USA

Greek-US energy agenda focused on 3 projects

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Three energy infrastructure projects, the Alexandroupoli FSRU in Greece’s northeast, an oil pipeline running from the Alexandroupoli port to Burgas, on Bulgaria’s Black Sea coast, and a Greek-Egyptian grid interconnection, were focal points in talks yesterday between Greek and American officials, as part of US Secretary of State Anthony Blinken’s official visit to Athens.

The two sides, meeting for the 4th round of a Greece-US Strategic Dialogue, appeared determined to push ahead with the three projects, propelled by Russia’s war on Ukraine, which has prompted Europe to move in a direction ending its reliance on Russian fossil fuels.

It was agreed that Athens and investors need to accelerate efforts for the aforementioned projects to further marginalize Russian energy supply to Europe.

Besides offering full support for the three energy infrastructure projects, US officials also expressed satisfaction about the recent launch of the Greek-Bulgarian IGB gas pipeline as well as ongoing plans for a pipeline to run from Greece to North Macedonia.

However, the US officials kept a distance from the discovery of gas deposits by Israel, Cyprus and Egypt in the east Mediterranean, as well as the East Med gas pipeline plan – which would connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline – presumably to avoid upsetting Turkey, despite problems that have weighed down US-Turkish ties of late.

 

US subdued on East Med plan despite anticipated revival

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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.

Greek-Bulgarian oil pipeline MoU signed, US offers support

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Following months of diplomatic and entrepreneurial activity, Greek energy minister Kostas Skrekas and his Bulgarian counterpart, Rossen Hristov, have just signed a Memorandum of Understanding in Athens for the development of an oil pipeline to run from Alexandroupoli in Greece’s northeast to Burgas, on Bulgaria’s Black Sea coast.

The two ministers signed the MoU within the framework of a meeting between Greek Prime Minister Kyriakos Mitsotakis and Bulgarian President Rumen Radev.

Greece’s Alexandroupoli port – developing into one of the eastern Mediterranean’s most pivotal energy hubs as a result of the reversal of energy source flow, nowadays moving from south to north as a result of Europe’s decision to end its reliance on Russian fossil fuels – will facilitate oil primarily imported from the Middle East and headed to east European markets.

The oil pipeline will cover a distance of 260 kilometers, equally divided between Greece and Bulgaria, and offer an annual capacity of 10 million tons, down from an original plan of between 35 and 50 million tons.

A section of the Greek-Bulgarian oil pipeline is planned to run parallel to the IGB gas pipeline linking the neighboring countries.

Work on the oil pipeline is expected to begin within the next two years, while its completion is slated for three to four years from now, a swift procedure for such projects, as environmental permits have already been issued.

The Greek-Bulgarian oil pipeline has not been embraced by Turkey as it will reduce the geopolitical importance of the Bosphorus Strait. Contrary to the past, the US is now expressing full support for the Greek-Bulgarian oil pipeline.

 

Israel injecting new life into East Med gas pipeline project

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The newly elected Israeli government appears set to inject new life into the prospective East Med gas pipeline, its interest emerging one year after the US had announced it would no longer support the project, a stance now likely to be revised.

Israeli foreign minister Eli Cohen expressed the country’s interest in the project to his Greek counterpart Nikos Dendias during the latter’s official visit to Israel earlier this week.

The prospective pipeline is planned to cover a total distance of 2,000 kilometers, of which over 1,400 kilometers will run underwater, to connect Israel, Cyprus and Greece before crossing to Italy visa the Poseidon pipeline, a 210-kilometer stretch.

“We agreed to the exportation of Israeli gas through Greece and Cyprus, which will reach all of Europe. At a time of global energy crisis, it will strengthen our international position and bring a lot of money to the country,” Cohen, Israel’s foreign minister, announced following his meeting with his Greek counterpart.

Reiterating this interest, Israeli prime minister Benjamin Netanyahu, who has returned to the country’s top post after his Likud party formed a coalition with ultranationalist and ultra-Orthodox Jewish allies, announced that he instructed the head of Israel’s National Security Council to initiate a trilateral meeting of the leaders of Greece, Israel and Cyprus for energy-related talks.

Tel Aviv is seeking to reimpose itself as a force in eastern Mediterranean energy matters.

The East Med gas pipeline plan is likely to be on the agenda when US secretary of state Antony Blinken visits Athens on February 21 and 22.

East Med has gained renewed significance as Europe is looking for alternative sources of natural gas and major oil companies, especially US firms such as ExxonMobil, focusing on a venture south of Crete, are involved in hydrocarbon exploration efforts in the eastern Mediterranean.

Given the strained Israeli-Turkish ties, Israeli officials know well that the development of a gas pipeline across Turkey is not a viable option.

IGB gas pipeline nearing launch, doubts dismissed

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The prospective IGB gas pipeline linking Greece and Bulgaria is believed to be almost ready for its commercial launch, scheduled for October 1, despite recent doubts that were cast over the entire project.

Certain analysts recently questioned whether American LNG supply to Bulgaria, through the IGB pipeline, would go ahead, claiming the new Bulgarian government wants to renegotiate a supply agreement with Russia’s Gazprom.

