EurOil: Greece brings Alexandroupolis FSRU on stream

Greece has launched operations at a new floating storage and regasification unit (FSRU) off its northeast coast, the project’s operator Gastrade announced on October 1. 

The project will support Greece’s push to become a regional gas hub, bringing LNG ashore that can be delivered via a new pipeline to Bulgaria and further afield. The FSRU is situated off Greece’s northern port of Alexandroupolis and tied to the country’s gas grid via a 28-km pipeline. It is expected to deliver gas to eight other countries, Gastrade said, including Bulgaria, Romania, Serbia, Hungary and Ukraine.

The terminal has a capacity of 5.5bn cubic metres per year, and was developed jointly by Greece and other countries set to receive its gas.

"The project contributes to the energy security and diversification of energy supply resources and routes in southeastern and central Europe ... making [Greece] an energy gateway for more than nine countries," Gastrade said.

Almost all of the terminal’s capacity has been booked until 2030, by 14 Greek and foreign companies, Gastrade said. Some of its LNG will come from US exporter Venture Global, which last month entered into a 1mn tonne-per-year supply deal with Gastrade lasting five years. Deliveries will commence in 2025.

Gastrade’s shareholders include Greek companies Gaslog, DEPA and DESFA, and Bulgaria’s Bulgartransgaz. They made a final investment decision (FID) on the project in January 2022, and construction of the FSRU began in February 2023 in Singapore.

Greece already has more than enough gas import capacity to cover its own need for the fuel. It also has a 7 bcm per year LNG terminal on Revithoussa Island, and has access to Azeri gas via the Trans-Adriatic Pipeline (TAP). The country expects to purchase 1.2 bcm of gas from Azerbaijan this year, the government has said.

In contract, Greece consumed only 6.4 bcm of gas in 2023.

Athens is looking to further expand the country’s gas hub status, with plans to deploy a second, 2.5 bcm per year FSRU and secure more gas from Azerbaijan if and when TAP’s capacity is doubled to 20 bcm per year. It is also looking to raise the capacity of its interconnector with Bulgaria from 3 to 5 bcm per year. 

However, these projects depend on the EU following through on its commitment to eliminate Russian gas imports by 2027, which would provide an opening for more LNG and Azeri gas in southeast Europe. 

At the same time, Greece expects its own gas demand to decline significantly over the coming decades. In the draft for its latest energy strategy, published last month, the government projected that gas consumption would drop from 51.2 TWh in 2022 to 44.1 TWh in 2030 and a mere 16.2 TWh by 2050. Most gas in Greece is used to generate power, where demand is forecast to shrink from 19.1 TWh in 2022 to 10.4 TWh in 2030 and 4.8 TWh in 2050, as a result of deployment of renewables.

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