The Gastrade consortium confirmed on February 18 the long anticipated Liquified Natural Gas (LNG) terminal at Alexandroupolis in Greece’s province of Thrace has received its first cargo and is commencing commissioning runs prior to the imminent launch of full commercial operations. A GasLog LNG carrier, chartered by France’s TotalEnergies, delivered the commissioning cargo to the new facility from Sempra’s Cameron LNG plant in Louisiana.
Bad weather had delayed the vessel’s arrival from the original schedule of late January.
The core facility of the new LNG terminal is a Floating Storage and Regassification Unit (FSRU). Vessels of this type are extensively modified former LNG tankers that are then permanently moored offshore and connected to pumping stations/gas networks on the mainland via short undersea pipeline.
Project history and objectives
The former 153,500-cubic-meter LNG carrier GasLog Chelsea, built in 2010, is the first FSRU conversion project under the Greek flag for operation in the Aegean Sea, although not the first to operate in Greek waters, as the first LNG terminal was established at Revithoussa west of Athens back in 2000. The new conversion was appropriately renamed Alexandroupolis, and the 10-month conversion project was handled at the Seatrium shipyard in Singapore. It arrived in Alexandroupolis on December 17 and its mooring hook ups were reported to be completed on December 23.
The Gastrade consortium, which manages the project has five separate shareholders. They include Asimina-Eleni Copelouzou (founding shareholder), the Hellenic Natural Gas Transmission System Operator (DESFA), Public Gas Corporation of Greece (DEPA), GasLog Cyprus Investments and Bulgartransgaz EAD of Bulgaria.
Launched by Dimitris Copelouzos in 2010, most analysts believe the Alexandroupolis project has been vindicated by the geopolitical developments following Russia’s invasions of Ukraine in 2014 (Crimea) and 2022, and addresses the urgent need for Europe to reduce its dependence on Russian natural gas.
Of critical importance, the Alexandroupolis LNG terminal connects directly to the Trans Adriatic Pipeline (TAP) which transports Azerbaijani gas from the Turkish border, across all of Northern Greece and continues on to Italy via undersea link from Albania. The majority of the imported LNG is not currently planned for sale in Greece; it is estimated that 60-70 percent of the gas produced at the regasification unit will be exported through the new Interconnector Greece-Bulgaria (IGB) pipeline in reverse flow to Bulgaria, if not sent further.
In October 2023, the European Commission, under EU State aid rules, approved a 106-million-euro Greek initiative to support the completion of the construction of the Gastrade LNG terminal in Alexandroupolis.
The new geopolitics and the emerging Vertical Corridor
While the Alexandroupolis FSRU has been in the works for more than a decade, the Russian invasion of Ukraine triggered a number of geopolitical adjustments designed to boost European security in general as well as energy supply security, mostly to Moscow’s detriment.
What deserves special mention is the recent initiative for a so-called “Vertical Corridor” connecting Alexandroupolis with the existing Balkan pipeline network to Ukraine and Moldova, as well as onwards to Central Europe.
On January 19, a Memorandum of Understanding expanding the Vertical Corridor’s group of collaborating countries was signed during the Ministerial meeting of the High-Level Group on Central and South Eastern Europe Energy Connectivity (CESEC) in Athens, whereby Slovakia, Ukraine and Moldova joined the existing framework.
It is a safe assumption that the key elements of this Vertical Corridor would have eventually come together as a result of interest from regional energy distribution network operators, their respective energy ministers and private investors. But adding a political level to the project will help in a number of ways, beyond just giving ambassadors and foreign ministers more meetings and talking points. Their involvement will no doubt improve coordination, accelerate the processing for funding requests within EU bodies, and support the public narrative regarding European solidarity for Ukraine under Russian attack with fresh examples of concrete actions taken. Involvement of higher level diplomatic officials will also help sort out coordination problems going beyond energy networks but also involving regional transportation corridors, especially important as Alexandroupolis is steadily growing in importance as a port and regional transport hub.
U.S. views on the project’s progress
The U.S. has long been an enthusiastic supporter of the Alexandroupolis LNG terminal project. Accordingly, NE Global asked Assistant Secretary of State for Energy Resources Geoffrey Pyatt, who had previously served as US Ambassador to Greece, for his observations on the latest progress update.
In some detail, Pyatt noted “The successful opening of the Alexandroupolis FSRU is a milestone in the long-standing transatlantic effort to diversify European energy routes and suppliers, a goal made imperative after Putin’s weaponization of gas supplies. Alexandroupolis is also confirmation of the importance of interconnectors between countries in Southeast Europe, as LNG from Alexandroupolis can now not only reach Bulgaria through the IGB, but all the way to Moldova and Ukraine through promising regional initiatives like the Vertical Corridor. The fact that the test cargo contained U.S. LNG is further proof that America’s commitment to supply Europe’s gas needs as it fully breaks from Russian gas remains unwavering.”