ICGB AD, the consortium behind the IGB project has announced, in what is seen as a response to the scare, that an auction offering pipeline capacity to users will be held this Thursday through the online platform BALKAN GAS HUB EAD, from 9am to 12pm (Sofia time).

Greek construction company AVAX, developing the project, has set itself an end-of-August objective, which could be stretched to September 8, the latest, to complete pending work and obtain required permits from the Bulgarian authorities.

If all this goes according to plan, the IGB gas pipeline will be ready to operate on October 1.

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.

PM discusses Greek regional gas supply prospects in talks with US president

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The crucial role to be played by northeastern Greece’s prospective Alexandroupoli FSRU as a project that promises to help reduce and eliminate the reliance of the Balkans and, by extension, east Europe on Russian gas was stressed during talks between Greek Prime Minister Kyriakos Mitsotakis and US president Joe Biden in Washington yesterday.

The Greek leader, who stressed that the Alexandroupoli FSRU will be installed at a port just 500 km from the Ukraine border, added the facility, discussed extensively between the two leaders, will play a pivotal role in Europe’s decision to end its reliance on Russian gas.

Mitsotakis also discussed Greece’s ambitious yet not unattainable objective of becoming an energy hub in the Balkans, as a first step, as well as a key player in eastern Europe.

Three prospective LNG terminals – Alexandroupoli FSRU I and II, as well as Dioryga Gas, close to Korinthos, west of Athens – combined with the existing LNG terminal on the islet Revythoussa, just off Athens, that will soon acquire a fourth storage unit, could elevate Greece’s regional role as a main gas supplier in the Balkans and eastern Europe.

 

 

 

REPower EU plan overambitious, ‘an objective, not a specific strategy’

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The European Commission’s REPower EU transition plan, aiming to greatly reduce Europe’s reliance on Russian gas, is overambitious and should be regarded as an objective rather than a set of specific measures, officials taking part in the recent annual Gas Infrastructure Europe conference, an authoritative sector event, have concluded.

The calculations offered by the REPower EU plan are incorrect, Torben Brabo, GIE’s president, has told the Euractive agency, adding that a closer look at the figures concerning Russian natural gas supply, LNG supply, as well as biomethane projections, renders the European plan as overambitious.

LNG availability and purchase projections in the REPower EU plan are possibly too high, the GIE president stressed.

Officials linked with LNG infrastructure told the GIE conference that the LNG market’s actual conditions will prevent the EU plan’s lofty targets from being achieved. Anything beyond 50 percent of the target set will be difficult to attain, these officials contended.

American current gas liquefaction capacity does not suffice for supply of an additional 15 bcm of LNG to Europe, as specified in the EU plan, officials taking part in the GIE conference contended.

Qatar and other LNG exporters in the Middle East have already committed amounts to non-EU buyers, while the REPower EU plan’s 35-bcm biomethane objective appears to be too optimistic, they added.

 

 

 

 

Lignite re-emphasis temporary measure for security, PM says

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A government decision for an increased lignite share of the country’s energy mix is purely temporary and driven by energy security concerns, Prime Minister Kyriakos Mitsotakis clarified during a speech yesterday in Kozani, northern Greece.

The same goes for Athens’ thoughts about extending the lives of state-controlled power utility PPC’s two lignite-fired power stations, Meliti and Agios Dimitrios V. PPC plans to withdraw these units by the end of 2023, as part of the country’s decarbonization strategy, but this exit date may now be delayed.

The technical future of PPC’s Ptolemaida V, a new convertible power station, is unclear. During yesterday’s speech, the Greek prime minister informed that, if needed, this facility would operate as a lignite-fired facility until 2028, before switching to natural gas. This switch could be made at an earlier date if the war ends and natural gas prices fall significantly, seen as unlikely at present.

This overall change in direction is directly linked to the European Commission’s decision to significantly revise the EU’s Fit for 55 plan, originally setting a target for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels. Details of the Fit for 55 revisions, prompted by the impact on markets of Russia’s ongoing war in Ukraine and the EU’s resulting decision to drastically reduce its reliance on Russian natural gas, are expected to be announced by the European Commission in May.

The EU’s new energy strategy is expected to lead to an increase in the use of biomethane and green hydrogen, as well as reduced gas consumption, regardless of the supplier, be it Russia, the USA, Qatar or Algeria.

Authorities admit the international LNG market cannot increase production to a level that would fully replace Russian gas supply.

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.

 

EU falls short of decisive action on energy price de-escalation

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An EU-US agreement for supply of an additional 15 bcm of American LNG to the continent this year, as part of a plan envisioning annual supply amounts reaching 50 bcm by 2030, was the most important piece of news to emerge from the Brussels summit on March 24 and 25, along with a decision for joint LNG orders by the EU to producing countries.

Steps taken by the EU for natural gas and electricity price de-escalation were, once again, far from resolute. Though the EU leaders decided on the need for a price ceiling on natural gas, specific decisions were not taken. Instead, the European Commission was called upon to process proposals and present its conclusions by the next summit of EU leaders, scheduled for May.

