Page 4 - EurOil Week 42 2022

EurOil COMMENTARY EurOil

Albania’s gas master plan

Albania is eager to embrace gas as a reliable supply source amid hydroelectric intermittency.

ALBANIA ALBANIA relies mostly on hydropower to gen- Energy is expected to deploy its FSRU Excel-
erate electricity – 94% of its mix – and to a much sior after the vessel finishes its current contract
WHAT: lesser extent on coal. This exposes the small off the coast of Israel at the end of this year and
Albania continues to impoverished Southeast European country to undergoes some modifications. Both the termi-
pursue plans to develop significant risks. In periods of drought, Alba- nal and the Vlore power station are anticipated
gas infrastructure nia must source its power needs from imports, to go online in the second quarter of next year.
despite soaring gas costs and this can prove incredibly costly, especially The agreement also covers the provision of
in Europe right now. as drought in Albania is often accompanied by two floating generators that will be positioned
drought in other countries in the Balkan region near the Narta power plant, providing Albania
WHY: where hydropower comprises a significant share with emergency power supply when the country
Albania relies heavily of the energy mix. needs it.
on hydroelectric power, Albania’s solution has been to pursue natu- Further expanding its LNG ambitions, Alba-
which causes problems ral gas. The country currently consumes barely nia had Albgaz sign an agreement with Excel-
during periods of any of the fuel, but it envisages using 2.4bn cubic erate and Italy’s Snam on looking at ways of
drought. metres per year of gas by the end of the decade. connecting the Vlore LNG terminal with other
But developing a gas sector will require substan- gas infrastructure in Albania. Snam in March
WHAT NEXT: tial investment in the necessary infrastructure. 2021 also agreed to study the development of
The projects in the Today, the country has a gas pipeline net- an underground gas storage facility in Albania’s
pipeline include an LNG work that extends close to 500 km, but this is a Dumre area with a capacity of 800mn cubic
import terminal and the relic from decades ago when the country had metres.
restoration of a power some significant domestic supply. Most of this Meanwhile, the Delvina Gas Company sub-
plant. network is now non-operational, and requires mitted an application in May to restore gas pro-
extensive repair. This said, the country hosts duction at existing wells at the Delvina block.
part of the Trans-Adriatic Pipeline (TAP) that Currently, what gas is produced in Albania is in
funnels gas from Azerbaijan to Greece and the south of the country, at the Divjaka and Fra-
Italy. kull fields, as well as some associated supply at
Albania has made some progress in realis- the Ballsh oilfield.
ing its gas ambitions recently. In July last year, Besides the gas development plan, Albania’s
its government and its national gas transmission government is also looking to expand domestic
system operator Albgaz signed a deal to build sources of renewable energy. There is a further
an interconnection point with TAP. Earlier 1.5 GW of hydroelectric capacity under devel-
that year, the government also signed a mem- opment, and a further 615 MW being consid-
orandum of understanding (MoU) on the con- ered, but these projects face a public backlash
struction of an LNG import terminal that will over environmental concerns. At the same
be linked via the Fier-Vlore pipeline to TAP. time, Albania has faced criticism for wanting
This would enable the country to use gas at the to expand gas use, as hydroelectric dams are a
98-MW Narta power plant in Vlore – a facility source of zero-carbon electricity. But this claim
that was completed many years ago to be capable fails to take into account the fact that Albania
of running on both gas and coal, but was never must resort to power imports when its hydro-
commissioned because of design flaws in its electric output falls too low, and much of that
cooling system. power comes from the coal-fired power gener-
Last year, a deal was struck with ExxonMobil ation that is dominant in the Balkans.
to build a liquefaction plant to provide the Vlore Beyond hydroelectric projects, Albania is also
power station with gas, once it has been reno- eager to tap its largely undeveloped solar and
vated. Spain’s Enagas is eyeing involvement in wind power potential. While estimates vary, it is
the project, signing a memorandum in June on considered that Albania could produce as much
potential stake ownership in Albgaz. as 2.4 GW of solar power and 4.2 GW of onshore
Albania has also successfully obtained a float- wind. Currently, though, the country only has
ing regasification and storage unit (FSRU) for the 22 MW of active solar power generation, and no
Vlore LNG terminal. US company Excelerate wind projects at all. ™

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