USA

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.

 

US wants Greece as partner for pumped storage projects

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Recognizing the importance of pumped storage hydropower technology as a means for energy storage, the US is promoting the establishment of a related international forum to bring together countries and companies for co-development of such projects.

According to sources, Greek deputy energy minister Gerassimos Thomas has received an invitation from the US department of energy and the International Hydropower Association requesting Greece’s participation in a US-headed multidisciplinary platform that will seek to reinforce the role of pumped-storage technology in current and future energy systems.

Pumped storage hydropower supply during the pandemic has provided vital energy support for US households, hospitals and schools, American experts have determined.

Washington believes pumped storage hydropower projects are capable of enhancing the reliability of grids and supporting further renewable energy penetration. This technology, regarded as tried and tested, can be further developed in the energy transition era, US experts support.

Pumped storage hydropower currently represents about 94 percent of global energy storage capacity, latest data has shown.

A pumped storage hydropower project planned by Greece’s GEK TERNA in Amfilohia, western Greece, is regarded as a pioneering initiative in Europe.

The country’s energy ministry has approached the European Commission for special funding support for this project, budgeted at over 500 million euros.

 

US backs Greece’s east Mediterranean activities, major projects

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

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

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

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

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

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

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

Greece, Cyprus, Israel, with US, plan for EastMed meeting next month

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The energy ministers of Greece, Cyprus and Israel plan to stage a trilateral meeting next month, with US involvement, for talks on the prospective EastMed gas pipeline, to transport gas from Israeli and Cypriot fields to Europe via Greece and Italy.

It remains uknown if Francis Fanon, the US Assistant Secretary of State and head of the country’s energy portfolio, will participate at this meeting.

It also remains unclear if participants will stage a virtual conference as a result of pandemic measures or meet in person.

The Greek, Cypriot and US governments were waiting for the new Israeli government to be sworn in before shaping plans for the EastMed meeting, to also serve as a second energy conference between the four nations following an inaugural session in Athens last August.

Yuval Steinitz has been reappointed at Israel’s top energy post, meaning the line-up of last year’s session between the Greek, Cypriot and Israeli energy ministers can be repeated at the next meeting. Greece’s Costis Hatzidakis and Cyprus’ Giorgos Lakkotrypis are still at their posts.

The Greek, Cypriot and Israeli government officials are expected to reaffirm the commitment of their respective countries to the EastMed gas pipeline, as well as commitment to cooperation for regional peace and prosperity, sources said.

Also, the energy ministers of Greece, Cyprus and Israel, along with the session’s US representative, will seek to send Turkey a unified message on its provocative actions against Greece as well as increased aggression in the wider southeast Mediterranean region.

A trilateral EastMed gas pipeline agreement was approved in Greek Parliament last January.

Israel could soon reach a decision on the financing of some of the studies needed for the international pipeline’s link to the national grid.

Also, IGI Poseidon, a consortium comprising Greek gas utility DEPA and Italy’s Edison, is moving ahead with studies for the pipeline’s underwater and overland route between Greece and Italy. IGI Poseidon wants to make an investment decision on this project within the next two years. Meanwhile, Cyprus is making progress on licensing matters.

Flight reconnections, geopolitics key for IPTO sale rescheduling

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Rescheduling details of a privatization plan for the sale of an additional stake in power grid operator IPTO will depend on the restart of the Athens-Beijing flight route, the reestablishment of face-to-face contacts blocked by the pandemic, as well as a reduction in geopolitical tension between China and the west.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Skillful diplomacy will clearly be needed to overcome any EU and US objections to an increased SGCC share in IPTO. Video conferences would prove insufficient. Greek foreign ministry officials will need to make at least one trip to China for related talks.

Greek governmnent officials intend to travel to Beijing for work on various matters following the summer, sources informed energypress. Bilateral issues have accumulated during the several months of lockdown. Many cancelled meetings need to be rescheduled.

More crucially, in the lead-up, the Greek side will need to prepare for these Beijng meetings by working through related matters with officials in Brussels and Washington.

WTI may plunge again, local market indirectly impacted

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Monday’s unprecedented collapse on the US market of May oil futures, driven down to negative territory by a pandemic-induced evaporation of demand that left the world with an oil oversupply and not enough storage capacity — meaning producers were willing to paying buyers to take it off their hands – could be repeated towards the end of May for June oil futures, analysts have noted.

Besides this week’s price collapse of oil futures in the US, the biggest day-to-day price drop in the history of oil trading was also recorded Monday.

