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    A Changing European Gas Market is Discussed in Greece

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Summary

International participants in the Athens Energy Forum relay their plans for the major Southern gas Corridor planned projects and the challenges ahead.

by: Ioannis Michaletos

Posted in:

Natural Gas & LNG News, News By Country, , Greece, , Trans-Adriatic Pipeline (TAP) , Top Stories, East Med Focus

A Changing European Gas Market is Discussed in Greece

The Athens Energy Forum 2014 was characterized by an abundance of information and discussions on the rapid changes relating to the European natural gas sector, amidst political antagonisms, corporate projects and the effects of the global economy.

The Trans- Adriatic Pipeline (TAP) was amongst the main features of the forum, as it is the only project in motion right now between Greece, Albania and Italy in terms of securing the Southern Corridor route towards EU markets. TAP CEO Kjetil Tungland relayed certain details of the unfolding project that is scheduled to sign 15 major contracts with companies for its construction and is estimated to be completed in less than six years. The pipeline consortium is in contact with the Greek authorities to invite local subcontractors to take part, in order to diffuse accusations by the Greek media that Greek entities have already been banned from taking part in construction due to alleged technical standards that barred them from competing.

According to Tungland the beginning of the construction process should commence in early 2016 and the pipeline should be operational by early 2020. This however depends on the Shah Deniz consortium's operations  timetable, since TAP will be the last link of the chain of transfer of Azeri gas into the European markets. Tungland stated that he is confident of the continuation of the backing by the Greek government for the project which played a key role for the selection by the Shah Deniz partners. Furthermore, a consultation is underway between TAP and local Greek communities and already 40 changes have been implemented based on recommendations by local stakeholders.

An issue that has to be resolved is the negative stance by some Greek municipalities regarding the final route of TAP, which will be mostly in the Kavala area in Greece and in the San Foca region in Italy. For that purpose TAP is considering changes with an alternate bypass. Five alternative routes are to be decided upon.

Panayiotis Michalos, the Greek Ministry's General Secretary of International Economic Relations, provided the view that a South-North energy corridor could be a feasible task in order to connect Greece to Central Europe through a series of interconnectors to facilitate an alternate gas flow. This corridor could be filled with projects such as TAP and the proposed East Med pipeline, from increased LNG shipments to the Revythousa terminal and Michalos highlighted the importance of the Interconnector Greece-Bulgaria that will be operational by late 2016. Lastly a floating LNG terminal project in Northern Greece will further enchase the chances of a meaningful transfer of gas from Greece to countries such as Hungary and Croatia.

Greek Foreign Minister Evangelos Venizelos stated at the energy forum the need to establish a common stance by the EU regarding the pricing of gas imports and the present Greek Presidency of the EU is willing to take the matter shortly to the Council of general affairs of the Union for matters of energy policy. Moreover Venizelos mentioned that as far as South Stream project is concerned the Commission takes an "a la carte" stance for projects from third countries and that Commissioner Oettinger should have thoroughly consulted all member states and especially the ones in the South. Venizelos fully supports the TAP pipeline and highlighted the importance of the Ionian - Adriatic Pipeline (IAP) as a route for the supply of Western Balkans.

The member of the European Parliament Niki Tzavela pointed out that the crisis in Ukraine puts forward the energy security theme in the EU and in that Greece could play a decisive role. That can be achieved through the creation of a regional hub, especially in Thessalonik. In that respect, TAP plays a decisive role passing through mid to its destinations between Turkey and Italy. The establishment of a commercial hub in Thessaloniki will be coupled with virtual pricing points in Istanbul and Sofia that will be monitoring the flow of gas from Azerbaijan, Russia and LNG sources to reduce prices and enable the regional market o have more liquidity. Also Tzavela placed importance for a future East Med. pipeline that is needed for gas imports diversification of the EU and that could be a complimentary South-East gas corridor to the main one been built from Azerbaijan to Italy.

Overall, the main subjects touched upon were the establishment of the Southern Corridor and the possible linkage of the newly discovered Eastern Mediterranean gas reserves with the rest of the EU market. Nevertheless it should be noted that even if both projects go as planned and operate within the maximum of their designed capabilities regarding gas imports to the EU, their total addition to the EU markets will not exceed 18 bcm per annum (10 bcm for TAP and 8 bcm for East Med). That represents the approximate equivalent of less than 3% of EU's plus Turkish and Ukrainian annual consumption, barely changing the present-day situation in the market.