Greece + LNG Transport: Kostis Moussouroulis, Greek Minister of Shipping
Natural Gas Europe was pleased to interview the Greek Minister of Shipping, Maritime Affairs & the Aegean, Kostis Moussouroulis, and discuss significant developments in the global LNG trade, the importance of the merchant maritime sector for the global energy industry, as well as initiatives in the sector by Greece and the EU.
“Despite the world economic crisis, the need for transporting energy products (crude oil, petroleum products and gas) remained relatively steady during the last years.”
Greek ship-owners are becoming significant players in the global LNG trade by building almost 50% of new vessels over the past few years. How can the Greek state accommodate and support that booming industry?
There are historical links between energy and shipping, as long as shipping is both a consumer and transporter of energy products, in the latter sense being also the forerunner of all other means of energy transportation. Greek ship-owners are over the years world leaders in innovative investments, it is therefore no surprise that the particular LNG sector would attract their interest from the outset.
The statistical facts show that in 2013 Greek businesses control 9.1% of the world total LNG shipping capacity, compared to 7.4% the year before. In terms of number of ships, this translates into 140 Greek-controlled LNG carriers, against 1512 ships in the world fleet of this particular type. The most notable increase in terms of ship type compared to the previous year 2012 is also registered in LNG tankers (+18) and in Chemical and Product tankers (+5).
Of particular relevance in terms of competitive operation is considered to be that the first large tanker carrying LNG to sail across the Arctic has been a Greek owned one. It left Norway and sailed north of Russia on its way to Japan, where it arrived in early December 2012, saving 20 days off the journey.
The Greek maritime administration steadily supports the shipping industry in a multi-level manner and this particular shipping activity is no exception to the rule. We have over the years established a favorable environment for the shipping industry which provides the necessary framework for investment flows. We have re-established a dedicated Ministry for Shipping and Maritime Affairs. In terms of shipping policy we are actively pursuing a global legal and political environment for international shipping, with rules of universal application through the International Maritime Organization.
As indicated above “Arctic Shipping” is currently one of the most important topics for international shipping. I had the opportunity to discuss this issue with Ministers from major shipping nations and the ICS in the beginning of June in Oslo. In our view, the opportunities for more efficient shipping services through the Arctic are huge, on condition the international community succeeds in developing a coherent and non-discriminatory strategy, concluding in a clear legal framework with regard to polar shipping through the IMO, in order to be applied and enforced at international level. It is moreover important that any requirements for polar shipping, adopted under the International Polar Code or other IMO instruments, shall take account all relevant aspects, such as the type of ship operation and season of operation, while ensuring protection of the vulnerable Arctic environment, while giving due regard to the essential principles of international law. In this respect a stable and coherent environment in terms of shipping policy is considered to be of particular relevance.
Greece consumes annually rather small amounts of gas, around 5 billion cubic meters. On the other hand, its geo-economic placement right beside the major gas producing countries and the pipeline projects to be built such as the Southern Corridor route, may actually be of advantage into expanding the LNG infrastructure of the country. What is your take on that and from where could potential investments come from?
As I happen to know as former Secretary General for energy, the country's key LNG infrastructure is the LNG terminal in Revythoussa, owned by the National Natural Gas System Operator (DESFA) S.A. This is a very important infrastructure for the national gas transmission system, providing another supply point further to the pipelines in the North and East. At the moment, a project for the expansion of Revythoussa's capacity is underway, to be co-financed by structural funds of the EU (NSRF 2007-2013). Moreover, PPC was also exploring LNG terminal options and other private interest for gas storage infrastructure has also been expressed, with applications to the Energy Regulator, so I think, in combination, there is potential for significant development.
How important is the LNG industry for the current Greek Administration and how can you describe your cooperation with the EU in that sector, since Brussels has established plans for up to 30 LNG terminals across Europe over the coming 20 years?
Greece supports in principle the evolution of the LNG industry as well as the related policies that have been taken or have already announced at European Level. It needs to be noted that, while the use of LNG in shipping will help to reach environmental targets vis-à-vis the reduction of sulphur emissions, the use of LNG will have to be complemented in the long run by more energy efficient engines and vessels. In this respect, Greece attributes priority to the issue of the availability of marine fuels, as clearly indicated within the framework of the recently revised Sulphur Directive within the EU Council. In addition to that it should be underlined that suitable solutions are necessary in order to reduce compliance costs for the affected industries, allowing the implementation of alternative and more cost effective methods of compliance, such as LNG.