Output, especially by small-scale producers, will gradually be wound down for market equilibrium, or a production correction reflecting the dive in demand prompted by these extraordinary times. However, this process will require some time and may be achieved slightly before June, according to a Goldman Sachs estimate.

The below-zero prices have mostly affected holders of futures contracts, the majority of these being traders, not actual buyers of oil. Actual buyers, namely refineries, make oil purchases at average price levels determined over extended time periods.

The Greek oil market is not directly influenced by the US market’s WTI index, but, instead, primarily takes its cue from Brent prices. Their fall was less acute, dropping to a level of 19 dollars per barrel when the WTI had fallen into negative territory. Brent prices then rose to levels of between 20 and 25 dollars per barrel the following day, yesterday.

The current oil market volatility has created conditions for lower price levels but the lockdown does not permit consumers to take full advantage.

 

US oil futures collapse to below-zero price, unprecedented

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US oil price futures collapsed to unprecedented below-zero prices in New York trading yesterday as a result of the coronavirus pandemic’s evaporation of demand that has left the world with excess oil and not enough storage space, meaning producers are paying buyers to take it off their hands.

The price of crude scheduled for delivery in May collapsed by 55.90 dollars, or 306 percent, to -37.63 dollars per barrel. This means that US traders will need to be paid to forward crude to the country’s main delivery point of Cushing, Oklahoma.

The previous record low figure, 10.42 dollars per barrel, was reached on March 31, 1986.

Considerably higher prices for June, registering approximately 21 dollars per barrel last night, indicate slightly better trader expectations concerning the supply and demand balance as the second half of the year.

 

France’s Total wins intensely fought tender for 3 LNG orders

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France’s Total has emerged as the winning bidder in an intensely contested tender staged by Greek power utility PPC for three LNG shipments between March and May, sources from abroad have informed.

The French company outbid rivals for all three shipments, totaling 2.66 million MWh, but price levels were driven to particularly low levels as a result of intense bidding, the same sources noted.

Over the past few weeks, LNG prices in Asia have slumped to record lows, including yesterday, battered by the negative impact of the coronavirus on trade. Many Chinese factories have been forced to interrupt operations. Meanwhile, US LNG is flooding markets.

Given the combined effect of these market conditions, many of twelve bidders said to have participated in PPC’s tender were prepared to submit offers as low as one percent below the Dutch TTF index, which has tumbled to a level of approximately 10 euros per MWh over the past few days.

Of the twelve participants in the PPC tender, whose deadline expired on Wednesday, the five most competitive candidates were asked to make their best and final offers yesterday.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

This tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

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

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

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

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

 

PPC expects major LNG tender turnout for 2.7 million MWh

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Gas suppliers are expected to turn up in numbers for a power utility PPC tender expiring today with offers to provide three LNG shipments needed by the utility between March and May. PPC plans to purchase a total of 2.66 million MWh through this tender.

Between nine and ten gas suppliers, including major Greek and foreign LNG players, will submit offers, PPC has been informed, according to energypress sources.

Besides leading Greek gas traders, the procedure is expected to attract companies such as Rosneft, Eni Trading, Gunvor, Glencore, Shell, Cheniere and Tellurian.

All participants were required to sign Master Sale Agreements, committing them to their offers without any revisions.

PPC wants a first LNG shipment of 900,000 MWh on March 24, a second delivery of 815,000 MWh on April 21 and a third of 950,000 MWh on May 20.

Today’s tender confirms a change of strategy by PPC, searching markets around the world, from Asia to Qatar and the USA to Russia, for low-priced LNG.

The continual drop in LNG prices promises major cost savings for a company the size of PPC, requiring 1.35 bcm per year.

 

Rising LNG imports reshaping gas market, led by Mytilineos

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The drastic reduction of LNG price levels in recent times has not only boosted the amount of LNG imports into Greece but also reshaped market shares held by domestic gas traders.

Last year, natural gas consumption rose to a new record level of more than 60 TWh, up from 52.4 TWh in 2018 and 53.7 TWh in 2017.

LNG imports rose sharply to 30.92 TWh in 2019 from 11.59 TWh in 2018 and 15.54 TWh in 2017.

Overall gas consumption increased by approximately 15 percent last year while LNG import levels nearly tripled compared to two years earlier.

For the first time ever, LNG represented half of the country’s total gas consumption in 2019.

In 2019, a total of six traders imported LNG to the Revythoussa terminal, close to Athens, some of these for the first time.

