What will Europe look like in 2020 after the discovery of hydrocarbons in the Eastern Mediterranean? It must surely change, said John Roberts, energy security specialist, during the annual Mediterranean Oil and Gas Conference, held in Athens.
He stated that some of the importing countries will become exporters of natural gas and the picture will be completely different. Interconnections that will transfer the natural gas from one country to another will be crossing the whole continent. At the same time, the available infrastructure will be used as well. "Following the discovery of natural gas deposits in the coastal areas of Romania, the country will most probably begin exporting natural gas. There is already a gas pipeline connecting Russia to Europe, although it is not yet clear which way the connection with the southern part of the continent will go," he said.
The management body of the consortium operating the "Shah Deniz" field in Azerbaijan has not yet announced how it will carry the natural gas to Europe. "In all cases, a part of the overall amount will remain in the Balkans. Therefore, it is necessary to establish here flexible ways of transportation and markets," said the expert.
The conference also involved representatives of the Greek national gas distributing company DESFA, which is to be privatized by the end of the year. Nikos Katsis, the manager responsible for the corporate strategy and business planning, made a brief presentation, which clarified that the national natural gas company DEPA is currently holding all company shares. The Greek state is holding 65% of its shares and the remaining 35% belong to the Greek oil company ELPE.
"The potential investor is faced with two options - to make an offer for DEPA, including DESFA, or to make an offer only for DESFA." The investor interest regarding the main distributor of natural gas in Greece is significant. From the 17 companies that applied initially, the fund for state assets utilization has selected 14 firms.
"Our economic performance is very good. We record profits every year," said Nikos Katsis and described the inventory projects DESFA has been developing and is preparing to participate.
One of them is the establishment of a gas compression capacity of 15.4 megawatts near Thessaloniki, which will start operating very soon. "The gas pipeline Corinth - Megalopoli is almost ready. It will supply natural gas to a very large part of the Peloponnese. Branches to the southern peninsula are planned for construction at a later stage. The main pipeline will start operating this autumn." Similar is the pipeline project in Aliveri on the Euboea peninsula, which is designed to supply a large part of central Greece with natural gas. The fourth major DESFA project is the expansion of the plant for liquefied gas in Revithousa near Athens, where there are two tanks at present. Thanks to them, there were no gas supply interruptions in Greece when the supplies from Azerbaijan were interrupted in the middle of February.
"Our goal is to participate in other large-scale and feasible projects, including ITGI, South Stream Hellas, TAP and IGB. The main thing for us is to penetrate the Greek market, even if it means that we will limit our profits. Our proposal to reduce the price of natural gas by 16% is currently being considered, which is consistent with the financial crisis and will secure energy producers a decent profit under these conditions. We are ready to participate in all projects in Southeastern Europe along with the good and strategic investor that we are waiting for," he said in conclusion.
Analyst Dr. Theodoros Tsakiris said that the energy map of Europe is quite "obscure" because the winner in the race for the southern corridor is not yet known. "By mid-June, the "Shah Deniz" consortium will have to choose whether SIP or Nabucco will compete with TAP in order to distinguish the "project holder". My opinion is that the projects Nabucco Europe and Nabucco West can be merged together thus gaining advantage over SIP."
Greece’s position in this scheme is even less clear. So far, the SIP project has not provided any opportunity for Greek participation. "I think the South Stream project is not completely lost especially if Russia and Ukraine fail to agree, although it seems almost impossible."
In response to the recent information that the Russian company Gazprom is strongly interested in buying the Greek company DEPA, the expert pointed out that the Russians have to find a very strong Greek partner for this purpose. "Any aggressive buying can cause problems with the European Union," Tsakiris said.
Nikos Katsis from DESFA then said the company has been cooperating with all "players" and is trying to participate in all realistic projects, as he called them.
"We signed a contract for technical assistance with TAP in order to establish the connectivity of our networks. In parallel, we continue to work with ITGI, although the management of "Shah Deniz" rejected the project, because Italy believes that it will become clear in the coming months that its offer is the best for the region."
Nikos Katsis said that the company has been talking on equal terms with all the contenders for buying it. "We have already signed a contract with the Russian side and we had no problems with the European Commission, as happened in other European countries. This is due to the fact that we have explicitly stated that we will comply with European legislation. But for the time being, we do not know who will make the investment or what actions will be taken."