The discussion around the second floating LNG storage and regasification terminal in Greece is returning to the forefront, with the FSRU chapter “warming up” again, although the venture is by no means a given, especially when we are talking about an investment of at least 400 million euros.
A catalyst for the activity being recorded in the market was the barrage of announcements last week by the AKTOR group and the reference in its new business plan that it plans to allocate 190 million euros and, above all, that it is launching for this purpose a “joint venture with a strategic partner”.
The fact inevitably triggered scenarios speaking of a partnership between AKTOR and Motor Oil and the joint development of the FSRU being promoted by “Dioryga Gas”, the subsidiary of the Vardinogiannis group, in Ag. Theodoroi, Corinthia, something that is neither confirmed nor denied.
The speculation that flared up over the weekend is further intensified by what AKTOR sources say, namely that within the next few days - perhaps even today - there will be a new round of announcements, without details being given as to what they will concern.
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, beyond the reference to 190 million euros, stresses that a “joint venture with a strategic partner for the FSRU is being launched that will support the reduction of the project’s risk”, with the basic scenario providing for the booking of capacity in a new terminal without assuming operational responsibility.
This means that it is interested in entering a floating terminal only as an investor and will not be involved in its construction and operation.
Regardless of whether the information is confirmed or not, the discussion about the second floating terminal in Greece, after the one in Alexandroupolis, is heating up again. In the case of “Dioryga Gas,” the project is at a mature licensing stage and, as applies to all similar projects, for this one too, the final investment decision “passes” through the signing of long-term capacity booking contracts.
This condition was also reiterated by Motor Oil sources on the sidelines of the recent General Assembly, avoiding taking a position regarding the timing of the decision or linking it directly to securing financing support.
What is certain, however, is that the project has risen on the Vardinogiannis group’s “agenda,” as also indicated by the Memorandum of Understanding (MoU) recently signed by its subsidiary “Dioryga Gas” with the multinational giant in energy products trading Mercuria Energy. It establishes the framework for a long-term commercial cooperation with pillars being capacity booking at the terminal and LNG supply from Mercuria to Motor Oil.
The move had essentially been foreshadowed in May by “Dioryga Gas,” stressing that it is working on the entry of new players into the project’s shareholding structure, on securing a Third Party Exemption from RAAEY, and on obtaining a marine works permit.
Gastrade’s plan for a 2nd FSRU in the Thracian Sea
Within the year, the decision is also expected, positive or negative, as businessman D. Kopelouzos had said months ago, on whether Gastrade’s second floating terminal in the Thracian Sea will proceed, which since January has had approved environmental terms.
If it proceeds, we will be talking about a vessel with a capacity of 6 billion cubic meters per year that will be permanently anchored 9 km southwest of Alexandroupolis in the sea area of Thrace, while in the scenario that the decision is positive, the project could be energized within 2028.
The keys, not only for this specific project but also for every similar plan at the present stage, were and are securing large long-term contracts for booking part of the capacity, the level of returns that investors will receive, and competition from other countries.
“The shareholders of such an investment will have to reconcile themselves with the idea that the project will have a lower return (IRR) than the first FSRU, the one in Alexandroupolis, which had been built before the war in Ukraine began and cost 490 million euros, of which 210 million in fact concerned a Community subsidy,” Mr. Kopelouzos had said at the time, describing the new landscape, which is characterized by the absence of Community subsidies for natural gas infrastructure.
The tone is also set by the refusal (so far) of European banks to finance fossil fuel projects, with all that this means for the payback period of investments of this size, especially when very many have now developed FSRUs in Southeastern Europe, from Poland and Lithuania to neighboring Turkey.
Helleniq Energy and the Thermaic Gulf
Another major plan, which does remain alive, however there too the group has not pressed the button on the investment decision, is Helleniq Energy’s project for the Thessaloniki FSRU in the Thermaic Gulf.
“To invest 300-500 million euros and then after a few months for the balances in the natural gas market to change would not be prudent,” Helleniq Energy sources commented on Thursday regarding the floating terminal plan on the sidelines of the group’s General Assembly. And it is interesting that one of the reasons the group has not yet made its decisions is also the view conveyed by the same sources that the issue of Russian gas has not been definitively closed for Europe.
“If you tell me that Russian gas is definitively a thing of the past and will not at some point start flowing again, then I will also tell you when we will build an FSRU,” the specific executive said characteristically.
Finally, regarding the 4th plan that existed in the Greek market, that for the floating LNG terminal “ARGO” of Mediterranean Gas in the Pagasetic Gulf, the final curtain officially fell last year. It was brought down by the Ministry of Environment and Energy with the rejection of the Environmental Impact Study (EIS) file for the installation and operation of the project, citing the many negative opinions of bodies, and all that they imply for its environmental impacts.
Both RAAEY, however, and DESFA estimate that the domestic market can accommodate at most one more FSRU, and that under conditions, as Euro2day.gr has also written.