US plan to supply Balkans with LNG spurring diplomatic activity

The flurry of recent and upcoming diplomatic activity between top-ranked Greek and US officials, energy matters being a key aspect, appears to be primarily driven by a plan for US supply of LNG to the wider Balkan region, sources have noted following last week’s official visit to Athens by Amos Hochstein, the US Special Envoy and Coordinator for International Energy Affairs.

Besides certain announcements released last week to point out pending issues concerning the TAP (Trans Adriatic Pipeline) project, to supply mostly Azeri natural gas to Europe, as well as the need for swifter progress on the prospective Greek-Bulgarian IGB pipeline, sources have now revealed LNG gas supply by the US to the Balkan region stands as a major US interest that was raised by Hochstein in Athens last week. Both Greek and regional gas needs could be partially covered by imports of LNG from the US.

The Revythoussa facility, combined with the access to be offered by the IGB pipeline and a new Bulgarian-Romanian interconnection, will allow the US to supply the wider eastern Balkan region. It is believed a Croatian LNG station being developed in Adria is the likeliest distribution point for US supply to the western Balkans.

If all these plans are developed, the Balkan region will acquire an alternative gas supply source, independent of Russia, long before the TAP project is completed. Other gas source alternatives are also expected to become available to the region over the next few years. Iran is preparing to resume international trade in anticipation of the end of western-imposed energy and financial sanctions early next year. Supply from the east Mediterranean is also likely to grow substantially following the discovery of the Zohr deposit in Egyptian waters, the region’s largest offshore field found to date.

The prospects offered by these developments are important for the Balkans. The region’s reliance on Russia’s Gazprom for gas has created problems both in terms of regional energy security and price levels.

US Deputy Assistant Secretary for Europe and Eurasia Daleep Singh will be in Athens this week. Then, Assistant Secretary of State for Europe and Eurasia Victoria Nuland, who was in Athens in June, returns next week to pave the way for an upcoming official visit by Secretary of State John Kerry. Greek Prime Minister Alexis Tsipras made an official trip to the US just weeks ago.