The debate surrounding Greece’s second floating LNG storage and regasification terminal is back in the spotlight, with the FSRU issue “heating up” again, though the project is by no means a foregone conclusion, especially given that it involves an investment of at least 400 million euros.
A catalyst for the market activity observed was last week’s flurry of announcements from the AKTOR Group and the mention in its new business plan that it plans to allocate 190 million euros and, most importantly, that it is setting up a “joint venture with a strategic partner” for this purpose.
This development inevitably sparked speculation about a partnership between AKTOR and Motor Oil and the joint development of the FSRU being promoted by “Dioryga Gas,” a subsidiary of the Vardinoyannis Group, in Agioi Theodoroi, Corinth—a development that has neither been confirmed nor denied.
The speculation that flared up over the weekend is further fueled by reports from AKTOR sources that within the next few days—perhaps even today—there will be a new round of announcements, though no details have been provided regarding their content.
In any case, the fact that the group is in talks with a domestic player in the FSRU sector confirms the very business plan it announced on Thursday. The presentation, in addition to mentioning the 190 million euros, emphasizes that a “joint venture with a strategic partner for the FSRU is being planned to help mitigate the project’s risk,” with the base case scenario calling for the commitment of capacity at a new terminal without assuming operational responsibility.
This means that it is interested in participating in a floating terminal solely as an investor and will not be involved in its construction or operation.
Regardless of whether this information is confirmed or not, the discussion regarding a second floating terminal in Greece—following the one in Alexandroupoli—is heating up again. In the case of “Dioryga Gas,” the project is in an advanced licensing phase, and as is the case with all such projects, the final investment decision hinges on the conclusion of long-term capacity commitment contracts.
Sources at Motor Oil reiterated this condition on the sidelines of the recent General Meeting, while refraining from commenting on the timing of the decision or linking it directly to securing financial backing.
What is certain, however, is that the project has moved up on the Vardinoyannis Group’s “agenda,” as indicated by the Memorandum of Understanding (MoU) recently signed by its subsidiary “Dioryga Gas” recently signed with the multinational energy trading giant Mercuria Energy. This establishes the framework for a long-term commercial partnership centered on capacity commitments at the terminal and the supply of LNG from Mercuria to Motor Oil.
This move had essentially been foreshadowed in May by “Dioryga Gas,” emphasizing that it is working on bringing new players into the project’s equity structure, securing a third-party exemption from RAEY, and obtaining a marine works permit.
Gastrade’s Plan for a Second FSRU in the Thracian Sea
A decision—whether positive or negative—is also expected within the year, as businessman D. Kopleouz, regarding whether Gastrade’s second floating terminal in the Thracian Sea will move forward; the project has had its environmental terms approved since January.
If it goes ahead, we’re talking about a ship with a capacity of 6 billion cubic meters per year that will be permanently anchored 9 km southwest of Alexandroupoli in the Thracian sea area, and if the decision is approved, the project could be up and running by 2028.
The key factors—not only for this specific project but for any similar plan at this stage—have been and remain securing large, long-term contracts to commit a portion of the capacity, the level of returns investors will receive, and competition from other countries.
“The shareholders in such an investment will have to accept the idea that the project will have a lower (IRR) compared to the first FSRU—the one in Alexandroupoli—which was built before the war in Ukraine began and cost 490 million euros, 210 million of which came from an EU subsidy,” Mr. Kopelouzos had said at the time, describing the new landscape, which is characterized by the absence of EU subsidies for natural gas infrastructure.
The tone is also set by the (continued) refusal of European banks to finance fossil fuel projects, with all that this implies for the payback period of investments of this magnitude, especially since so many FSRUs have now been deployed in Southeast Europe, from Poland and Lithuania all the way to neighboring Turkey.
Helleniq Energy and Thermaikos
Another major project—which, while still on the table, has not yet prompted the group to make a final investment decision—is Helleniq Energy’s project for the Thessaloniki FSRU in Thermaikos.
“It would not be prudent to invest 300–500 million euros only to see the balance of the natural gas market shift a few months later,” Helleniq Energy sources commented on Thursday regarding the floating terminal project on the sidelines of the group’s General Meeting. And it is interesting to note that one of the reasons the group has not yet made its decisions is the view expressed by the same sources that the issue of Russian gas has not been definitively resolved for Europe.
“If you tell me that Russian gas is definitively a thing of the past and will not start flowing again at some point, then I’ll tell you when we’ll proceed with the FSRU,” the executive in question stated.
Finally, regarding the fourth project that was in the works in the Greek market—Mediterranean Gas’s “ARGO” floating LNG terminal in the Pagasetic Gulf—the project was officially scrapped last year. The Ministry of Environment and Energy brought it to a close by rejecting the Environmental Impact Assessment (EIA) dossier for the project’s installation and operation, citing the numerous negative opinions from various agencies and their implications for the project’s environmental impact.
However, both RAEY and DESFA estimate that the domestic market can accommodate at most one additional FSRU, and even then only under certain conditions, as Euro2day.gr has reported.