulative effect of an energy crisis that has lasted seven months and deteriorated since Russia’s recent invasion of Ukraine.

Consumer applications for installment-based payments have risen by more than 200 percent since September, 2021, generating fears of a new round of unpaid receivables, which would have a wider impact on the energy market’s stability.

The extent of the problem will become clearer in April when electricity bills are issued for consumption in March, a month during which wholesale electricity prices have skyrocketed to levels of approximately 300 euros per MWh as Russia’s war on Ukraine rages.

Many energy consumers who have so far managed to remain punctual with their payments could struggle to meet risen energy costs, energy company officials have informed energypress.

Prior to the energy crisis, the country’s annual electricity consumption of 55 TWh cost a total of nearly 3 billion euros, based on an average wholesale electricity price of 50 euros per MWh, several times below the current level of roughly 300 euros per MWh. If sustained throughout 2022, this price level would result in a national electricity bill of nearly 14 billion euros for the year.

Continued energy subsidies a tough equation, fewer funds, higher prices

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Government officials face a growing challenge in their effort to continue subsidizing electricity and natural gas for household and business consumers as funds backing this support are decreasing at a time when energy prices have continued rising.

According to sources, the government is looking to extend its subsidy package for households and businesses to also cover April.

Wholesale electricity prices have continued their ascent during the first ten days of March, well above levels in February, while reduced CO2 emission right prices are restricting cash injections into the Energy Transition Fund, funding the subsidies.

The wholesale electricity price average for the first ten days of March is 322 euros per MWh, well over February’s average of 211.71 euros per MWh. During this period, CO2 emission right prices have dropped to 60 euros per ton from 80 euros per ton.

Prime Minister Kyriakos Mitsotakis has called for a price ceiling to be imposed on the Dutch TTF gas exchange.

Energy markets are forecast to remain volatile as a result of Russia’s invasion of Ukraine.

Hydrocarbon prospects reassessed following invasion

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The prospects of Greece’s hydrocarbon sector, given the latest conditions shaped by Russia’s war on Ukraine, which has highlighted the need for natural gas source diversification, will be reassessed at a meeting scheduled to take place at the Prime Minister’s office tomorrow, with participation from the leadership of the energy ministry and EDEY, the Greek Hydrocarbon Management Company.

The meeting’s participants are expected to examine if and how the country’s hydrocarbon prospects and can be more effectively incorporated into Greece’s energy policies.

On a wider scale, Russia’s attack on Ukraine has prompted the EU to look for ways to revise its energy policy in order to reduce its reliance on Russian gas as soon as possible. A number of EU member states are now beginning to refocus on domestic hydrocarbon potential.

Renewable energy remains the top priority in Greece’s energy policy as the country aims to transition to a climate-neutral economy.

However, natural gas is planned to serve as a bridge to facilitate the transition towards greater RES market penetration.

ELPE (Hellenic Petroleum) conducted seismic surveys in January at the Gulf of Kyparissia, west of the Peloponnese, at its Block 10 license, commissioning Norwegian company Sharewater and survey vessel SW Cook.

The same vessel then conducted conduct surveys at ELPE’s ‘Ionio’ license, an Ionian Sea block measuring 6,671.13 square kilometers, southwest of Corfu, opposite the Paxi islands.

EDEY, in an announcement, noted that Greece’s potential gas deposits could generate turnover in excess of 250 billion euros, which would support the energy transition.

Copelouzos’ Greek-Egyptian grid link backed by leaders

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The Elica Interconnection, a Greek-Egyptian grid interconnection planned by the Copelouzos Group, has received the backing of Greek Prime Minister Kyriakos Mitsotakis and his Egyptian counterpart Abdel Fattah el-Sisi, entrepreneur Dimitris Copelouzos, founder of the group, has informed journalists.

A preceding teleconference between the leaders of the two countries, with participation from the president of the European Investment Bank Werner Hoyer, is expected to result in EU funding for the project.

According to Copelouzos, the project is budgeted at more than 3.5 billion euros, of which 1.5 billion euros will be provided by a group of Greek banks. The project is also a candidate for the PCI list, enabling EU funding support.

The Copelouzos group had set its sights on this project from as far back as 2008. Its double subsea cable, to stretch 954 kilometers from El Sallum to coastal Nea Makri, northeast of Athens, promises to transmit low-cost green energy with a 3-GW capacity, of which one third will be provided to local industries and the other two thirds exported to fellow EU members.

More specifically, on the exports, 1 GW will be transported through the Greek-Italian and Greek-Bulgarian networks, while the other 1 GW will be used for hydrogen production, most of which will be exported to other parts of Europe.

Licensing and financing procedures for the project are being hastened as a result of Russia’s war on Ukraine as the Elica Interconnection promises to offer Greece and the rest of the EU yet another alternative energy source as part of the continent’s effort to restrict its dependence on Russia.

The Elica Interconnection is planned to be completed by late 2025 or early 2026.

Brussels considers incentive for reduced energy consumption

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The European Commission is considering for inclusion, into its package of energy-crisis measures for EU member states, a voluntary mechanism that would offer incentives for reduced energy consumption by households and businesses, based on the principles of the demand response mechanism offering such incentives to industrial consumers.

Brussels’ energy crisis tool box was expected to be announced yesterday but has been postponed by a week so that it can be adjusted to new conditions created by last week’s Russian invasion of Ukraine.

As a result, the package is now expected to offer member states additional options aimed at ending Europe’s dependency on Russian gas.

French Minister of the Ecological Transition Barbara Pompili made reference to Brussels’ consideration of the mechanism that would offer households and businesses incentives to reduce energy consumption during a joint press conference with European Commissioner for Energy Kadri Simson, staged following an emergency meeting of EU energy ministers earlier this week.

