Vertical Corridor

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

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

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

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

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

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

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

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

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

Vertical Corridor meeting to gather project participants

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

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

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

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

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

 

Vertical Corridor preliminary work progressing, new MoU to be signed

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DESFA, Greece’s natural gas grid operator, is expected to sign a new Memorandum of Understanding within the next few days with its counterpart operators in Bulgaria (Bulgartransgaz), Hungary (FGSZ) and Romania, (Transgaz) as well as ICGB, the consortium established to develop the prospective IGB (Greek-Bulgarian Interconnector) pipeline project. The new MoU’s aim will be to explore the possibility of interconnections beyond Bulgaria, with Romania and Hungary, a stretch that would represent a big part of the Vertical Corridor.

Activities to be carried out by authoriities as part of this process will include an examination of which projects need to be developed, as well as the technical requirements of interconnections and  compressor stations.

The anticipated MoU will come as the next step following a Joint Statement signed by the four operators and ICGB last September in Budapest, on the sidelines of a Central and South Eastern European Gas Connectivity (CESEC) meeting chaired by the European Commission.

For that statement, the signees declared an intention to bolster their efforts, at technical and regulatory levels, for the development of the Vertical Corridor, expected to be comprised of a network of short pipelines to transmit natural gas from Greece all the way to Ukraine, and vice versa. This project promises to increase the diversification of supply sources in the intermediate countries – Bulgaria, Romania and Hungary.

The IGB will carry Azerbaijaini natural gas stemming from the Shah Deniz 2 field and is expected to be linked with the TAP project, currently under construction and planned to cross northern Greece, Albania and the Adriatic Sea, all the way to southern Italy.

Construction of the IGB project is expected to begin in 2018 and completed early in 2020.

Authorities are scheduled to meet again in Sofia on July 10 and 11.

Vertical Corridor partners set for new agreement to be signed in Athens

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Bulgarian, Romanian and Hungarian gas grid operator representatives are soon expected to travel to Athens to sign a new agreement with their Greek counterpart for the Vertical Corridor, to run though the territories of all these countries.

Two months ago, the four gas grid operators along with ICGB, the consortium behind the prospective IGB (Greek-Bulgarian Interconnector) pipeline project, signed a joint declaration in Budapest to intensify efforts at technical and regulatory levels in order to further propel the Vertical Corridor’s prospects.

A Memorandum of Understanding was also signed by the gas grid operators of Greece, Bulgaria, Romania, Hungary as well as Ukraine. The representative operators – Greece’s DESFA, Bulgaria’s Bulgartransgaz, Romania’s Transgaz, Hungary’s FGSZ and Ukraine’s Uktransgaz – have now decided to take the next step and sign a MoU for the project’s construction.

Romania, whose existing gas network needs to be upgraded if it is to be incorporated into the Vertical Corridor, will use the MoU as support in its quest for related EU funds.

The Vertical Corridor will enable gas flow from the south to the north. Greece’s exisiting LNG terminal in Revythoussa, an islet just off Athens, could supply the Vertical Corridor. The Greek unit’s capacity will be boosted once revamp work there is completed. As a result, southeast European countries will be provided access to LNG.

The Vertical Corridor, to incorporate the IGB interconnector, will provide southeast Europe with access to Caspian gas that will be transmitted to the region through the TAP (Trans Adriatic Pipeline) project, now being developed.

Brussels, backing these projects, is keeping a close watch on developments.