Mytilineos made the most LNG shipments for a 50.2 percent share. Gas utility DEPA followed with a 26.1 percent. Elpedison was next with a 12.4 percent market share, trailed by power utility PPC (7.6%), Heron (2.4%) and Motor Oil (0.4%).

Market leader Mytilineos imported a total of ten LNG shipments to the Revythoussa terminal in 2019, some of these originating from the US, via Shell and BP, managing US shale gas exports.

A total of six LNG shipments to Greece in 2019 carried American shale gas. This trend is continuing this year. A 140,000 cubic-meter shipment of American LNG arrived at the Revythoussa terminal on January 25.

Mytilineos also chartered large-scale Q Flex tankers to Revythoussa in 2019, a development enabled by the completion of upgrade work at the LNG facility.

The Q Flex tankers, built in Qatar and offering a 201,000 cubic-meter capacity, were previously unable to approach the Greek terminal.

 

US renewable energy giant Invenergy to open Athens office

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Invenergy, one of the six biggest owners of wind energy parks in the USA and the leading wind energy developer in North America, is preparing to set up an office in Athens for renewable energy investments in the Greek market.

An international player also operating in Mexico, Latin America, Japan, the UK and Poland, Invenergy has developed some 150 projects with a total capacity of 24,100 MW, covering the electricity needs of 4.77 million households, according to the company website.

The Chicago-headquartered company, which employs 950 staff members at posts around the world, had opened up an Athens office in the past but it was eventually shut down as a result of a lack of domestic activity in the RES sector.

Invenergy maintains a diverse and rapidly growing portfolio which, besides wind energy, also includes solar energy, natural gas-fueled power stations and energy storage.

The company is currently looking to recruit an international development manager for its Athens office with responsibilities including development of renewable energy and gas projects, mainly in Greece, as well as business growth support for southeast Europe and, possibly, other regions, Invenergy posted on its website just days ago.

Development minister Adonis Georgiadis, commenting shortly after Prime Minister Kyriakos Mitsotakis’ recent trip to Washington, noted – without naming – that one of the USA’s biggest renewable energy companies was preparing to enter the Greek market for battery production.

Bioethanol, Iran tension lift gasoline prices by four cents per liter

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Motorists, in recent days, have faced the prospect of gasoline price hikes of as much as three to four cents per liter, compared to December 31 levels, escalating tension in the Middle East following the assassination of Iranian military commander Qasem Soleimani in a US drone attack ordered by President Donald Trump and the event’s impact on the international oil market being a key factor.

Another – less publicized and possibly more important – factor also leading to fuel price rises concerns an EU law requiring greater use of bioethanol, produced from a renewable source. Over the past year, a new EU law for cleaner energy has obligated refineries to include biofuels in their fuel mix.

As a result, the percentage of bioethanol included in conventional gasoline mixes has increased as of January 1, increasing gasoline production costs.

Subsequently, the price of gasoline at local refineries has risen from 1,173.59 euros per cubic meter on December 31 to 1,198.59 euros in prices registered January 1 and 2. This represents an overnight price increase of 25 euros per cubic meter or 2.5 cents per liter. The price rise will begin taking effect at petrol stations today, the end of the extended festive season in Greece.

The rising concerns in the Middle East combined with the cleaner auto fuel initiative will result in a retail price increase of approximately four cents per liter.

Worse still, a retaliatory attack by Iran on Saudi facilities, or an effort by Tehran to block the Strait of Hormuz, a corridor through which 20 percent of global oil is transported, would prompt far sharper price hikes. The latter scenario would lift oil prices to over 150 dollars a barrel, according to a report by research company Capital Economics.

 

 

East Med, IGB, Alexandroupoli FSRU upgrading Greek role

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

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

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

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

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

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

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

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

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

 

Energy deputy presenting NECP in Brussels, Paris, NYC

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The country’s newly unveiled National Energy and Climate Plan will also be presented in Brussels today by deputy energy minister Gerassimos Thomas at the council of EU energy ministers, the first stop in a series of presentations abroad.

Over the next few days, Thomas will also be taking the plan to Paris and New York for official presentations.

In Brussels, today, the Greek energy deputy will present the NECP’s ambitious targets to peers and intends to highlight that many of these goals will seek to exceed the expectations of the new European Commission.

The initial response to the NECP’s objectives, by Brussels and investors, has been extremely encouraging. The Greek plan is seen as far more ambitious than those of many other EU member states.

All EU member states will be presenting the key aspects of their respective NECPs at today’s council meeting.

The European Commission will then determine whether proposals made by Brussels last June have been adopted by member states for their NECPs, all revised.