Consumers in the EU, especially those in the south, more exposed to the energy crisis’ price fluctuations as a result of a lack of energy storage facilities, will, until further notice, need to keep persevering amid the insecurity and threat of escalated prices.

Today’s wholesale electricity price in Greece is 245.56 euros per MWh, up from Friday. Price levels in the short term will depend on how energy markets interpret the announcements following last week’s two-day summit.

 

 

EU headed for joint energy supply plan, challenges faced

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The EU appears headed towards adopting a strategy for joint supply of natural gas, LNG and hydrogen, along the lines of a policy implemented for joint Covid-19 vaccination orders at the height of the pandemic, to combat skyrocketing energy prices, a draft prepared ahead of tomorrow’s summit, bringing together the EU’s 27 leaders, has indicated.

Governments of Europe’s south, hit harder by the energy crisis, and European consumers across the continent are anticipating measures that can help contain sharply increased gas, electricity and oil prices.

The joint supply plan’s implementation would come as a bold initiative by the EU, taking steps to greatly reduce its reliance on Russian gas, but various obstacles will need to be overcome.

Joint energy orders will be far trickier for the EU to execute than the mass orders it had placed with pharmaceutical companies for Covid-19 vaccinations back in June, 2020, as the former are commodities traded in fluctuating markets.

LNG suppliers such as the USA, Qatar and Algeria would have to redirect to Europe quantities usually shipped to Asian markets at highly profitable prices. Also, the reaction of China, America’s number one buyer of LNG, remains unknown.

The joint-supply strategy would be combined with the establishment of an energy safety reserve, as the European Commission has ordered EU member states to fill underground gas storage (UGS) facilities to 90 percent of their capacities by November 1, in preparation for next winter.

This would resolve energy sufficiency concerns but currently elevated prices are an issue. Also, many European UGS facilities have, until now, been managed by Russia’s Gazprom. It remains unclear if the Russian gas giant would be legally obliged to abandon these facilities.

The joint-supply strategy has been on the negotiating table since last year but held back by disagreements.

 

 

Athens, Europe’s south hoping for brave crisis decisions

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Athens, along with other EU administrations, especially in Europe’s south, will be hoping for a brave European response to the energy crisis’ exorbitant prices at this week’s summit of EU leaders, scheduled for March 24 and 25.

Prime Minister Kyriakos Mitsotakis has joined forces with his counterparts from Italy, Spain and Portugal ahead of this week’s summit. The four leaders are hoping action, rather than just good intentions, as expressed by Europe’s north during an unofficial meeting a fortnight ago, will be taken.

That session highlighted a lack of agreement on the issue of a Eurobond as a common solution to help consumers in Europe cope with extremely higher energy prices.

Some analysts believe long negotiations could be needed at the forthcoming summit, as was the case in 2020, when European leaders worked for five days to eventually approve the Recovery and Resilience Facility as a means of helping economies bounce back from the impact of the pandemic.

Other analysts fear US president Joe Biden’s participation in the concurrent EU-NATO conference will overshadow talks for energy market intervention, postponing needed action for a next session.

 

 

Oil, gas prices surge to record levels, confirming Russia war market fears

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Oil and gas prices have reached unimaginable levels, breaking one record after another to cause the biggest market shock in decades and confirm fears of the extent of the impact Russia’s invasion of Ukraine would have on international energy markets.

Since Russia’s invasion of Ukraine almost a fortnight ago, prices for electricity, gasoline, diesel, natural gas, as well as grains and virtually all other basic commodities have skyrocketed after stabilizing at elevated levels over many months.

Yesterday’s price surges in international energy markets were extraordinary. Natural gas futures contracts, set for delivery in April, reached a record high of 345 euros per MWh, up 79 percent in a day, before de-escalating to 215 euros per MWh at the end of trading.

The Brent crude oil price is now steadily over 120 dollars a barrel. It has been driven higher by media reports of a US plan to ban Russian oil and gas imports.

Such price levels, even if there are no further rises, will result in major inflationary pressure for the global economy.

According to a Bloomberg report, US president Joe Biden is examining the prospect of imposing an embargo on Russian oil, even without the participation of European allies.

Any European breakaway from Russian gas supply would require extreme measures from European governments and the energy sector to cover the resulting gap and ensure energy supply needs for consumers and enterprises are met, officials at French energy group Engie noted.

Highlighting the shock felt in markets around the world, Ole Hansen, head of commodity strategy at Saxo Bank, remarked: “I’m lost for words.”

 

EC announcing plan to end EU dependence on Russian gas, oil

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The European Commission will today present a new energy plan for the EU-27 that will aim to end Europe’s dependence on Russian natural gas imports, amounting to roughly 155 billion cubic meters per year, as well as Russian oil.

Tools to be used for an end of this energy dependence will include LNG imports from the US and Qatar, further LNG terminal investments throughout Europe, accelerated development of RES projects, and emphasis on biogas and hydrogen.

A preliminary announcement of the EU’s new energy doctrine was made yesterday by European Commission President Ursula von der Leyen following a meeting with Italian Prime Minister Mario Draghi.

She also spoke of the need to protect consumers, especially lower-income groups, as well as enterprises, against skyrocketing energy prices as the continent braces for even higher electricity prices next month.

