Natural Gas Views from Greece

The 18th Roundtable with the Government of Greece, organized by The Economist on July 9th and 10th in Athens, touched upon several interesting aspects with regards to how major stakeholders view ongoing events in the natural gas sphere.

First of all, the general director of the Russian National Energy Security Fund, Konstantin Simonov, relayed views on several important themes. According to his statements the recent privatization of  DESFA, the Greek national gas transmission company to Azeri SOCAR, is a violation of the EU's Third Energy Package, regarding the unbundling of producers, traders, transporters and network managers of natural gas. His view contradicts the EU stance and also issues of similar nature with Gazprom. It should be noted however that this particular privatization that was agreed upon in June 2013, has yet to receive the green light from Brussels, which means that the Russian argument has indeed reached the ears of the DG Energy, and as Simonov pointed out, the Russian side has in the recent past communicated with the EU authorities on the subject.

Furthermore, Simonov discussed South Stream and that it is a strategic project aiming at enchasing the energy security of the EU and cannot be seen as a tool for monopolizing the increasingly liberated and diversified market. Additionally, he predicted that due to the Ukrainian crisis, the winter period 2014-2015 will be a difficult one and accused Kiev of not negotiating and thoughts to "steal" transit gas quantities that are directed for the European consumers thus resulting eventually in a pan-European energy crisis. He noted that Moscow recently offered a $100 decrease on the existing price per 1,000 bcm of gas exported to Ukraine, but there was no interest and the dialogue was derailed.

Lastly, the head of the Fund stated that Europe without Russia in energy terms is in problematic situation and that the impeding energy union between Russia and China, including a prospective second gas link, is not the best outcome for European markets.

The head of DEPA, Spyros Palaiogiannis, mentioned the challenges that his company will face due to the liberalization and opening up of the domestic market. He outlined the counter-measures being implemented, so as to regain losses. Thid includes the expansion of the use of CNG, the construction of small-scale LNG projects in the maritime regions of the country, the increase of its commercial network and also added that price increases for household consumers are possible from 2015 onwards. Palaiogiannis also referred to the speech of Konstantin Simonov, by adding that Russia is not contributing positively to the dialogue with the EU by mentioning an impending gas crisis in the coming winter period.

Greece's deputy energy minister and the man in charge of the gas sector in the country, Makis Papageorgiou, presented a different tune to the forum, by explaining the strategic visions of the country that have regional ramifications. He provided a series of ongoing projects that aim at diversifying the local and Southeastern European markets, along with the solidification of energy security. Those include the Trans-Adriatic Pipeline (TAP), the Interconnector Greece-Bulgaria (IGB), and the upgrade of the Revythousa LNG terminal, and the prospective LNG or FSRU installation in Northern Greece. Also he paid attention to the gas discoveries in both Israel and Cyprus, which according to Papageorgiou could be coupled with the aforementioned to construct a grand gas export and transit base for the rest of Europe. He assured participants that the Greek plans have EU backing and have been included as Projects of Common Interest (PCI), while he expressed his concern on the ongoing destabilization in energy producing or transit countries such as Iraq Libya, and Ukraine.

The director in Greece of the TAP, Rikard Skoufias, focused on the prospects of the pipeline and characterized Greece as a strong player in the European energy scene, whilst assuring that in 2020 TAP will be a star - delivering the first gas quantities to Europe. He mentioned that the success of this project relies on the understanding by all those involved of its importance and in particular the local communities from where the pipeline is traversing that have been adequately informed and all their arguments and worries have been taken into account. Skoufias believes that there is a need to think big and establish a strategic gas route all the way from the Caspian region to Europe, in which TAP is an integral and vital part.

Greece's Prime Ministerial energy advisor, Nikos Lygeros, highlighted another important aspect of present day discourse of gas affairs in the country, and that is the recent initiative by the Greek state to proceed into hydrocarbon research in offshore locations in the Western and Southern parts. Already 20 sea blocks have been allocated and offered to investors and the program is to award the first licenses for drilling by mid-2015, while around 40 international companies have already expressed interest. Lygeros added emphatically that the role of Greece is crucial for the Southeast European region, not only as a transit territory, but also as one having great potential to become a producer country in due time.

Overall, the roundtable offered a wide range of views that were primarily based on the projects at hand, taking into account the linkage between Greece and the rest of its neighbours. Greek energy policy has been active for some time in establishing a leading role for the country in terms of becoming a strong point for the energy chain of Europe and quite obviously it has placed a strong role for natural gas in that respect.