EU Sets Natural Gas as Priority in Greece and Beyond
The EU is gradually expanding its reach in trans-border natural gas projects, aiming to increase the use of this energy commodity, in view of its 2050 vision. In this light, Greece puts forward four regional projects, following a vote in the European Parliament on relevant legislation aiming for the diversification of gas imports into the Union.
The directive for the Trans-European energy networks were voted in Parliament with 539 'yes' versus 85 votes 'no' and 19 absent. This development is of crucial importance because the projects aim to create an energy market that will both integrate and move away from national protective markets, whilst also boosting considerable use of gas for its 500 million customers. Overall legislation calls upon the establishment of 12 energy corridors across the EU and it will soon become a Law to be implemented by all member states within the coming months.
The first project that was put forth by Greece is the Interconnector Bulgaria-Greece (IGB) that aims to be characterized as project of mutual interest by all EU states. The final investment decision for that will take place by mid-2013. A second project is the Interconnector Italy-Greece (IGI) that DEPA's managers have assured it "has the full backing of the Commission". Both of the aforementioned projects are working towards the multiplication of alternatives for the transfer of either Azeri gas into Europe or LNG shipments coming from third markets.
A third project that is also being pushed forward by DEPA so as to be characterized as a Project of mutual interest is a Floating Storage Regasification Unit (LNG-FSRU) in Northern Greece. The technical features call for a 5 bcm per year capacity aiming to fill both IGB and IGI so as to transfer gas to both Bulgaria and Italy through Greece. A fourth project being promoted for inclusion into wider EU legislation is the so-called East Med gas pipeline that in the mid-term aims to connect the newly found offshore Eastern Mediterranean gas reserves with Continental Europe through Greece-Balkans. A similar project named Transmed has been proposed by Cyprus with a similar scope. All information point out that these two propositions will merge into one business plan in due term. The capacity for such a pipeline will be around 10 bcm per annum and with a total length of 1,200 km.
All of the above plans can only be successful if after their submission, due in 2013, are selected by the Commission which evaluates all Pan-European regional projects after an analysis by its peripheral experts bodies composed by scientists and technocrats. Nevertheless, regarding the Mediterranean projects it remains to be seen if the EU is going to embrace them after all, since they should be backed by at least two national governments and there is lack of interest according to information from the Greek representatives in the Commission.
The important aspect is that the EU for the first time really pushes forward an ambitious planning to combine all available plans together and then select those that will offer the best chances for the creation of the single largest natural gas consumer base in the planet, until that is, China and India embrace the "Natural gas age" as well.
The Russian factor
The ongoing privatization of the Greek DEPA-DESFA, fiercely contested by the Russians, is an important aspect in that respect and it is of importance to note that the CEO of Gazprom paid yet another visit to Athens just 8 days from his first meeting with Greek Prime Minister, as reported previously by Natural Gas Europe. In his return he requested and recieved from the Greek government for a term posed in the privatization process to be changed, thus increasing the speculation that eventually Gazprom will be the likely winner.
Concurrently the crisis in Cyprus, which substantially hit Russian private interests on the Island, may well prove to be an exchange at hand between Berlin and Moscow with the former getting for first time in its history access to the East Mediterranean and the likely huge gas resources there, whilst the latter gains a foothold in the small but geo-economically favorable Greek market. It is of interest to note that leading state officials in Moscow had managed to shift their capital away from Cyprus, days before the EU decision as a Financial Times story revealed, which is an implication of a behind-the-scenes bargain between Brussels and Moscow in that issue.
This analysis has also been corroborated by Natural Gas Europe through a series of discussions with local energy stakeholders and foreign missions that openly talk around a "Major shift of the geo-energy game in the region" that has as a final aim to form a “system of systems” between Eurasian gas producers and European gas consumers. At the same time similar acts of the play are being prepared in the other side of the planet between the Siberian reserves and the East Asian fast rising gas consuming markets.
With the above considered, the decision in June on the route of the Southern Corridor attracts even greater attention along with Israel and Cyprus' natural gas sector development.
Regardless of the final outcome, the 21st century will mark the reign of natural gas in expense of oil that shaped previous century history and culture.