The Greek energy deputy’s Paris sessions, later this week, include an International Energy Agency (IEA) event on the climate.

In New York, Thomas is scheduled to attend an annual Capital Link forum on Monday, whose latest edition is focused on Greece, for contact with investors, major investment banks and energy sector experts closely monitoring the Greek market’s developments.

Besides Thomas, a host of other Greek ministers and deputies, as well as leading officials of the country’s four main banks, are expected to participate at the New York event, titled “21st Annual Capital Link Invest in Greece Forum – Greece is Back”.

 

Balkans-focused energy forum on eve of Thessaloniki fair

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Two key regional gas pipeline projects involving Greece and backed by the US, the Greek-Bulgarian IGB gas grid interconnection and a pipeline to link Greece and North Macedonia, will be at the center of attention in talks between energy minister Costis Hatzidakis and peers at the Southeast Europe Energy Forum in Thessaloniki on September 6, a day ahead of the opening of this year’s Thessaloniki International Fair.

Hatzidakis and the US Ambassador to Greece, Geoffrey R. Pyatt, will be key speakers at the forum, where speeches will also be delivered by the energy ministers of Bulgaria, Cyprus, Israel, North Macedonia, Romania and Serbia.

Besides the prospective gas pipeline from Greece to North Macedonia, the talks between Hatzidakis and his North Macedonian peer will also focus on an upgrade of the electricity grid interconnection linking the systems of the two countries, as well as an upcoming relaunch of the Okta oil pipeline, stretching from an ELPE (Hellenic Petroleum) facility in Thessaloniki to the company’s Okta refinery and storage facility in North Macedonia.

The gas pipeline is the most important project of the three as an interconnection of the Greek and North Macedonian gas systems does not exist.

The Greek-Bulgarian IGB gas interconnection, along with TAP, to carry Azeri natural gas through northern Greece, Albania and across the Adriatic Sea to central Europe via Italy, are Greece’s two most significant international energy projects.

They promise to further diversify Europe’s energy sources and weaken Russia’s dominance in the region.

Meanwhile, Russia is promoting its own energy and geopolitical interests in the region. Last month, Greece was excluded from Turkish Stream, a Russian-Turkish gas pipeline plan whose second segment is now planned to run through Bulgaria, not Greece.

The first segment of this gas pipeline project is planned to supply Russian natural gas to the Turkish market and the second to Europe’s south and southeast.

 

Greek, Cypriot, Israeli officials seeking Italy’s East Med return

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Greek, Cypriot and Israeli officials are working on details of a plan aiming to win back Rome’s support for the East Med pipeline, an ambitious 1,900-km pipeline to carry southeast Mediterranean natural gas from Israel to Europe via  Italy.

Efforts by Washington and Brussels to lure back Italy, whose coalition government has withdrawn the country’s support for the project, are pivotal.

Part of the overall diplomatic effort may be unveiled at an Athens energy summit today.

The Greek, Cypriot and Israeli energy ministers, Costis Hatzidakis, Giorgos Lakkotrypis and Yuval Steinitz, respectively, as well as US Assistant Secretary Francis Fannon, are taking part in the summit.

Fannon held successive meetings in Athens yesterday with Greece’s energy minister and the deputy foreign minister Konstantinos Fragogiannis. The East Med project’s promotion was a key subject of these meetings, especially Fannon’s talks with Hatzidakis, Greece’s energy minister.

Last May, Italian Prime Minister Giuseppe Conte, heading Italy’s right-wing populist coalition, declared Rome does not want the East Med pipeline to land on Italian territory. Instead, he proposed the pipeline’s link to TAP, another gas pipeline project being developed to carry Azerbaijani natural gas to Europe, via Italy.

East Med is envisioned to primarily carry deposits from Cyprus’ recently discovered “Aphrodite” gas field and the Israeli-controlled block “Leviathan” along a route stretching from Israel to Europe, also via Italy.

In response to Italy’s stance, Israel now appears to favor an alternate route for East Med that would avoid ending up on the Italian coast. Experts regard this prospect as difficult but not impossible as the pipeline project is still at the planning stage. Greece and Cyprus prefer Italy’s incorporation into the pipeline route.

 

 

New effort for East Med agreement at Athens energy summit

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Greek gas utility DEPA and Italian energy giant Edison, collaborating on a plan to develop the East Med pipeline, envisioned to link the Greek, Cypriot and Israeli natural gas systems, are looking to take a crucial technical step ahead of construction.

