Gam­ble to be­come an en­ergy hub

Financial Mirror (Cyprus) - - FRONT PAGE -

Once again Greece is back in the news. This time not for its never-end­ing stren­u­ous ne­go­ti­a­tions with the Euro­pean Com­mis­sion, the ECB and the IMF over the coun­try’s des­per­ate moves to clinch a deal and stay fi­nan­cially afloat and within the Eu­ro­zone, but for its bold open­ing to Rus­sia over her gov­ern­ment’s am­bi­tious plans to turn Greece into a re­gional en­ergy hub. Although Greece is a small en­ergy con­sumer on its own right, with oil use of some 287,000 bar­rels per day and gas not ex­ceed­ing 4.0 bil­lion cu­bic me­ters (BCMs) per year, its ge­o­graph­i­cal po­si­tion favours her be­com­ing a vi­tal cor­ri­dor for trans­port­ing gas from the East to the West. Where the East could be the Caspian re­gion, with its rich oil and gas re­sources, Iran, which has the world’s largest nat­u­ral gas re­serves, but also Rus­sia which al­ready cov­ers some 30-35% of Euro­pean gas needs.

Greece cur­rently ob­tains 65% of its gas sup­plies from Rus­sia with de­liv­er­ies first started in 1996 through the Trans­Balkan pipe­line which passes through Ukraine and de­liv­ers gas first to Ro­ma­nia, Bul­garia and then splits in two with one branch go­ing to Greece and the other to Turkey. Through an LNG ter­mi­nal in Revyt­houssa, an islet off Me­gara, near Athens, and the Greek-Turk­ish gas in­ter­con­nec­tor, which brings gas from Turkey, Greece ob­tains the rest of its gas quan­ti­ties. Fol­low­ing an agree­ment signed in 2013 be­tween Greece and an in­ter­na­tional con­sor­tium, the Tran­sa­dri­atic Gas Pipe­line (TAP), a new pipe­line will be built which will cross Greece and then move gas through Al­ba­nia and un­der­wa­ter through the Adri­atic to Italy and then to Europe. Con­struc­tion of this EUR 3 bln pipe­line is slated to start next year and will be com­pleted by the end of 2019 trans­port­ing some 10.0 BCM from Azer­bai­jan to Italy. Not a sig­nif­i­cant amount of gas given Euro­pean gas con­sump­tion, which reached al­most 500 BCMs in 2014. Nev­er­the­less, the TAP pipe­line is heav­ily pro­moted by the EU and the USA as Europe’s best al­ter­na­tive gas sup­ply route in its ef­forts to di­ver­sify its gas in­take and lessen its cus­tom­ary de­pen­dence on Rus­sian gas. How­ever, even if TAP dou­bles its ca­pac­ity to 20 BCM as lat­est plans sug­gest, it will still pro­vide in­suf­fi­cient quan­ti­ties to en­able it to play a key part in Euro­pean gas sup­ply.

Mean­while, Rus­sian state gas com­pany Gazprom is try­ing to de­velop an al­ter­na­tive route to trans­port sig­nif­i­cant gas vol­umes to Euro­pean com­pa­nies by by­pass­ing trou­ble­some Ukraine, where cur­rently four of its ex­port pipe­lines go through. As ear­lier ef­forts to de­velop the South Stream pipe­line, which would have taken Rus­sian gas via the Black Sea and then via Bul­garia, Ser­bia and Hun­gary to Aus­tria, was abruptly can­celled last De­cem­ber fol­low­ing in­tense pres­sure by the EU on Bul­garia to aban­don con­struc­tion of the project, and a host of legal ob­jec­tions which would have made it im­pos­si­ble for Gazprom to sell its gas to its Euro­pean cus­tomers through this par­tic­u­lar pipe­line. Hence, Gazprom has de­vel­oped an al­ter­na­tive route also un­der­wa­ter through the Black Sea, but this time land­ing on the Euro­pean shores of Turkey and from there through Greece to FYROM, Ser­bia and Europe. Last week dur­ing a visit to Moscow by Turkey’s En­ergy Min­is­ter, Taner Yildiz, and his meet­ing with Pres­i­dent Vladimir Putin, the plans for the con­struc­tion of this new pipe­line were fi­nalised with con­struc­tion of the pipe­line start­ing im­me­di­ately and the first phase, to be com­pleted by the end of 2016. This is a huge pipe­line with some 64 BCM car­ry­ing ca­pac­ity of which at least 16 BCM will be ab­sorbed by the fast grow­ing Turk­ish mar­ket.

In a highly con­tro­ver­sial visit to Moscow

last month

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