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Greece becomes ‘most important hub for alternative gas’ in Southeast Europe

As the Trans-Adriatic Pipeline (TAP) became operational last month, a Greek official stated that his country had become the most important hub for gas from sources other than Russia in Southeastern Europe, also thanks to its LNG terminals.

Kostis Hatzidakis, Greece’s minister of environment and energy, hailed the start of TAP operations and said that through DEPA, the natural gas supply company of Greece, the country would start receiving gas from Azerbaijan by the end of the year.

“We look forward to the start of the delivery of commercial quantities of gas to the Greek market and specifically to DEPA under the existing gas supply contract from the Shah Deniz field until the end of the year,” Hatzidakis said.

He further argued that with this pipeline, in combination with other projects such as the Greek-Bulgarian natural gas pipeline IGB and the Liquefied Natural Gas terminal of Alexandroupolis, Greece becomes the most important transit hub for the transportation of alternative natural gas sources in Southeastern Europe.

Hatzidakis recalled that the choice of the Southern Corridor route through Greece and TAP was made by the Shah Deniz consortium in June 2013 under the government of New Democracy led by Prime Minister Antonis Samaras.

This statement can be interpreted as a compliment to his political party, but it should be noted that during the Samaras government, which was under pressure to sell state assets, two major Greek gas companies offered for sale were acquisition targets for Russia, which ultimately failed to buy them.

As cash-strapped Greece is selling many of its state assets, three Russian companies including Gazprom are bidding to acquire the Greek gas companies DEPA and DESFA, out of a total of 17 bidders from 12 countries.

 Greece then changed its geostrategic course under the leftist Syriza government of Alexis Tsipras, against the background of rapprochement between Russia, a traditional Orthodox friend of Athens, and its arch-foe Turkey. Both main political parties in Greece finally made the choice to play the US card, which pushes strongly for energy sources and infrastructure diversification, away from Russian interests.

Coveted by Russia, DESFA, the Hellenic Gas Transmission system operator, was ultimately sold to a European consortium, with the Greek state keeping a minority stake. DEPA, the main Greek public gas company, is now split in two (a commercial and an infrastructure company) and is under bid for sale within the next months.

“This is a historic moment for both the Greek and the regional energy market, as the National Gas System is interconnected with one of the largest gas markets in Europe, that of Italy, also connected to Northern Europe through Switzerland and of Germany, upgrading the role of the country in the regional energy landscape,” DESFA said as TAP was launched.

The company confirmed that the connection of the TAP pipeline with the Greek natural gas transmission system is completed, allowing the immediate supply and transfer of additional quantities of gas to the Greek market to meet the growing domestic demand.

But Greece banks on doubling the TAP capacity.

In 2021, a market test will be carried out to double the transport capacity of the TAP pipeline to 20 billion cubic meters per year. This was announced by the managing director of TAP pipeline, Luca Schieppati, at the Greek Economic Summit on 3 December.

The event hosted notable American speakers, with references to key issues that connect the two sides of the Atlantic.

Schieppati said that with the 10bcm of gas that TAP will initially carry, it can meet about a third of Bulgaria’s gas demand, as well as a quarter of Greek (1bcm) and about 12% of Italian gas demand (8bcm).

He stressed that TAP will also support market integration in Southeastern Europe through interconnections with key energy infrastructures, such as the IGB (Interconnector Greece Bulgaria) or the IAP (Ionian Adriatic Pipeline), while actively contributing to its global goal of reducing carbon emissions as well as allows the introduction of a cleaner energy source.