If natural gas prices remain at levels of over 300 euros per MW/h, wholesale electricity prices in Greece could soon exceed 700 euros per MWh. The wholesale electricity price in Greece today is at 462.90 euros per MWh, up 52 percent in a day.

The energy market turbulence is expected to persist until at least early next year.

 

European gas reserves rise slightly, helped by LNG inflow, weather

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Europe’s natural gas reserves have risen slightly, helped by the arrival of LNG tankers at European shores in recent weeks and, possibly more crucially, the mild winter weather experienced around the continent during the festive period, latest data has shown.

Gas deposit deficits have narrowed since December 24, while inflow marginally exceeded consumption between December 30 and January 1, according to Gas Infrastructure Europe (GIE).

This trend is definitely beneficial for Europe ahead of the further winter period, improving reserve levels for greater sufficiency until March.

Natural gas prices in Europe dipped to 66 euros per MWh yesterday before rebounding to 80 euros per MWh.

At present, it is estimated that 46 American LNG tankers are bound for Europe carrying a combined quantity of approximately 4.1 billion cubic meters. It remains to be seen if gas prices can keep falling.

 

Ministry official to hold strategic energy talks in Washington

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Strategic opportunities emerging as a result of the Greek energy market’s ongoing transformation as well as the geopolitical significance of certain major projects, such as the Southern Gas Corridor, intended to diversify Europe’s gas sources and reduce the continent’s dependency on Russian gas, will be discussed by the energy ministry’s secretary-general Alexandra Sdoukou with American officials during her visit to Washington this week.

The Greek official, travelling to Washington today, plans to hold discussions covering the entire range of energy policy issues, from new RES technologies, hydrogen, the energy mix, as well as investments of geopolitical nature, including Balkan gas interconnections, the Alexandroupoli FSRU project in northeastern Greece, the underground gas storage (UGS) facility at the almost depleted gas field of South Kavala in the Aegean Sea’s north, as well as Greece’s role as a regional hub for energy source and route diversification.

Inevitably, the talks will also cover the current energy crisis troubling the world, especially Europe.

US Secretary of Energy Jennifer Granholm has directly criticized Moscow for deliberately subduing its gas supply to Europe in order to manipulate the energy market and pressure Brussels for approval of Nord Stream 2, an underwater gas pipeline directly connecting Russia with Germany through the North Sea.

Certain countries that stand to lose significant gas transit revenues oppose this new pipeline. It has also generated years of conflict between Berlin and Washington. Nord Steam 2 has almost been completed and is now undergoing trial runs.

Europe is heavily dependent on Russian gas, while some countries in central and eastern Europe, including the Balkans, are almost entirely dependent. The US is seeking the greatest possible share for supply of American LNG.

Factors pushing up gas prices, economic activity threatened

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A combination of market conditions and structural matters has unbalanced natural gas markets throughout Europe, driving prices higher, which is severely impacting electricity prices.

Recovering economies following pandemic-induced flatness, combined with a policy applied by Russia, Europe’s main supplier, to significantly restrict gas outflow to the continent, has created energy crisis conditions.

In mid-August, Russian gas outflow through the Yamal pipeline, running across Russia, Belarus, Poland and Germany, has not exceeded 20 million cubic meters per day, following levels of as much as 49 million cubic meters per day just weeks earlier, still well under usual levels averaging 81 million cubic meters per day.

According to analysts, this reduction has been attributed to Gazprom’s preference to supply Russian gas through the Nord Stream 2 pipeline, bypassing Ukraine and Poland.

LNG supply to Europe has also fallen in recent times as Asian countries appear more willing to pay higher prices.

In addition, prices are also being impacted by EU climate-change policies designed to limit the use of fossil fuels, lignite as well carbon emissions, all of which has greatly increased demand for natural gas, not only in Europe, but Asia and the US, too, pushing up prices to levels of 48 euros per MWh in recent days.

Natural gas shortages have driven wholesale electricity prices higher. In Germany, for example, wholesale electricity prices have risen by 60 percent over the past year. In Spain, the government has reduced energy consumption taxes in an attempt to subdue the wave of price rises.

The situation in the energy market is extremely worrying as it affects economic activity and is placing millions of households at risk of finding themselves in energy poverty.

PPC bond issue, ESG-linked, attracts top international funds

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Some of the world’s biggest investors are among the foreign institutional investors who participated in power utility PPC’s recent bond issue as well as a supplementary issue staged yesterday, through which the corporation raised a grand total of 775 million euros.

Participants included US fund Blackrock, managing capital worth nearly 8 trillion dollars, fellow American fund Fidelity, whose portfolio is worth 440 billion dollars, the UK’s Apollo, managing 455 billion dollars, and France’s Pictet, with an investment portfolio worth 689 billion dollars.

The turnout for PPC’s bond issues was dominated by real-money investors, or institutional investors handling enormous amounts of cash reserves for long-term investments in companies with solid prospects. Their clients are chiefly retirement funds as well as corporations looking to the future.