Their YAFA Poseidon joint venture – spearheading the ambitious project, a 1,900-km pipeline stretch with an investment cost of between 6 and 7 billion euros – is gearing up for the launch of FEED (Front-End Engineering Design), environmental and detailed underwater research studies.

The European Commission has approved 34.5 million euros from the EU’s Connecting Europe Facility (CEF), a funding instrument, for these studies. The CEF amount will cover half the cost of the aforementioned preliminary studies, which will push the plan ahead to a mature stage.

The pipeline project is planned to carry southeast Mediterranean natural gas, primarily deposits from Cyprus’ recently discovered “Aphrodite” gas field and the Israeli-controlled block “Leviathan”, along a route stretching from Israel to Europe.

An agreement between Greece, Cyprus, Israel and Italy, where the pipeline is planned to conclude, is still needed.

East Med plans have been at a standstill ever since the current Italian government announced it was stalling the project.

According to sources, the Greek, Cypriot and Israeli energy ministers will seek to restart procedures and also send out a message of encouragement to the Italian government when they meet at an Athens energy summit tomorrow. US Assistant Secretary Francis Fannon will also participate.

East Med, still at a theoretical stage, promises geostrategic might for Greece, Cyprus and Israel, as well as the USA, on southeast Mediterranean energy matters, especially against Turkey’s opposition to hydrocarbon exploration within Cyprus’ Exclusive Economic Zone (EEZ).

The pipeline plan also promises to break Russia’s dominance of gas supply to the EU.

 

 

Greek-Cypriot-Israeli energy summit highlights US interest

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Washington’s supportive interest in the energy partnership between Greece, Cyprus and Israel has grown, driven by the prospect of hydrocarbon exploration in the southeast Mediterranean region as well as the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy.

Highlighting this interest, an upcoming Athens energy summit, scheduled to take place on August 6 and 7, comes as a US initiative, energypress sources informed.

It will follow a meeting just days ago, at the East Med Gas Forum in Egypt, that brought together Greek energy minister Costis Hatzidakis with his Cypriot and Israeli peers, Giorgos Lakkotrypis and Yuval Steinitz, respectively. In addition, Greek Prime Minister Kyriakos Mitsotakis recently met with Cypriot leader Nicos Anastasiades.

US Assistant Secretary Francis Fannon, head of the Bureau of Energy Sources, will also take part in the Athens energy summit. Fannon is scheduled to meet with Hatzidakis, Greece’s energy minister, and the country’s deputy foreign minister Konstantinos Fragogiannis on the eve of the event.

The summit highlights the US-fostered partnership between Greece, Cyprus and Israel, united against escalating Turkish tension concerning offshore hydrocarbon exploration plans within Cyprus’ Exclusive Economic Zone (EEZ).

The event’s participants are also expected to discuss the East Med pipeline. An agreement between the three countries and Italy remains pending. Last spring, Italian Prime Minister Giuseppe Conte claimed he sees no benefits for Italy in the project, effectively bringing the country’s effort in the matter to a standstill.

Washington openly supports this natural gas pipeline as it promises to establish an alternative supply route to Europe that would restrict Moscow’s energy dominance on the continent, through Gazprom.

Sideline efforts are being made to alter Italy’s negative stance, sources informed. A message could be projected to Rome through the imminent Athens event.

Continuation of energy strategy minister’s guide at Cairo forum

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Recently appointed energy minister Costis Hatzidakis will formally commence work on promoting Greece’s international energy relations at his first meetings abroad, today and tomorrow, at the East Med Gas Forum in Cairo.

The minister, in recent speeches, has already made clear his interest in supporting a national strategy shaped to bolster the country’s energy security, elevate its geopolitical role and fuel economic growth.

Strategic partnerships with Cyprus, the USA, Israel and Egypt will play a pivotal role in this effort.

Greece, Cyprus, Egypt, Israel, Italy, Jordan and the Palestinian Authority will all be represented at the Cairo forum.

Hatzidakis, Greece’s energy minister, is also expected to discuss energy partnerships and regional security with US energy secretary Rick Perry, who is in the Egyptian capital as part of a tour of the east Mediterranean.

Development of the submarine East Med gas pipeline, a project promising security and stability for the wider region, is a leading priority  for Greece.

On a wider level, the minister can be expected to carry on supporting a national strategy pursued over the past decade to establish Greece as a pivotal energy player in the region and key problem solver of regional energy partnership issues.

