EU antitrust chief approves Greek public support for Alexandroupolis LNG terminal

€ 166.7 million Greek support measure for the construction of a new liquid natural gas (LNG) terminal in Alexandroupolis, Greece, complies with EU state aid rules the bloc’s antitrust chief said, adding that the project will contribute to energy security and diversification. supply in Greece and, more generally, in the region of South-East Europe, without unduly distorting competition.

“The new Alexandroupolis LNG terminal will improve gas supply and infrastructure not only in Greece, but throughout the region of South East Europe,” said Margrethe Vestager, Executive Vice President of the European Commission in charge of competition policy. “This will contribute to the achievement of the EU’s objectives in terms of security and diversification of energy supply. The Greek support measure limits the aid to what is necessary to carry out the project and sufficient guarantees will be put in place to ensure that potential distortions of competition are minimized, ”she added.

Greece has notified the Commission of its intention to support the construction of a new LNG terminal at Alexandroupolis, consisting of a floating storage and regasification unit (FSRU) for the reception, storage and regasification of LNG (supplemented by permanent offshore installations, such as a mooring system and risers), as well as an underwater and onshore gas pipeline system that will connect the FSRU to the National Natural Gas System of Greece (NNGS).

According to the Commission, given its strategic importance for the diversification of natural gas supplies in the South-Eastern European region, the Alexandroupolis LNG terminal has been included in the lists of European projects of common interest in the energy sector, based on the EU TEN-E (Trans-European Energy Network) Rules since 2013.

The terminal is expected to improve security of supply not only for Greece, but also for Bulgaria and the entire South-Eastern European region, as it will be a potential new source of energy to power the interconnection between Greece and Bulgaria (IGB). In November 2018, the Commission approved public support for the IGB project, which is currently under construction, in line with EU state aid rules.

The Greek authorities have confirmed that the LNG terminal will be suitable for use for hydrogen and that the project will contribute to a cleaner energy mix through increased use of gas instead of coal.

The project will be financed by the Greek State through the European Structural and Investment Funds (ESI Funds), in particular funds directly controlled and managed by Greece under the 2014-2020 Development Partnership Agreement, the Commission said, adding that the support will take the form of a direct grant amounting to 166.7 million euros. The beneficiary of the aid is Gastrade SA, a company in which the Greek incumbent operator (DEPA) and the Bulgarian gas transmission system operator (Bulgartransgaz EAD) have a stake. Gastrade will be the promoter and operator of the new terminal.

The Commission assessed the measure against EU state aid rules, in particular against the 2014 guidelines on state aid for environmental protection and energy .

The Commission considered that the aid was appropriate and necessary, as the project would not be carried out without public support. In this context, the Commission has taken into account the inclusion of the project in the list of projects of common interest in the energy sector. In addition, in order to ensure that there is no overcompensation, the project promoter will be obliged to return to the State part of the income generated by the terminal, if these exceed a capped level set on the life of the project. In addition, the National Energy Regulator has put in place certain guarantees to prevent an increase in the market position of the largest gas operators involved in the project, such as a limitation on the share of LNG that can be reserved in the terminal by these players. .

This will ensure that the aid is proportionate and limited to the minimum necessary to trigger the investment and that potential distortions of competition and trade are minimized.

On this basis, the Commission concluded that the measure is in line with EU state aid rules, as it will enhance the security and diversification of energy supply, especially in the region of Europe. Southeast, without unduly distorting competition.

The new terminal’s Floating Regasification Storage Unit (FSRU) will be stationed approximately 17.6 kilometers from the town of Alexandroupolis in northern Greece, at a distance offshore of approximately 10 km from the northernmost shore. close. The FSRU will have an overall delivery capacity of 5.5 billion cubic meters / bcm per year. The underwater and onshore sections of the pipeline, 24 kilometers and 4 kilometers respectively, will carry gas from the floating unit to the Greek natural gas network. The pipeline connection point will be the Kipi-Komotini branch of the National Natural Gas System of Greece (NNGS), at a new entry point from which the natural gas from the floating unit will be transmitted to the NNGS.

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