Bulgaria, Greece and SOCAR Team Up
The governments of Greece and Bulgaria seem to be forging stronger ties with Azerbaijan and its national gas champion, SOCAR, through mid and long term capabilities for its expansion in Southeast Europe.
More specifically, the finalization of the privatization of Greece's national transmission network company (DESFA) seems to be heading towards its final stages - an issue that has been ongoing since late 2013. The whole process, which included SOCAR buying 66% of shares for €400 million, was obstructed by the European Commissions's DG Competition, citing the provisions of the Third Energy Package. Nevertheless, during the Greek Prime Minister Antonis Samaras' last visit to Baku, Azeri authorities publicly claimed that assurances of the strictest provisions had been submitted to Brussels and it is a matter of a few weeks before DESFA is formally a part of the Azeri company.
It is of importance to note that the acquisition of the Greek corporation provides access to the Azeris both in interconnections with Bulgaria and IGB in particular, as well as to the domestic LNG terminal in Revythousa, coupled with the Trans-Adriatic Pipeline (TAP), which is scheduled to traverse Greece en route to Albania and Italy by late 2019.
Concurrently, Bulgaria recently signed two agreements with Azerbaijan that stipulate supplies by the latter via Greece from 2018 onwards. The Memorandums of Cooperation were signed by Bulgartransgaz and SOCAR and also include the upgrade of the country's underground gas storage facility in the vicinity of Chiren. The whole plan rests on the assurances that by 2016 the IGB pipeline will connect and be functional with reverse flow capacity Greece and Bulgaria, along with a new and similar infrastructure between Bulgaria and Turkey. In the meantime similar projects will connect Bulgaria with Romania and Serbia, thus enabling the Azeris to expand their customer base throughout most of the Balkans. Greek commercial gas company, DEPA, which is still under state control, also envisages the Aegean-Baltic interconnection route that will ship Azeri gas up to Poland by 2020 onwards. DEPA already has signed an agreement for a future imports of 1 bcm per year from SOCAR and is in the process to increase that amount, most likely for deliveries that will take place after TAP is established.
An important aspect to all the above that is closely related to the Athens-Sofia gas nexus, is the advance of the floating storage & regasification unit, currently being designed offshore Alexandroupoli by the Greek Copelouzos Group, aiming to supply with LNG the tri-border region of the aforementioned countries, plus Turkey and add to the boosting of energy security for the whole region. The budget is estimated at €350 million and it has already received the status of a Project of Common Interest by the EU, citing its strategic nature in that respect.
The company formed for that purpose is named GasTrade and aims to have by 2018 a 170,000cubic metre storage capacity of LNG that will be connected with DESFA's national system through a 17km underwater pipeline. Presently, talks are underway with prospective investors, thus pushing along the process to attract potential clients in a consumer base stretching from Greece to Hungary.
The owners of the company are also confident that the project may take a substantial amount of subsidies directly from the EU's structural funds since it is already a candidate for the allocation of EU capital to such works.
Lastly, it should be noted that the owners of the company own another entity named Prometheus Gas that has for years teamed with Gazprom and supplies a substantial amount of the gas flow yearly to Greece via the already established pipeline running from Bulgaria. It receives the necessary amounts from the gas network transiting Ukraine.
Link to source: http://www.naturalgaseurope.com/bulgaria-greece-socar
