Energy Crisis

Launch of works on Alexandroupolis LNG terminal in Greece

Prime ministers and presidents of Greece, Bulgaria, Serbia, and North Macedonia (photo: Aleksandar Vučić/Twitter)

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May 3, 2022

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Published:

May 3, 2022

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Works on Alexandroupolis LNG terminal, a significant project for the energy security of Southeastern Europe and the Balkans, were officially launched today in Alexandroupolis, Greece. The terminal is expected to be operational in December 2023.

Present at a ceremony in Alexandroupolis were the prime minister of Greece, Kyriakos Mitsotakis, Bulgaria’s prime minister, Kiril Petkov, Serbia’s president, Aleksandar Vučić, North Macedonia’s prime minister, Dimitar Kovačevski, representatives of the operating company Gastrade, ministers and parliamentarians, as well as Charles Michel, President of the European Council.

Greek Prime Minister Kyriakos Mitsotakis said during the ceremony:

“Within the next 20 months, Greece will be able to import much more LNG with increased liquifaction capacity. Moscow’s blackmail makes this regional cooperation not only essential, but also urgent. Greece has provided for its own energy adequacy and is now willing to help neighboring nations with their own needs.”

Bulgarian Prime Minister Kiril Petkov said:

“We can face the Russian attack and pressure together. We are independent countries. Russia’s pressure will not achieve its goal and today’s event is proof of that. This is an energy project that will change Europe’s energy map. Together we can become an engine for Europe, this project is proof of our power and unity.”

Serbian President Aleksandar Vučić said:

“Interconnectivity in natural gas is very important. I wish to thank the EU because most of these projects have European financing, such as the new interconnection to North Macedonia. Despite the difficulties and challenges in energy, I am confident we can surpass them through a common effort between the nations of the region and find the solutions.”

North Macedonian Prime Minister Dimitar Kovačevski said:

“Preparations for North Macedonia’s interconnection to other gas infrastructure in the region will provide natural gas to its citizens and the national economy. Lignite’s decommissioning and its replacement with natural gas is our strategic goal, while the differentiation of supply sources is crucial and the Southern Corridor contributes to our independence from Russian gas. Through these projects we will acquire more sources of gas, such as from the US and from the Middle East, which means increased security and lower cost.”

A way for the Balkans to acquire access to new gas sources

Alexandroupolis LNG
Photo: Gastrade

The Alexandroupolis FSRU is a floating LNG terminal that will provide 5.5 billion cubic meters (bcm) of natural gas annually when completed to the markets of Greece, Bulgaria, Serbia and North Macedonia.

The new infrastructure is tied to other interconnection projects, such as the Gas Interconnector Greece-Bulgaria (IGB) that will be operational from September 2022, but also the important gas links between Bulgaria, North Macedonia and Serbia. Through these recent and new projects, these countries will be able to reduce their dependence on Russian natural gas by diversifying their routes and sources of supply.

Russian gas giant Gazprom recently halted gas deliveries to Bulgaria, while EU member states discussed the issue of payments in rubles yesterday during an extraordinary meeting of the energy ministers, without yet reaching a common stance. Given that in May more payments to Gazprom are expected from other European states and companies, further supply disruptions or even stoppages are entirely possible.

At the same time, the EU has prepared its REPowerEU plan in order to reduce Russian gas imports by 155 bcm this year and fill European gas storage to 80% levels by November. Even without any disruptions, this is a difficult goal to achieve, therefore the importance of new import projects, like Alexandroupolis LNG, is evident.

Three more LNG terminals and one interconnection planned in Greece

Apart from the project in Alexandroupolis, another investment to import LNG is scheduled by Greek refiner, Motor Oil, in Corinth, called “Dioryga LNG”. The final investment decision is expected near the end of this year and the annual capacity is projected at 2.5 bcm.

At the same time, Elpedison has its own plan called Thessaloniki FSRU, which is expected to become operational in 2025 and will also use a floating platform. Gastrade has announced that it has received a permit from the regulator for its second FSRU, to be installed offshore Thrace.

When it comes to gas pipelines, Greek operator DESFA and North Macedonia’s NER JSC Skopje are planning a new interconnection with a capacity of 1.5 bcm per year and an option to increase it to 3 bcm. This investment is expected to reach EUR 110 million and will further enhance N. Macedonia’s ability to acquire gas from new international sources.

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