“Obviously this is a debate that needs to take place in every member state,” Pompili noted, indicating that it will be up to every EU member state to decide on whether to adopt the measure that would offer consumers an incentive to reduce energy consumption.

Gastrade decides on additional Alexandroupoli FSRU by 2025

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Gastrade, the consortium established by the Copelouzos group for the development and operation of the Alexandroupoli FSRU, a floating LNG terminal planned for Greece’s northeast, has reached a decision to also install an additional FSRU unit at the location, expected to be completed in 2025, as a follow-up to the first terminal, set for completion in 2023.

The consortium’s decision for an additional FSRU in Alexandroupoli had been in the making from as far back as last summer, when the energy crisis was at its early stages, but was accelerated by the long-term turmoil now seen in relations between the west and Russia following the latter’s invasion of Ukraine last week.

Russia’s invasion of Ukraine has further highlighted the need for Europe to reduce its dependence on Russian gas as soon as possible. A completely new reality now appears to be in the making.

Southeastern Europe’s gas needs to result from Europe’s reduced energy dependence on Russia, through strategic diversification, has increased the prospect of Greece’s northeast becoming an energy hub that would facilitate gas exports in all directions, including to Ukraine.

The Gastrade consortium is comprised of five partners, founding member Elmina Copelouzos of the Copelouzos group, Gaslog Cyprus Investments Ltd, DEPA Commercial, Bulgartransgaz, and DESFA, Greece’s gas grid operator, each holding 20 percent stakes.

All five partners have agreed to offer 2 percent each so that North Macedonia can enter the consortium with a 10 percent stake.

March power, gas subsidies unchanged, suppliers owed

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The level of state subsidies to be offered to household and business consumers for electricity and natural gas in March will remain unchanged compared to February, a support measure worth 350 million euros for the month, sources have informed.

Energy suppliers have already been informed of the decision, reached by the energy ministry.

As a result, household consumers will receive electricity subsidies worth 39 euros per month for consumption up to 300 kWh, only for primary places of residence.

Low-income households eligible for social residential tariffs (KOT) stand to receive electricity subsidies worth 51 euros per month.

Monthly subsidies for non-household consumers, including businesses, farmers and professionals, will remain at the level of 65 euros.

As for natural gas, household consumers stand to receive state subsidies of 20 euros per MWh plus that much more from the gas company DEPA Commercial. Businesses will receive 20 euros per MWh.

According to sources, energy suppliers have yet to be compensated by DAPEEP, the RES market operator, for subsidies offered in January and February, on behalf of the Greek State. Subsidies offered by the Greek State over the two-month period were worth a total of 700 million euros.

DAPEEP sources have ascertained that the sum owed by the operator to energy suppliers will be covered either late this week or early next week.

This delay has increased the cashflow strain felt be energy suppliers, now facing even greater pressure following last week’s invasion of Ukraine by Russia, a development that has sparked a further rise in energy prices.

Escalating war increases threat of gas shortages, prices surging

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The escalating war in Ukraine following last week’s invasion by Russian forces has increased fears of natural gas shortages in the European market, which has led to a new price surge, adding to the price ascent prompted by the preceding energy crisis.

Markets are now jittery over concerns that the ongoing bombardments in Ukraine could damage gas pipelines running across the country. The prospect of a Russian retaliation to stricter sanctions threatened by the west is another concern pressuring markets.

Greece is in a somewhat sheltered position as the country imports Russian gas quantities via the Turkstream pipeline, crossing the Black Sea, but, given the overall developments, Athens cannot remain complacent.

The country’s crisis management committee will be meeting again today to discuss measures should the adverse conditions created by Russia’s war in Ukraine deteriorate further.

Greek authorities are expected to try and maintain reserves at the country’s LNG terminal on the islet Revythoussa, just off Athens, as close as possible to full capacity, and use pipeline gas to the fullest extent.

The country’s gas needs for March have been fully covered by four LNG shipment orders – two by Elpedison, and one each by Mytilineos and DEPA – expected at the Revythoussa terminal. Additional orders could be placed if needed. LNG orders have yet to be placed for April.

Natural gas prices surged yesterday, ending the day at 121 euros per MWh. At such a level, retail electricity prices could reach close to 300 euros per MWh. Today’s retail electricity price is 254.94 euros per MWh.

Europe now appears determined to reduce its dependency on Russian gas, covering between 40 and 45 percent of the continent’s needs. The issue has become a top priority on the EU agenda, but the road towards achieving this objective remains unclear.

Gazprombank Swift system removal may disrupt gas flow

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The removal of a number of Russian banks from Swift, an international payment system used by thousands of financial institutions, expected soon as one of the sanctions to be imposed by the EU, US, UK and allies on Russia to pressure the Russian economy following its invasion of Ukraine, could disable Russia’s ability to collect payments for natural gas and oil exports, but this development could ultimately backfire by prompting Russia to turn off its taps.

Such a prospect will largely depend on whether or not Gazprombank, Russia’s third-biggest bank, is included on the list of banks to be cut off from the Swift international payment system. This specific bank receives all payments for Russian natural gas exports to Europe.

It is feared that Russia could, as a response, disrupt natural gas supply to Europe, greatly dependent on Russian gas, especially if Moscow’s military attacks in Ukraine fail to produce the desired results, despite the cost entailed by such a move for the Russian economy and the country’s funding of the war on Ukraine.

According to British media, Russia’s ongoing attack on Ukraine is costing Moscow 15 billion pounds per day, an amount making the country’s energy export revenues crucial.