Within this context, the European Commission has recently announced a legislative proposal for a directive on the 'deployment of alternative fuels’ infrastructure', setting out requirements on establishing national policy frameworks for: (a) the market development of alternative fuels and (b) on a minimum infrastructure for alternative fuels.
Greece supports in principle the broadened use of LNG as an alternative form of fuel for shipping for achieving a reduction in oil consumption and Green House Gas emissions to maritime transport sector. However, a balanced allocation of costs and benefits of such policies is a basic parameter for the success of EU policies on alternative fuel for shipping. Also, the LNG fuel price vis-à-vis the price of oil should be closely examined. Having said that it must be highlighted that the necessary investments mainly with regard to port facilities, should take full advantage of available EU funding mechanisms.
In a nutshell, availability, cost and adequate facilities for LNG are important parameters to consider, in order to achieve a balanced level playing field and at the same time secure the competitiveness of the European fleet.
Can you comment on the present day collaboration between Greece, Cyprus and Israel in relation with the newly founded gas reserves in these countries? More specifically, how does Athens envisage that cooperation to proceed and which energy platform would be more suitable, if any, for the transportation of gas from offshore East Mediterranean towards the international markets?
Greece and Cyprus are both traditional maritime countries with common interests on shipping issues, mainly consisting in maintaining liberalized maritime service environment and open markets. In our frequent contacts with my Cypriot counterpart, we always stress our positive approach to fruitful cooperation on bilateral level, aiming at enhancing passenger and cargo transportation between our countries, including an extension to Israel. In the same vein, we have established an open communication channel on political and service level, including a Joint Maritime Working Group between the maritime authorities of the two countries, aiming at promoting dialogue, on a regular basis, exchanging views and shaping a broader framework for cooperation in maritime transport issues. At the same time, we are seeking opportunities provided by EU Projects within the next EU financial framework 2014-20 which may include projects relevant to port and energy infrastructures. In this context Israel is considered to be a strategic partner in the field of maritime transport. This consideration gains renewed focus under the expected commercial exploitation of gas reserves in East Mediterranean, in view of channeling it into international markets.
What is your estimation with regards to the Greek-owned shipping sector and its future regarding the global energy trade. What are the main trends ahead, as well as, the challenges and which according to your view are the future markets to where energy-related shipping companies are heading into?
Greek-owned shipping sector is the world leader in the transportation of energy products from the production up to consumption sites. In terms of number of ships, it currently controls 22.3% of the world fleet of oil tankers, 13.5% of chemical and product tankers and, as I mentioned, 9.1% of the LNG shipping capacity. This being said, Greek shipping contributes immensely to the world’s energy security, at affordable prices, thus to the world’s growth and prosperity.
Despite the world economic crisis, the need for transporting energy products (crude oil, petroleum products and gas) remained relatively steady during the last years. This is due to the fact that industrial production also remained relatively steady and world population kept its increasing trend. Of course, as a result of the cyclical nature of the shipping industry, freight rates are keeping low, due to the tonnage overcapacity and also to the big numbers of new buildings entering the market during the “golden decade” of 2000’s.
In such challenging times, the Greek owned fleet, with the continuous support from the Greek government, managed to keep its global share. Gradually the freight and shipping markets are stabilizing, new building orders follow a very rational path and demand for energy products also remains steady, Greece remains optimistic about energy-related markets and their effects to the world shipping industry.
In 2009, Kostis Moussouroulis was elected, for the first time, Member of the Hellenic Parliament for the Chios Prefecture with Nea Dimokratia party. He was re-elected in 2012 and assumed the position of the Minister of Shipping, Maritime Affairs and the Aegean. In 2010, he was elected Member of the Municipal Council of Chios. He has been Member of the Standing Committee for Production and Trade, while he was Responsible for the Regional Policy sector (2011–2012), as well as Parliamentary Representative for the Nea Dimokratia party.