Security of Gas Supply in South Eastern Europe Potential Contribution of Planned Pipelines, LNG, and Storage
Total Page：16
File Type：pdf, Size：1020Kb
Security of Gas Supply in South Eastern Europe Potential Contribution of Planned Pipelines, LNG, and Storage Anastasios Giamouridis and Spiros Paleoyannis NG 52 July 2011 i The contents of this paper are the authors’ sole responsibility. They do not necessarily represent the views of the Oxford Institute for Energy Studies or any of its members. Copyright © 2011 Oxford Institute for Energy Studies (Registered Charity, No. 286084) This publication may be reproduced in part for educational or non-profit purposes without special permission from the copyright holder, provided acknowledgment of the source is made. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from the Oxford Institute for Energy Studies. ISBN 978-1-907555-28-2 ii Preface Despite the considerable debate on European gas security which followed the Russia-Ukraine crisis of January 2009, the only significant impact – in terms of consumers which actually lost their gas, power or heat supply – was in a relatively limited number of countries in South Eastern Europe. This was the principal motivation for asking Anastasios Giamouridis and Spiros Paleoyannis to carry out this study on security of supply of the countries that were most impacted by the events of January 2009, and measures which could be taken to ensure that, in the event of another interruption of gas supplies, the South East European region would be able to cope significantly better. The countries under consideration in this study account for only a few percentage points of European gas demand, but this is outweighed by the importance of ensuring that their future gas supplies can be assured through a mix of diversified pipeline and LNG supplies, pipeline interconnections, gas storage and efficiency measures. There is a strong energy – not to speak of a political and humanitarian – imperative to ensure that, in the event of similar supply problems, the citizens of these countries find themselves in a much better position than was the case in 2009. One of the difficulties of writing about this subject in the wake of the European recession of 2008-09 is that a combination of reduced energy demand and financial crisis has rendered future gas and energy demand prospects, as well as financial capacity to support large scale capital investments, particularly uncertain for many countries in this region. However, the small scale demand of these countries also provides them with opportunities to consider similar sized supply diversification and demand management solutions. While multi-billion Euro pipelines bringing 10-30 Bcm/year of Caspian gas to and through the region have tended to grab the headlines, smaller scale solutions such as interconnectors (with reverse flow), floating LNG regasification facilities, and additional storage – which could be shared between a number of countries – could provide more immediate and affordable solutions. In this region a facility which can deliver (the daily equivalent of) 500 million cubic metres of gas/year on a flexible basis can make a major difference to countries with modest annual demand. I am very grateful to Tassos and Spiros for the time and effort they have put into this very substantial study despite their busy full time jobs. The study is a major contribution to the Gas Programme’s work on south east Europe and greatly illuminates the future gas options facing this complex region. Jonathan Stern Oxford, July 2011 iii About the Authors Anastasios Giamouridis is a Senior Visiting Research Fellow at the Natural Gas Programme of the Oxford Institute for Energy Studies, and an Associate at the Supply Division of DEPA SA in Athens. Prior to joining DEPA, he was a Lead Consultant at PFC Energy working out of their Paris office and focusing on the midstream and downstream oil & gas markets of South Eastern Europe and Turkey. Previously, he worked as a Researcher to Nia Griffith MP at the UK House of Commons in London, and interned with the Inter-Parliamentary Assembly of the Western European Union in Paris, France. He has served as a Second Lieutenant (Infantry) in the Hellenic Army. Anastasios has published articles in a number of peer-reviewed academic publications, including in the European Foreign Affairs Review; in the Journal of Modern Greek Studies; and in Evaluation & Research in Education. He holds an MSc with Merit from the London School of Economics and Political Science (LSE), UK; an MA with Distinction from Durham University, UK; and a BA from Ioannina University, Greece. Spiros Paleoyannis is the Deputy CEO and Vice-Chairman of DEPA SA, which he joined in 1988. Between 2005 and 2009 he served as senior executive and high level advisor to its Chairman & CEO, while before that he held the positions of General Director of the Gas Trading Division (1997-2004); of Managing Director (1996); of General Manager (1993- 1996); and of Head of Strategic Planning and Development (1991-1993). Between 2003 and 2009 he also served as Deputy Chairman at the Institute of Energy for South East Europe (IENE), and he has also been a member of the BoD of the Public Petroleum Corporation of Greece (now Hellenic Petroleum); a General Manager at Asprofos Engineering; and a senior executive in a number of other public and private companies in Greece. Spiros Paleoyannis has an academic background in chemistry and also holds an MBA with focus on strategic management. He is the President of the ICBS-Kingston University Alumni Group in Greece, as well as a member of the Advisory Board at the Faculty of Business & Law of Kingston University. iv Table of Contents Acknowledgments ................................................................................................................................ ix Research Focus and Rationale ............................................................................................................. 1 Energy security as a government priority in South Eastern Europe ............................................... 9 Perception of energy security and dash for gas in SEE ...................................................................... 9 Country responses and regional gas prospects ............................................................................... 13 Conclusions ....................................................................................................................................... 43 Interconnectors as major contributors to gas supply security ........................................................ 45 European and regional context ......................................................................................................... 45 International gas pipelines affecting SEE ......................................................................................... 52 Country focus on gas pipeline projects ............................................................................................ 61 Conclusions: key projects for regional security of supply ................................................................ 84 Supply security dimension of Liquefied Natural Gas ...................................................................... 87 Country focus on LNG projects ....................................................................................................... 87 Conclusions: the value of LNG flexibility for regional security of supply ........................................ 98 Upgrading gas storage capacities..................................................................................................... 100 Global and regional context ........................................................................................................... 100 Country focus on Underground Gas Storage (UGS) projects ........................................................ 102 Conclusions: potential impact of UGS on regional supply security ............................................... 115 The role of credit and pricing in SEE supply security ................................................................... 119 Conclusions ........................................................................................................................................ 122 v Appendix ............................................................................................................................................ 126 Investment details of planned SEE regasification ........................................................................... 126 Availability of credit and business case certainty ........................................................................... 137 Impact of pricing on gas supply security ........................................................................................ 143 Glossary ............................................................................................................................................. 171 Bibliography ...................................................................................................................................... 178 vi Maps Map 1: Natural gas flows into the European Union – normal winter day ................................. 3 Map 2: Natural gas flows into the European Union – first day of crisis ................................... 4 Map 3: European Union response to the gas supply crisis of January 2009 .............................. 5 Map 4: Current and planned gas infrastructure in Bosnia & Herzegovina .............................