As for other major energy infrastructure projects, the new Greek government will continue to provide national support for the swift completion of the Trans Adriatic Pipeline (TAP), planned to transport Caspian natural gas to Europe, and the Greek-Bulgarian IGB gas grid interconnector. Other investment plans such as the Alexandroupoli FSRU and the Kavala underground gas storage facility will also keep receiving the support of Greece’s administration.

DEPA awaiting Gazprom news for lower gas price, LNG a market hit

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Gas utility DEPA, which has asked for a lower natural gas supply price from Gazprom, can expect a response around June 15, the Russian gas giant has informed.

DEPA was driven to action by extremely low spot-market prices for LNG currently available in Europe.

Major European hubs, such as the TTF facility in the Netherlands, are currently offering prices of 10.928 euros per MWh, compared to Gazprom’s supply contract for the Balkans, including Greece, of approximately 20 euros per MWh.

It remains to be seen how DEPA will respond if the price-related news from Gazprom is not favorable.

LNG is projected to have captured roughly 55 percent of western European energy markets five years from now, up from approximately 40 percent last year, authorities told a recent forum in Brussels.

According to the World Energy Council, LNG will capture a 51 percent share of the global market by 2025, from 25 percent in 2000 and 45 percent in 2018, as a result of new production line investments in the USA, Qatar and Australia.

Lower LNG prices have coincided with an upgrade at the LNG terminal on Revythoussa, an islet just off Athens, resulting in its capacity increase to 220,000 cubic meters. This has enabled bigger incoming shipments.

So far this year, LNG shipments have arrived from Qatar and the USA. More are expected.

Meanwhile, DEPA’s domestic market share for LNG supply is on a downward trajectory and currently at around 30 percent as a result of intensifying competition.

Three-way summit to support ambitious East Med project

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The leaders of Greece, Cyprus and Israel are expected to unite for a joint statement in support of the East Med natural gas pipeline’s development as well as the reinforcement of regional energy security at a summit in Jerusalem this Wednesday, where they will be joined by US Secretary of State Mike Pompeo.

The anticipated declaration by Greek Prime Minister Alexis Tsipras and his respective Cypriot and Israeli counterparts, Nicos Anastasiades and Benjamin Netanhyahu, will represent yet another step towards the development of East Med, promising a transportation route for regional natural gas to  EU markets.

Pompeo’s presence at the forthcoming three-way summit, combined with ExxonMobil’s recently declared intention to take part in a new round of Israeli tenders offering licenses, make clear Washington’s determination for a leading role in the Mediterranean.

Discoveries of major natural gas fields in the region and plans for EU-bound transportation routes have increased US interest.

However, many obstacles still lie ahead for the East Med pipeline. These include Italy’s step back as a result of objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition. Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach.

Greece, Cyprus and Israel now appear to be examining alternative East Med routes towards Europe, the most favorable option being North Macedonia.

Though Egypt expressed support for East Med last week, Cairo plans to utilize the country’s LNG terminals with the aim of exporting gas in liquefied form. This infrastructure would have an advantage over East Med.

East Med’s commercial feasibility is another concern. Quantities and customers still need to be assured.

 

 

East Med pipeline prospects bolstered by Egyptian support

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Egypt’s constructive participation in talks for the development of the East Med natural gas pipeline, planned to carry Cypriot, Israeli and, possibly, Egyptian natural gas to the EU via Greece and Italy, has created favorable prospects for the realization of a project promising to play a pivotal role on the southeast Mediterranean energy map.

US support for the project and an effort by participating countries to ensure ExxonMobil’s involvement are also bolstering the East Med’s development prospects.

Last month, Egypt’s petroleum minister Tarek El-Molla had told Cyprus News Agency his country is not interested in participating in the East Med project with its Zohr natural gas deposit.

However, the Egyptian minister changed his tune yesterday at Ceraweek 2019, an international energy in Houston, Texas, noting Egypt will support the East Med project.

Quite clearly, Egypt is looking to establish yet another alternative supply route for its Zohr field, an enormous natural gas discovery, to major consumer markets of the west.

Prior to expressing support for East Med, El-Molla took part in a meeting with his Greek, Israeli and Cypriot counterparts – Giorgos Stathakis, Yuval Steinitz and Giorgos Lakkotrypis, respectively – and US energy under secretary Mark Menezes, at the Houston event.

All four officials confirmed their support for the East Med gas pipeline, according to a statement released by Greece’s energy ministry.

Stathakis, Greece’s energy minister, also held a separate meeting yesterday with ExxonMobil officials for talks on developments concerning the oil major’s hydrocarbon exploration interests at offshore blocks west and southwest of Crete – through a consortium established with Total and ELPE (Hellenic Petroleum) – and the East Med project, energypress sources informed.

