Page 5 - GLNG Week 08

GLNG COMMENTARY GLNG
such as the East Med gas pipeline and a link with Bulgaria, will also be spun off but will remain in state hands.
Greece’s gas transmission grid DESFA is already under private control, after a two-thirds equity stake in the company was sold to a con- sortium of Italy’s Snam, Spain’s Enagas and Bel- gium’s Fluxys in late 2018. The group launched their own five-year investment plan worth an estimated $390mn.
Greece agreed to divest both DESFA and DEPA back in 2012, as part of a series of auster- ity and reform measures agreed with lenders. Both the sales proved difficult. The first priva- tisation tender held in 2013 attracted only one bid for DESFA from Azerbaijan’s SOCAR, and none for DEPA. Greece cut a deal with SOCAR on DESFA, which eventually fell through in 2016 after years of wrangling over transmission tariffs. The sale was only successful after Greece agreed to raise these tariffs.
Greece’s privatisation push is helping to bring in the investment needed for the country to establish itself as a crossroads for gas transport in Southeast Europe.
Import ambitions
Besides its 1,500-km gas network, DESFA also controls Greece’s only LNG import terminal in Revithoussa, launched in 2000 and capable of bringing ashore 7bn cubic metres of gas per year. The terminal alone can more than cover Greek consumption, which totals around 4.7 bcm per year, which is why Athens wants to establish new routes to distribute its gas to neighbouring countries. One such project is the Interconnector Greece Bulgaria (IGB), which will start pumping
up to 3 bcm per year of gas to Bulgaria starting in 2020.
Greece also receives Russian gas. And if its current options for imports were not enough, the country is due to start receiving gas from Azerbaijan later this year via the Southern Gas Corridor (SGC). It is also advancing a project to build a second LNG import terminal near Alexandroupolis.
The terminal, which will include a floating storage and regasification unit (FSRU), has a planned capacity of 5.5 bcm per year. Its oper- ator Gastrade, a subsidiary of private industrial holding Copelouzos, held a market test in late 2018, securing EoIs for as much as 12.2 bcm of annual capacity. The company has just extended the deadline for binding offers from February 24 to March 10. Once it has commitments from customers, Gastrade aims to take a final invest- ment decision (FID) in the third quarter of 2020 and launch the terminal two years later.
A less certain prospect is the EastMed gas pipeline, which would supply Greece with gas from the Levantine Basin off Israel. The project faces significant obstacles to its development – both commercial and political.
Greece’ efforts to increase gas links with its neighbours are logical, as they will help ensure full utilisation of its existing LNG import capac- ity, and earn it revenues from transiting Azeri gas. Whether its plans to expand gas imports are feasible is less clear-cut. The outlook for Euro- pean gas demand is bearish, suggesting that only limited extra import capacity is needed to meet future consumption. Greece may discover that its planned terminal in Alexandroupolis lacks a market.™
Greece’ efforts to increase gas links with its neighbours are logical, as they will help ensure full utilisation of its existing LNG import capacity.
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