Information made available until now on PPC’s bond issues indicates that 70 percent of subscribers were from abroad and 30 percent domestic. Among the foreign investors, half are institutional and real-economy investors, many of these cross-Atlantic.

US and European investors participated in the issues with shares of close to 50 percent each, while investors from Australia and Asia represented about 5 percent of subscriptions.

PPC’s initial bond issue raised 650 million euros at a borrowing rate of 3.875 percent, while yesterday’s follow-up issue raised an additional 125 million euros at 3.67 percent.

Bond issues linked with ESG (Environmental, Social and Governance) terms, as was the case with PPC’s two issues, are in high demand, internationally.

Through its issues, five-year bonds maturing in 2026, PPC has committed to a 40 percent reduction of CO2 emissions, from 23.1 million tons in 2019 to 13.9 million tons by 2022. If this target is not achieved, 50 basis points will be added to the yield.

ELPE seeking greater North Macedonia market share

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Hellenic Petroleum ELPE, aiming to capture a bigger share of the North Macedonian market, is currently negotiating for extrajudicial solutions that would enable the reopening of a company oil pipeline linking Thessaloniki with Skopje.

In an effort to help resolve this issue, ELPE has proposed a series of RES investments in the neighboring country as well as a conversion of its Okta refinery into a petroleum products hub facilitating distribution to the western Balkans.

December will be a crucial month for the negotiations between ELPE and North Macedonia as a verdict is scheduled to be delivered on an ELPE compensation request for 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

The North Macedonian oil market is dominated by two Russian companies, Gazprom and Lukoil, both gaining further ground. Gazprom supplies fuel products to North Macedonia via Serbia and Lukoil does so from Bulgaria.

US officials, seeking to inhibit the dominance of Russian energy firms in North Macedonia, have intervened to help resolve the country’s differences with ELPE.

Just days ago, a meeting on ELPE’s effort to reopen the oil pipeline was held in Thessaloniki during an official visit to the city by US Secretary of State Mike Pompeo. US government officials, Greece’s energy minister Costis Hatzidakis and North Macedonian government deputies participated.

For quite some time now, Washington has made clear its stance aiming to limit Europe’s energy dependence on Russian companies and, as a result, is promoting the ELPE oil pipeline as an alternative supply route into North Macedonia.

 

Greece keen to utilize American RES technology; funds eyeing market

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The government wants to utilize latest American technology for more recent RES and RES-related domains such as offshore wind farms and energy storage, the energy ministry’s secretary-general Alexandra Sdoukou noted yesterday during a meeting with US Secretary of State Mike Pompeo and other US officials in Thessaloniki.

For quite some time now, American renewable energy producers, institutional investors and funds have been scanning the Greek market for RES market opportunities.

A complete framework for offshore wind farms in Greece will be presented early in 2021, Sdoukou pointed out during yesterday’s meeting.

Major offshore wind farm development has been achieved off the American west coast, featuring, like the Mediterranean, waters of sudden depth, ideal conditions for the development of offshore wind farms.

US firms such as Invenergy, one of North America’s biggest wind energy producers; 547 Energy, a RES platform for Quantum Energy Partners; National Energy; and wind energy equipment manufacturer General Electric, have displayed a rising interest in the Greek market.

Besides RES and RES-related companies, a number of American funds are seeking investment opportunities in Greece.

At least ten US funds appear to be keeping a close watch on power utility PPC as a result of the corporation’s strategic turn to renewable energy.

They include Bell Rock Capital, Sephora Investment Advisors, Waterwill Capital Management, Cleargate Capital, Golden Tree Asset Management, Helm Investment Partners, Knighthead Capital Management, Craftsman Management, Colt Capital Partners and Kirkoswald Αsset Μanagement.

 

 

 

 

 

ELPE negotiating reopening of North Macedonia oil pipeline

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Hellenic Petroleum ELPE, Greek government and North Macedonian officials have begun talks aiming for the reopening of an oil pipeline linking ELPE’s Thessaloniki refinery with the company’s Okta refinery in the neighboring country through an extrajudicial settlement by the end of the year.

The issue was discussed at a meeting in Thessaloniki yesterday, held on the sidelines of a visit by US Secretary of State Mike Pompeo.

At the meeting, the ELPE and North Macedonian government officials appeared keen on achieving an out-of-court settlement, sources informed.

The Greek petroleum group is seeking compensation of 32 million dollars for a breach, by the neighboring country, of contractual obligations concerning minimum supply amounts between 2008 and 2011.

ELPE has already won an older case, on the same issue, at the International Court of Arbitration in Paris for compensation worth 52 million dollars. This verdict was delivered in 2007, three years after the case was filed.

The Greek and North Macedonian sides, encouraged by the US, agreed to form a committee to work, until mid-October, on a solution that could enable the oil pipeline to reopen following a seven-year interruption, sources informed.

The officials have set a deadline to reopen the pipeline by the end of the year, sources added.

ELPE has completed all technical work needed for the oil pipeline’s relaunch, sources said. The pipeline’s use in place of oil tankers would offer drastic transportation cost cuts.

The ELPE officials updated North Macedonia’s government officials on the company’s investment plan for the neighboring country, sources said. It is believed to include RES investments and a conversion of ELPE’s Okta facilities into a petroleum products hub that would serve the western Balkans.

