Natural gas demand sees dynamic growth as the worldwide gas market continues to expand, despite the economic uncertainty in 2012. Greece has increasing power needs owing to its tourism industry that is spread out over many islands. Hence, domestic but also industrial users need to be supplied by liquefied natural gas imports and in many cases new power generation projects are in need of these supplies through LNG import terminals. This trend is expected to continue as natural gas becomes the fuel of choice for electric power providers and as developing countries increase their energy demands.

A LNG import or receiving terminal receives liquefied natural gas from LNG ships, stores the liquid in special storage tanks, vaporizes the LNG and then delivers the natural gas into a distribution pipeline. The receiving terminal is one component of the LNG chain between the gas field/reservoir and the residential or industrial customer. In Greece the primary distribution pipeline is called NGTS which stands for National Gas Transmission System and spans from the northeast of the country at the national borders with Turkey, crosses the prefectures of Macedonia and follows a southern route which ends in the Attica prefecture.

In harmony with the approved mid-term development strategy of the NGTS and with a view to the major international gas infrastructure projects in South-East Europe, such as the “South Stream”, a project is planned to start in the town of Alexandroupolis in the northeast part of the country in 2015. The project will comprise of an offshore floating LNG regasification terminal unit delivering gas onshore through a system of pipelines, both subsea and onshore. Natural gas will be fed into the Greek National transmission system and to the Greek gas market and will also have the ability to link and feed into the future South Corridor Gas Projects, such as the ITGI and access the Western European Markets.

The terminal will be constructed 22 kilometers southwest of the industrial area of Alexandroupolis and 10 km from shore and its initial LNG storage capacity will be at least 135,000 cubic meters. Following a ship’s berthing and cooling-down of the unloading arms, the natural gas, in liquid form, can be transferred to the onshore LNG tanks by the ship pumps. The liquid unloading rate from a ship is typically 10-12,000 cubic meters per hour and it takes approximately 10 to 12 hours to unload one medium sized vessel. It is expected that initial annual send-out will be about 2.6 billion cubic meters of expanded gas.

This Independent Natural Gas System of Alexandroupolis will be developed and operated by a Greek company called GASTRADE, which has received the license from the Greek Energy Regulator (RAE) and from the Ministry of Environment, Energy and Climate Change last August 2011. The total amount of investment will result to about €300 million including the cost of financing the construction. The project will be financed by 31% with own capital, by 40% loans and by 29% with subsidy.

With regards to the natural gas supply countries and according to the latest developments, there is a possibility that the ITGI pipeline (Interconnector Turkey-Greece-Italy) may be preferred over other projects to transfer the natural gas from Azerbaijan to Europe in 2014, somehow earlier than Gazprom’s South Stream, but subject to considerations of infrastructure downtime. However, owing to fierce competition between the various pipeline partnerships, projects such as that of “Nabuco West” and of TAP (Trans-Adriatic) still remain candidates for the Azeri natural gas. It is expected that if the TAP pipeline signs the contract with the consortium, Russia will no longer be the dominant player in the natural gas market of Europe, forcing prices down.

Notwithstanding the aforementioned current complexities of the pipelines network and with reference to the Greek terminal project, the mother company of GASTRADE, which belongs to the Copelouzos Group, has acquired all the 1,200 hectares of the industrial area of Alexandroupolis, where it intends to built two identical electric power generation plants of natural gas of about 400 MW each. One of which has already acquired the relevant permission. The electricity produced by the power plants will no doubt be fed into the daily Greek market, however the goal is to also feed into the Turkish market where currently there is a strong demand and this is considered to create further opportunities.

By Xenofon Varias,
AUEB Energy & Sustainability Club
Executive Member