 

Greek-Cypriot-Israeli deal for East Med pipeline likely this month

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A three-way agreement between Greece, Cyprus and Israel for the development of the East Med natural gas pipeline, planned to carry Cypriot and Israeli natural gas to the EU via Greece and Italy, appears increasingly likely to be signed by the leaders of the three countries at a Tel Aviv summit scheduled for March 20.

A draft of the planned agreement is currently being fine-tuned in Brussels.

Despite the emergence of a growing number of reports contending an agreement is near, objections expressed by Italy’s Five Star Movement, a member of the country’s far-right coalition, could turn into a problem for the East Med pipeline plan.

Italy’s environmental ministry has ordered a new environmental impact study for Italy’s Otranto seaside location, where East Med is planned to reach. Incidentally, the TAP project to carry gas from Azerbaijan to the EU is also planned to reach this spot. The Five Star Movement has also raised environmental concerns over this project.

Lebanon is another country in the region opposing East Med as a result of its ongoing EEZ dispute with Israel. Turkey, not on good terms with Israel and unsettled by the evolving Israeli-Cypriot cooperation, also opposes the project. Cyprus is continuing its hydrocarbon exploration activities, adding to Turkey’s concerns.

Meanwhile, Greek energy minister Giorgos Stathakis arrived in Houston, Texas yesterday to take part in Ceraweek 2019, an international energy conference running until Friday.

Stathakis is scheduled to take part in a panel discussion tomorrow on east Mediterranean developments following recent natural gas discoveries by Cyprus and Israel. His Cypriot, Israeli and Egyptian counterparts will also join this panel.

Sideline talks, by these officials, on regional energy matters are expected.

Ministry, DG Comp talks on PPC sale terms not over yet

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Negotiations between the energy ministry and the European Commission’s Directorate-General for Competition for an agreement on the revised terms of the main power utility PPC’s follow-up effort to sell lignite units will continue this week but are not expected to exceed it as a crucial Eurogroup meeting of eurozone finance ministers is scheduled for next Monday, March 11.

PPC’s lignite disinvestment is a pending bailout requirement. It is one of the key commitments for the release, by the country’s lenders, of a one-billion euro tranche.

Throughout the previous week, the talks between the energy ministry and the DG Comp were said to be nearing a deal. The fundamentals of the new sale’s revised terms, to feature improved conditions for investors following the initial effort’s failure, have been set but participation details concerning new entrants still need to be clarified, sources explained.

“The main objective of the two sides is to resolve whatever pending issues remain in a way that will maximize the sale’s chances of success this time around,” one source informed.

PPC is also making a committed effort for a successful follow-up sale. Last week, the utility’s chief executive Manolis Panagiotakis provided the European Commission with a letter listing a series of factors he sees as crucial to the disinvestment’s success.

Panagiotakis drew attention to an EU law limiting investment activity of non-EU investors, which he views as an obstacle for the sale. Russian, Chinese and American players of repute are interested in the PPC sale, according to the PPC boss, currently in Beijing for talks with Chinese firms.

DEPA-Cheniere LNG supply deal negotiations reach advanced stage

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Gas utility DEPA and US energy exporter Cheniere have reached an advanced stage in negotiations for a long-term LNG supply agreement that could result in a five-year deal, according to sources.

A 150,000-cubic meter spot-market purchase made by DEPA from the Texas-based company towards the end of last year kindled the current negotiations for a longer-term agreement between the two sides, energypress sources informed.

The US has made clear its interest to establish Greece as a gateway for American LNG into Balkan markets. The US Ambassador to Greece, Geoffrey R. Pyatt, has often made reference to the prospect.

A supply agreement between DEPA and Cheniere would further diversify the Greek gas utility’s sources, currently dominated by Russian natural gas and LNG from Algeria.

DEPA has reserved a one-billion cubic meter capacity through the TAP route as of 2020, when the new gas pipeline carrying natural gas from Azerbaijan is expected to begin operating. The prospect should enable DEPA to offer domestic-market customers more competitive prices and further penetrate Balkan markets, via the IGB Greek-Bulgarian pipeline, to connect with TAP.

The ongoing DEPA-Cheniere talks have not swept Algeria’s Sonatrach out of the picture, sources stressed. DEPA’s current supply agreement with Sonatrach expires in 2020 and the two sides are already discussing a renewal.