ELPE is already present in Serbia and Montenegro and is now targeting the markets of Albania and Kosovo for supply of ready-to-use petroleum products.

The oil pipeline stopped operating in 2013 after ELPE deemed its Okta refining activities were no longer feasible. The 213-km pipeline has a 350,000-metric ton capacity.

Until 2013, the pipeline was used to transfer crude oil from ELPE’s Thessaloniki refinery to the Okta unit in Skopje.

Greek energy minister Costis Hatzidakis chaired yesterday’s meeting, which involved the participation of secretary-general Alexandra Sdoukou; deputy minister for economic diplomacy Kostas Fragogiannis; ELPE president Giannis Papathanasiou; ELPE chief executive Andreas Siamisiis; North Macedonian government deputies Liupko Nikolovski and Fatmit Bitikji; the country’s economy minister Kreshnik Bekteshi; US Assistant Secretary of State for Energy Resources Francis Fannon; and the US Ambassador to North Macedonia Kate Marie Byrnes.

Cox Enterprises begins Greek RES entry with Panagakos deal

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Cox Enterprises, a privately held global conglomerate headquartered in the US and holding interests primarily in automotive services, communications and media, has reached an agreement with Spec Solaris, a member of the Panagakos Group, for the immediate purchase and development of solar energy farm projects with a total capacity of 18 MW.

These projects represent part of a 275-MW package of 43 PV parks in mainland Greece and the Peloponnese for which the Panagakos Group has secured tariffs.

This deal is expected to be the American investment company’s first of more to come in Greece. Cox Enterprises, currently pursuing investment opportunities in various sectors around the world, is believed to be aiming to amass a Greek RES portfolio of about 1 GW.

The American investment fund, which appears to have sought RES capacities of approximately 400 MW in Greece in the past, through other companies, is currently seeking further acquisitions of solar and wind projects in Greece, either under construction or at a mature stage. It has held talks with Greek companies without reaching any agreement so far.

The first batch of 18 MW in Spec Solaris solar energy projects to be acquired by Cox Enterprises must be ready by January, 2021, meaning their installation needs to be carried out swiftly if binding terms are to be honored.

The American investment company is believed to have reached an agreement with a listed Greek firm for the project’s construction.

The American investment firm is expected to soon also acquire the remaining 257 MW of solar energy park capacities held by the Panagakos Group. These have completion deadlines ranging between April and October in 2022.

The 275-MW package held by Spec Solaris was inducted into a fast-track procedure for strategic investments a decade ago.

Cox Enterprises is believed to be one of dozens of foreign investment funds seeking to make a dynamic entry into the Greek RES market, especially the PV sector, offering attractive terms, including fixed 20-year yields.

 

 

 

 

 

 

Alexandroupoli FSRU investment decision later in ’20

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Investors behind the Alexandroupoli FSRU are expected to make final decisions on the project’s development in the final quarter of this year.

Two pending issues, the completion of a regulatory framework for the project, as well as approval by the European Commission’s Directorate-General for Competition of the project and funding via the National Strategic Reference Framework (2014-2020), are expected to be resolved by the final quarter.

Also, RAE, the Regulatory Authority for Energy, is soon expected to reach a preliminary decision exempting the FSRU from compulsory access to third parties as well as tariff adjustments every three to four years. This decision, needed for the project’s regulatory framework, is expected by late October or early November, when the European Commission’s approval is anticipated.

The Directorate-General for Competition will also need to give the green light for NSRF funding.

Once these pending issues are all resolved, investors will be able to decide on the project’s development, expected to require two years to construct. Investors envision a launch in 2023.

Yesterday’s anticipated entry of Bulgartransgaz, for a 20 percent stake, highlights the project’s regional prospects. This regional dimension will be highlighted even further if ongoing Romanian interest is materialized.  Talks that have been going on for some time were disrupted by the pandemic.

For the time being, Greek gas utility DEPA, Gaslog and Bulgartransgaz each have 20 percent stakes, while the Copelouzos group holds a 40 percent share. The entry into the project of Gastrade, as a fifth partner, remains pending.

Most crucial for the project’s prospects, a market test completed in March showed that the Alexandroupoli FSRU is sustainable. The test prompted a big response from Greek and international gas traders, who placed capacity reservation bids for a total of 2.6 billion cubic meters per year.

US interest for LNG supply via the Alexandroupoli FSRU is strong. Last year, Cheniere sold a big shipment to Greek gas utility DEPA, while a further ten American shipments have been made so far this year.

US investments in Greek RES sector rising, LNG imports up

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New US investments in Greece’s RES sector are on the rise, the energy ministry has stressed following a meeting yesterday between Greek energy minister Costis Hatzidakis and the U.S. Ambassador to Greece, Geoffrey Pyatt, for a discussion on major energy project plans in the wider region and the related American investment activity.

U.S. companies such as ONEX, Black Summit, with support from DFC (International Development Finance Corporation), Quantum Energy Partners, National Energy, General Electric, Fortress Investment Group, Blink and Tesla are all currently pursuing investments in the Greek market.

