Page 18 - GLNG Week 37

GLNG EUROPE GLNG

DESFA eyes role in Greek LNG terminal

INVESTMENT GREEK gas grid operator DESFA, majori- Belgium’s Fluxys to take a 66% interest in DESFA
ty-owned by a consortium led by Italy’s Snam, in 2018 in the latter’s privatisation sale. Snam
is reportedly eyeing a stake in an LNG import owns 60% of the consortium, while its partners
terminal in northern Greece. each have 20%.
DESFA is considering the purchase of a 30% The main owner of the project is Greek firm
interest in the group developing the Alexan- Copelouzos, which has a 40% position. Greek
droupolis LNG terminal, expected to start oper- gas supplier DEPA Commercial, Bermuda-reg-
ations by 2023, sources told Reuters last week. istered LNG vessel owner GasLog and Bulgarian
Neither the Greek company nor Snam have grid operator Bulgartransgaz have all bought
commented on the report. 20% stakes.
The floating storage and regasification unit The Alexandroupolis facility will be Greece’s
(FSRU) has been listed as an EU project of com- second LNG terminal. Its first, in Revithoussa,
mon interest (PCI), granting it access to bloc was launched in 2000 and can import up to 7
funding and regulatory support. It will cost bcm per year of gas. That terminal alone can
around €380mn ($448mn) to build and will more than cover Greek gas consumption, which
bring ashore up to 6bn cubic metres per year of totals around 4.7 bcm per year.
gas. It will have 170,000 cubic metres of storage Athens is therefore establishing new routes
capacity and will be tied to the Greek gas grid to distribute the gas it receives to neighbouring
through a 28-km pipeline. countries. One such project is the Interconnector
A final investment decision (FID) has not Greece Bulgaria (IGB), due to start pumping up
been taken on the project yet, although this mile- to 3 bcm per year of gas to Bulgaria starting in
stone is anticipated by the end of the year. 2020.
“It fits Snam’s plans to expand its LNG capac- Greece is also set to start receiving Azeri gas
ity beyond Italy,” one source told Reuters. later this year via the Trans-Adriatic Pipeline
Snam teamed up with Spain’s Enagas and (TAP). Snam also has a 20% position at TAP.™

European LNG imports falter

PERFORMANCE EUROPEAN LNG imports on a year-to-date underground storage sites currently at 93% of
basis in 2020 are now lower than they were in capacity.
the corresponding period of 2019, Russia’s Kom- As a result, year-to-date LNG supplies to
mersant reported on September 14, citing data Europe began to lag behind the corresponding
from LNG terminal operators. Europe received level in 2019 for the first time in September,
some 64.2bn cubic metres of regasified LNG Kommersant reported. However, shipments
between January 1 and September 12, the news- could pick up again as demand recovers with the
paper said, marking a 3.9% decline year on year. onset of winter. Suppliers will be encouraged by
The continent’s imports of super-cooled gas rising prices, with gas spot cargoes at the Dutch
reached an all-time record of 76mn tonnes, or 99 TTF hub selling for $135 per 1,000 cubic metres
bcm in regasified volumes in 2019. This growth in September 1-14, or 46% more than in August.
was driven by rising global LNG supply, low A recovery in LNG volumes will cause prob-
prices and weak spot demand in Asia. The trend lems for Russia’s Gazprom, Europe’s biggest gas
continued into the first months of 2020, espe- supplier. Gazprom had been banking on strong
cially after coronavirus (COVID-19) lockdowns sales in the fourth quarter to make up for sharp
were imposed in China in late January, causing declines earlier on in the year.
its gas imports to plunge. Gazprom currently expects to deliver 170
However, demand slumped across Europe bcm of gas to Europe in 2020, down from just
after it began introducing its own coronavirus under 200 bcm a year earlier. The company has
restrictions in March. US exporters also sharply been hit harder by the impact of the pandemic
reduced their output over the summer, as some on gas demand so far this year than its LNG
gas had nowhere to go. Liquefaction plants in the competitors, as the bulk of its supplies are sold
Gulf of Mexico area were also closed ahead of under contracts that are oil-indexed with a time
Hurricane Laura in late August. lag. But these contracts will begin to reflect the
Making matters worse, Europe is contending oil price collapse over March and April in the
with record high levels of gas in storage, with latter months of this year.™

P18 www. NEWSBASE .com Week 37 18•September•2020