Friday, June 25, 2021

EU approves Greek state aid to LNG terminal of which North Macedonia and likely Kosovo too will benefit


Jun 25, 2021. Greece.

 The European Commission approved (EC)  €166.7 million Greek public support for construction of LNG terminal in Alexandroupolis which is set to use American gas of which North Macedonia has recently become stakeholder in two related projects, while Kosovo is negotiating with Greek government and USA authorities also for using the gas for a power plant.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "The new LNG terminal in Alexandroupolis will improve gas supply and infrastructure not only in Greece, but in the whole South Eastern European region. This will contribute to achievement of the EU's goals in terms of security and diversification of energy supply. The Greek support measure limits the aid to what is necessary to make the project happen and sufficient safeguards will be in place to ensure that potential competition distortions are minimised."

Greece notified the Commission of its plans to support the construction of a new LNG terminal in Alexandroupolis, consisting a Floating Storage Regasification Unit (“FSRU”) for the reception, storage and regasification of LNG (complemented by permanent offshore installations, such as mooring system and risers), as well as a system of a sub-sea and an onshore gas transmission pipeline which will connect the FSRU to the National Natural Gas System of Greece (“NNGS”).

Given its strategic importance for the diversification of natural gas supplies into the South-Eastern European region, the LNG terminal in Alexandroupolis has been included in the lists of European Project of Common Interest in the energy sector, based on the EU TEN-E (“Trans-European Network for Energy”) rules since 2013.

The terminal is expected to improve security of supply not only for Greece, but also for Bulgaria and for the wider South Eastern European region, as it will constitute a new potential energy source to feed into the interconnector between Greece and Bulgaria (“IGB”). The Commission approved public support for the IGB project, which is currently under construction, under EU State aid rules in November 2018.

The Greek Authorities have confirmed that the LNG Terminal would be apt to use for hydrogen, and that the project would contribute to a cleaner energy mix through increased use of gas instead of coal.

The project will be financed by the Greek State using European Structural and Investment Funds (“ESIF”), notably funds directly controlled and managed by Greece under the 2014-2020 Partnership Agreement for the Development. The support will take the form of a direct grant amounting to €166.7 million. The beneficiary of the aid is Gastrade SA, a company in which the Greek gas incumbent (DEPA) and the Bulgarian gas Transmission System Operator (Bulgartransgaz EAD) hold a participation. Gastrade will be the promoter and operator of the new terminal.