Hatzidakis, the energy minister, expressed satisfaction over the level of foreign investments in Greece, noting U.S. participation has significantly increased, especially in the energy sector.

Last month, 547 Energy, an American renewable energy venture backed by Quantum Energy Partners, participated for a third time in a row in a RES auction staged by RAE, the Regulatory Authority for Energy, adding 107 MW in wind energy capacity to its Greek portfolio for a current tally of eight RES projects and 390 MW, the energy ministry noted.

National Energy is drawing American funds to develop wind and solar energy projects in Greece with a total capacity of 270 MW, the statement added.

Also, the energy ministry noted, General Electric has supplied equipment for a wind energy farm in Fokida, west of Athens, a project being partially financed by the Fortress Investment Group; Blink recently began an investment plan in the electromobility sector, for rechargers and other equipment; while Tesla, a producer, amongst other things, of electric vehicles, recently announced a plan to expand its operations into Greece.

During their meeting, Hatzidakis and Pyatt also discussed the partnership between Greece, Cyprus and Israel, plus the U.S.

The progress of work at the Greek-Bulgarian IGB gas pipeline, whose geostrategic importance was stressed by the Greek minister, was also addressed. A closer association with Bulgarian contractors is being sought for the project’s punctual delivery.

Work on the Alexandroupoli FSRU in northeastern Greece is progressing at a satisfactory pace, the two officials agreed, noting the project will have a positive impact on geostrategic and energy matters.

The U.S. supplied nearly half of the 2,651,903 cubic meters of LNG imported into Greece in the first half of 2020, almost quadruple the amount supplied by America to Greece during the equivalent period a year earlier.

Tension rises as Turkish vessel enters Greek continental shelf

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The situation concerning the Turkish research vessel Oruc Reis, which entered the easternmost point of the Greek continental shelf yesterday, is unchanged today, the Athens-Macedonian News Agency has reported.

Oruc Reis is accompanied by Turkish naval units, while the situation is being monitored by the Greek Armed Forces, the Greek news agency has reported.

Tension has re-escalated in the east Mediterranean since yesterday afternoon, with Turkey disputing, in practice, the Greek-Egyptian EEZ agreement through the presence and maneuvering of its Oruc Reis research vessel and Turkish warships.

Turkish survey systems are believed to be ready for application, but, according to Greek estimates, research work cannot proceed as a result of noise being generated by nearby ships, both Greek and Turkish.

Greek navy units, lined up opposite the Turkish ships, are seeking to prompt a Turkish withdrawal. The Greek Air Force and Army are also on standby.

Posting on Twitter, Cagatay Erciyes, a senior Turkish Foreign Ministry official, noted that Greece has created problems because of a 10-square-kilometer Greek island named Kastellorizo, which lies 2 kilometers away from the Turkish mainland and 580 kilometers from the Greek mainland.

“Greece is claiming 40,000 km2 of maritime jurisdiction area due to this tiny island and attempting to stop the Oruc Reis and block Turkey in the eastern Mediterranean.

“This maximalist claim is not compatible with international law. It is against the principle of equality. Yet Greece is asking the EU and US to support this claim and put pressure on Turkey to cease its legitimate offshore activities. This is not acceptable and reasonable,” he said.

Cyprus has responded by issuing a Navtex of its own, effective from today until August 23, through which it notifies that the Turkish research vessel Oruc Reis and accompanying vessels are conducting illegal operations within Cyprus’ EEZ.

Rescue talks for Prinos, Greece’s only producing field, making progress

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Talks between Energean Oil & Gas and officials at the energy and economy ministries for a solution to rescue offshore Prinos, Greece’s only producing field in the north, are making progress, sources have informed.

Heightened Turkish provocations in the Aegean Sea over the past few days – the neighboring country sent a survey vessel into Greece’s EEZ – and greater US presence in the wider southeast Mediterranean region, are two developments that have injected further urgency into the Prinos field rescue talks.

The east Mediterranean is at the core of geopolitical developments that promise to create new political and energy sector conditions.

US oil corporation Chevron, America’s second-biggest energy group, has joined fellow American upstream giant ExxonMobil in the east Mediterranean with a five billion-dollar acquisition of Noble Energy.

This takeover by the California-based buyer adds to the Chevron portfolio the gigantic Leviathan gas field in Israel’s EEZ, as well as the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet.

It also offers Chevron prospective roles in the East Med pipeline, to supply Europe via the Leviathan field, and Egypt’s LNG infrastructure, all elevating the petroleum group into a dominant regional player.

Israel and Cyprus recently ratified the East Med agreement, as has Greece, while Italy appears to be examining the prospect.

In another regional development, the Total-ENI-ELPE consortium is preparing to conduct seismic surveys at licenses south and southwest of Crete, and an environmental study southeast of Crete has been approved by Greek authorities. Also, oil majors with interests in Cyprus’ EEZ have planned a series of drilling operations for 2021.

Meanwhile, Turkey, trespassing into both Greek and Cypriot EEZ waters, consistently cites a memorandum recently signed with Libya as support for its actions, as well as its refusal to sign the UN’s International Law of the Sea treaty, strongly disagreeing with an article that gives EEZ and continental shelf rights to island areas.

