THE INTERCONNECTOR GREECE-ITALY IS BACK ON TRACK - BUT FOR HOW LONG?
At this stage, it's fair to say that the Interconnector Greece-Italy (ITGI) is an old project. First conceived around a decade ago, the pipeline project has at several points in its history been coupled with the foregone South Stream project as a likely spur towards Italy from Greece. Then the emergence of the Trans-Adriatic Pipeline (TAP), which opted for its own direct route to Italy via Albania, put a temporary end to ITGI plans. ITGI has since been revived, mainly due to the possible introduction of the Turkish Stream pipeline project.
The CEO of DEPA, Spyros Paleogiannis, remarked at the 20th national energy conference in Athens--organized by the IENE Institute--that Turkish Stream means it's game on for ITGI, a pipeline with a mature plan and studies already conducted for its viability. The main problem so far for this pipeline has been the lack of substantial sources of gas. That is an issue that could be solved via the introduction of the Turkish Stream, Paleogiannis noted.
DEPA has also drafted bold plans to link ITGI with future gas deliveries from Iran and from the East Med. project that aims to deliver Israeli and Cypriot gas reserves to Europe.
Concurrently, Greek media outlet Energy Press revealed that Gazprom's president, Alexey Miller, met with his counterpart from Italy's Edison, Bruno Lescoeur, to discuss possible routes to transfer Russian gas via the Balkans.
Despite that news, a well-placed source in the energy private gas sector in Athens informs Natural Gas Europe that the probability of sending Russian gas to Southern Italy, even if Turkish Stream is constructed, are slim. According to the source, the Russian political elite has placed heavy political capital on establishing the central Balkan route, also known as the Tesla pipeline, and it is economically not feasible to have another spur into Italy, unless Edison and other companies are willing to bind themselves into long-term contracting via this route.
Furthermore, while speaking at the same conference, Dimitris Mardas, the deputy Greek foreign minister added that Athens is fully backing TAP, but also East Med., IGB and Turkish Stream. According to Mardas, the country's aims are to diversify flows, ensure energy security, protect the consumer base, and establish a gas hub.
All the above projects have as a common denominator the willingness of the actual consumers, who are all situated in countries like Italy, to accept Greece's role as a transit route and as a pricing hub--a task that is not entirely practical judging by the current business and currency risk the country is facing, as well as purely geographical obstacles.
ITGI, in particular, rests its chances of success on the willingness of the Italian side to assume a long-term responsibility to import large Russian gas flows through it. That necessity is contrary to the fact that Italy's main consumer needs are centred on the north of the country where it is better served via the Austrian hub. The Tesla Pipeline route fits better around the Italian strategy and also the German one, despite Germany's recent commitment to the Nord Stream-2 extension.
Iranian gas flows through Greece will have to deal with a Turkish-Iranian agreement and many other issues of a global geopolitical nature. The East Med. project is at too early a stage for a decision to be made about whether it's a project worth investing heavily in. That's before the ability or willingness of Israel to export into Europe is determined.
That's why, for the moment, there's a definite commotion around the ITGI issue. It's a commotion that rest outside Athens' control--partly due to the Russian-Italian situation and partly because we're still waiting for Turkey to conclusively agree to the establishment of Turkish Stream.
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