DEPA agreements with Cheniere and Sonatrach, combined with Azerbaijani gas supply through TAP, promise to place the Greek gas utility in a more favorable position opposite Russia’s Gazprom, its main supplier.

Strong US interest can be expected in local RES market, ambassador tells

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American investor interest can be expected to be strong for opportunities in Greece’s renewable energy market, the US Ambassador to Greece, Geoffrey R. Pyatt, has told an American-Hellenic Chamber of Commerce event, at its Thessaloniki branch, for the New Year.

Though the ambassador did not elaborate, he presumably had a number of companies in mind.

Tesla has already revealed its interest in the Greek market through a microgrid proposal for the country’s non-interconnected islands dubbed Powerpack. It is based on solar panels and large-capacity batteries. Tesla officials met with Greece’s energy minister Giorgos Stathakis early last month to discuss the issue.

Another highly-ranked US diplomat, speaking on the sidelines of the Thessaloniki event, informed that beyond Tesla, further American interest in Greece’s RES market should also be expected from a major Chicago-based company active in wind energy production and storage. An additional one or two US companies could also enter the picture, according to this diplomat.

Three major companies active in wind energy production and storage are based in Chicago. Acciona, one of the three, has operated two wind energy parks with a total installed capacity of 48.45 MW at the Panachaic mountain range in Greece’s northern Peloponnese since 2006.

Akuo Energy, a French-American venture operating 44 projects in various parts of Europe, is believed to have renewed its interest in Greece’s RES market following activity here in the past.

Invenergy, the third Chicago-based firm, has maintained an office in Athens but shown no signs of any local activity since 2007. Pyatt, the US Ambassador of Greece, recently mentioned visiting the Invenergy headquarters in Chicago last October.

Mytilineos orders American LNG, energy hub role seen

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The country’s second ever American LNG shipment, a 170,000-cubic meter order placed by Mytilineos that represents the first to be made by a private-sector company, is scheduled to dock at the Revythoussa islet terminal just off Athens on February 1.

A follow-up LNG order by a private-sector company would soon be made, a highly-ranked US diplomat told local media yesterday, adding the emergence of US gas in the wider region via Greece and the Revythoussa terminal carries a significant geostrategic dimension.

The arrival of American gas here reflects Washington’s vision of Greece as a prospective energy hub, the official noted, underlining the energy sector was a key matter in bilateral talks between the two countries last month.

The Mytilineos group has played a key role in ensuring the Greek grid’s sufficiency from early January, when temperatures around the country began dropping, until today, the scheduled arrival date of a new DEPA gas utility order from Algeria.

Over the past fortnight, crucial energy injections by the Mytilineos group into the Greek system have helped cover record-breaking levels of electricity demand.

The DEPA and Mytilineos LNG orders represent a change of dynamics in Greece and constitute a market reality, the US diplomat asserted.

 

 

Three-way East Med gas pipeline deal reached, US keen

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The leaders of Greece, Cyprus and Israel have reached an agreement to develop the East Med natural gas pipeline, planned to carry enormous southeast Mediterranean natural gas deposits to the EU via Greece. They met today at the Israeli city Beersheba for a fifth summit on the issue.

The project’s development plan still needs to be endorsed by the European Commission before a final agreement is signed by the three countries. This is expected in the the first quarter of 2019.

The European Commission has already received the project’s details and is expected to offer its approval early in 2019.

Greece’s Prime Minister Alexis Tsipras, joined by energy minister Giorgos Stathakis for the Israel trip, and the respective leaders of Cyprus and Israel, Nicos Anastasiades and Benjamin Netanyahu, are scheduled to sign related memorandums later in the day.

In the lead-up to today’s session, diplomats had described the meeting as one of the last pre-construction steps for the East Med project.

A disputed electricity grid interconnection project involving the three countries has not been included on today’s agenda. Greek authorities awarded Ariadne Interconnector, an SPV established by Greek power grid operator IPTO, control of the Greek-Cypriot-Israeli project’s Crete-Athens segment, despite European Commission objections.

Brussels favors Euroasia Interconnector, a consortium of Cypriot interests heading the wider Greek-Cypriot-Israeli project, for control of its Crete-Athens segment.

The East Med natural gas pipeline, whose cost has been estimated at 7 billion dollars, promises to be the world’s biggest submarine pipeline – in terms of length and depth.

The US has showed increased support for the project in recent times. US involvement in the project has not been excluded.

An annual gas transmission objective of 20 bcm has been set for East Med. EU natural gas needs have been forecast to reach 100 bcm in 2030.