Greek government officials are well aware that closure of the Prinos field amid such precarious conditions would lead to major consequences, not just economic and social, as would be the case under normal conditions, but also geopolitical.

Turkey tensions will not be escalated, ‘aim achieved’

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Turkey will not continue intensifying its provocations in the East Mediterranean as the neighboring country has already achieved its main goal, a State Department declaration noting that the country is performing hydrocarbon exploration activities in disputed territory, Dr Konstantinos Nikolaou, a seasoned petroleum geologist and energy economist, supports.

Turkey’s provocations over the past few days – the country sent a seismic survey vessel into Greek EEZ waters for further exploration work following such initiatives in the past – represent part of a carefully planned strategy whose aim is to end Turkey’s East Mediterranean isolation of recent years and put the country back in the frame of the region’s hydrocarbon developments, experts believe.

Turkey has refused to sign the UN’s International Law of the Sea treaty, strongly disagreeing with Article 121, giving EEZ and continental shelf rights to island areas.

Instead, the country has followed its own rules, adjusting them as it pleases, to avoid giving any rights to island areas.

Besides seeking to reinforce the country’s position that rejects any EEZ rights for islands, the latest Turkish moves also aim to cancel EEZ agreements signed by Cyprus with Egypt, Israel and Lebanon.

Turkey has unsuccessfully sought to sign an EEZ agreement with Egypt, during Muslim Brotherhood times.

Dr. Nikolaou predicts that there will be no Turkish movement south of Crete as the transfer of an area by Libya, Turkey’s regional partner, would be required. The area of Benghazi is not controlled by Fayez al-Sarraj, the head of Libya’s UN-recognized government, but by renegade commander Khalifa Haftar.

Ultimately, the Turkish strategy in the wider region is aiming for co-exploitation of hydrocarbon deposits that may be discovered.

Chevron buys Noble Energy, US striving for regional control

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Energy corporation Chevron has become the latest American giant, following ExxonMobil, to establish itself in the east Mediterranean upstream market following a five billion-dollar acquisition of Noble Energy, a deal that adds the gigantic Leviathan gas field in Israel’s EEZ to the California-based buyer’s portfolio and elevates the petroleum group into a dominant regional player.

This latest development highlights America’s strategy for the region, aiming to establish US control of production at new gas fields as well as supply to Europe, analysts noted.

Chevron’s acquisition of Noble Energy, highlighting the upstream industry’s elevated interest in the east Mediterranean, comes amid increased regional tension prompted by Turkish provocation. Greece’s neighbor has just sent a seismic survey vessel into Greek waters for hydrocarbon exploration activities.

Besides the Leviathan gas field’s recoverable reserves, estimated at 22 trillion cubic feet, the Chevron portfolio now also takes on Israel’s Tamar field, whose gas reserves are estimated at 7.1 trillion cubic feet.

Noble has proved reserves of 2.05 billion barrels of oil and gas to add to Chevron’s reported 11.4 billion.

Chevron, whose earnings in 2019 reached 139.9 billion euros, also adds to its assets, totaling 237.4 billion dollars, the Aphrodite gas field, situated within the Cypriot EEZ and estimated to hold 4.5 trillion cubic feet. Noble Energy is among this field’s operators.

Chevron’s control of the Leviathan gas field also secures American influence over the EastMed gas pipeline planned by Israel, Cyprus and Greece.

Fellow American petroleum giant ExxonMobil recently discovered, within the Cypriot EEZ, the Glafkos gas field, estimated to carry between 5 and 8 trillion cubic feet of gas. ExxonMobil has also taken on major licenses in Egypt and is also a member of a consortium formed with France’s Total and Hellenic Petroleum (ELPE) for licenses at offshore blocks west and southwest of Crete.

 

Terna Energy sells Idaho wind farm for profit of more than $30m

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Greece’s Terna Energy has announced the sale of its 138-MW Mountain Energy wind energy park in the US state of Idaho to Innergex Renewable Energy for a sum of 215 million dollars, securing a profit of more than 30 million euros.

This facility’s operating profit in 2019 reached 17.6 million dollars.

Following the sale of its Idaho unit, Terna Energy, which entered the American green energy market in 2011, now owns and operates three wind energy parks with a total capacity of approximately 512 MW, all in the state of Texas.

“Approximately ten years ago, we took a strategic decision to expand our investment program into the US market. This decision has proven to be extremely beneficial for the group and its shareholders as, besides the significant increase in group profitability, it has also offered major gains and capital for our new investment program,” noted Giorgos Peristeris, CEO at Terna Energy. “We have already planned 1.7 billion euros of investments in Greece for the green energy, pumped storage and waste management sectors,” he added.

Terna Energy will continue to bolster its growth in the US green energy market, Peristeris noted.

The company is focused on investment opportunities that promise big gains for shareholders, he said.

Terna Energy’s portfolio is now comprised of facilities – operational, under construction or at the pre-construction stage – with a total capacity in excess of 1,800 MW in Greece, the US, central and eastern Europe.

The group aims to increase its total installed capacity to 2,800 MW over the next five years.