The competitors in the race to give life to the 'Southern gas corridor,' the Turkey-Greece-Italy Interconnector ITGI in which DEPA is a shareholder,the Transadriatic pipeline TAP, Nabucco, as well as British Petroleum, have just lodged bids to obtain the 10 billion cubic meters per year which will be available from the offshore Shah Deniz II field in Azerbaijan [more].
Harry Sachinis was speaking to EurActiv's Senior Editor Georgi Gotev.
How important are for DEPA, the Greek national gas company, pipeline projects such as ITGI, the Turkey-Greece-Italy Interconnector, or TAP, the Trans Adriatic pipeline, also in the context of the difficult economic situation of your country?
The ITGI system is very important for DEPA. It will help Greece become a gas hub for Southern Europe, bringing new energy sources to the whole region through the IGB [Italy-Greece-Bulgaria]interconnector to Bulgaria, as early as 2013. Then the [offshore] Poseidon section, between Italy and Greece, will bring 10 bcm of Azeri gas from Shah Deniz II to Europe, just as soon as it becomes available.
It is also important for the EU which has declared ITGI as a Project of European Interest and has agreed to co-finance the project up to €145 million, through the European Energy Programme for Recovery framework.
For South Eastern Europe, the IGB interconnector offers immediate diversification. But the IGI Poseidon section of ITGI provides an additional energy security mechanism for South Eastern Europe because, in the event of a cut off of supplies from other sources, the flow can be reversed to take gas from North Africa, through Italy, into Bulgaria.
Most importantly, the ITGI offers the quickest way to open up the Southern Gas corridor, to diversify European energy supplies and therefore improve European energy security.
By the way, is DEPA to be privatised?
DEPA will be one of the first companies to be privatized and there is considerable interest in the company both within the EU and from parties in third countries. Obviously I cannot go into details but the reason for that is simple, out financials are exceptionally strong. Domestic gas demand grew 23% in the first half of 2011 and we estimate will even out at 20% for the full year as new gas-fired power stations come online.
No matter what happens, even a Greek default, could you confirm that business could proceed normally?
DEPA is a solid company with incredibly strong fundamentals so we believe business would continue to operate normally.
What are the advantages to ITGI compared to other projects from the Southern gas corridor? I notice that you refrained from mentioning TAP?
The ITGI system will be able to open up the Southern Gas Corridor as early as 2013, by piping Azeri gas to South Eastern Europe, through the IGB interconnector to Bulgaria.
Through the IGI Poseidon section, ITGI will bring the gas from Shah Deniz II to Italy just as soon as it’s available, which we estimate will be around 2017.
The ITGI system is the most advanced pipeline project and is ready to go. Much of the infrastructure is already in place and the underwater section is relatively short. The detailed marine survey has been completed and ITGI is well on its way to completing the Front End Engineering Design. We understand other projects are not at this stage yet.
To conform fully to the EU’s third energy package, ITGI has already secured Third Party Access exemption for 8 bcm. We understand other projects are not at this stage yet.
To summarise, the ITGI system is the most technically advanced of the various projects. It is ready to go.
Do you think SOCAR, the gas company of Azerbaijan will allocate sufficient gas to fill the ITGI pipe?
The only gas that will be available for several years will be the 10bcm from Shah Deniz II which matches perfectly the ITGI system’s capacity. As more gas comes online in Azerbaijan, the system can be scaled to a total of 24 bcm.
The key challenge for large pipeline projects, along with securing financing and aligning a diverse group of partners, is the volumes available. A phased approach will open the Southern corridor quickest by getting the available gas to Europe, as soon as it’s available.
Will ITGI be operational as planned, in 2015? What are the news from the interconnector Stara Zagora-Komotini, which is part of ITGI?
I spoke with the Bulgarian energy minister last week and we agreed to make best efforts to open the Greece-Bulgaria connector by 2013, a year earlier than the planned 2014 with capacity scalable up to 5 bcm. Through local interconnectors, this will diversify the gas supply for the whole of South Eastern Europe in a very short period of time.
The IGI Poseidon section of the project, between Greece and Italy will bring 10 bcm of Azeri gas from Shah Deniz II to Europe, just as soon as it becomes available which we estimate will be around 2017.
In addition, because the ITGI system flow can be reversed, once the Poseidon section of the project is realized, it will be capable of providing additional sources of gas for Southern Europe, from North Africa, through Italy.
What other latest developments are there around ITGI?
ITGI has successfully completed the Detailed Marine Survey of the offshore section of IGI Poseidon. This is the section of the ITGI system that will connect the Greek and Italian gas transportation systems, to bring 10 bcm of Azeri gas to Europe. The results of the survey have confirmed the technical feasibility of the IGI Poseidon pipeline route and confirmed its strength as a viable plan offering the fastest route for moving Azeri gas to Europe