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Southeast European ministers stress more gas supply diversification

London — Countries in Southeast Europe need more gas supply diversification and interconnection to guarantee security of supply in the coming years, regional energy ministers agreed late Friday.

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At an energy forum in Thessaloniki, the energy ministers of Greece, Albania and North Macedonia, as well as the Bulgarian deputy energy minister, said developing new sources and new routes of gas supply would be a major benefit to the countries.

The Southeast European gas market is poorly interconnected and has historically been almost entirely dependent on imports from Russia.

"In terms of our import diversification strategy, the focus is on expanding import sources and import routes," Greek energy minister Kostis Hatzidakis said at the webcast forum.

Hatzidakis said long-term infrastructure projects to improve domestic energy security would be "at the center of our efforts."

Greece is currently involved in a number of gas infrastructure projects that would enable more non-Russian gas to reach Southeast Europe.

They include the TAP pipeline bringing Azeri gas via Greece and Albania to Italy, the IGB gas interconnector between Greece and Bulgaria, and the planned LNG import terminal at Alexandroupolis.

"The whole picture is changing with regard to interconnection," Hatzidakis said, pointing to the fact that the Greece-Bulgaria interconnector would link into both TAP and the Alexandroupolis FSRU.

INTERGOVERNMENTAL AGREEMENT

Hatzidakis said an intergovernmental agreement between Greece and Bulgaria to stabilize the tax framework on the IGB for 25 years would be signed soon.

"I hope that in the coming weeks I'll be in a position to sign the IGA with my Bulgarian counterpart," Hatzidakis said.

"There are some details to be addressed, but I believe that in the coming weeks we'll sign," he said, stressing that the pipeline was important not only for Greece and Bulgaria, but for the whole region.

The Greece-Bulgaria interconnector is a spur off the TAP pipeline, and is designed to transport up to 3 Bcm/year in forward flow to Bulgaria -- with an option to be increased to 5 Bcm/year -- and up to 2 Bcm/year in reverse flow.

Bulgaria's deputy energy minister Zecho Stankov agreed that one of Bulgaria's main priorities was security of supply. "We are doing a lot for diversification," he said, pointing also to the IGB and links to Serbia and North Macedonia.

"Of course this interconnector will give supply security for Bulgaria and whole region," he said, adding that Bulgaria planned to take 1 Bcm of gas from Azerbaijan via IGB from 2020.

Bulgaria's own gas demand is set to rise to almost 5 Bcm/year from 3 Bcm last year, and it also plans to take equity and capacity in the Alexandroupolis FSRU, giving it access to LNG to bring up to Bulgaria via Greece.

"For us it is important to extend our gas infrastructure to have as many connections as possible with our neighbors," Stankov said.

He added that LNG prices were currently "twice cheaper than pipeline gas" which is why Bulgaria has this year bought 300 million cu m of regasified LNG through Greece's existing Revithoussa LNG terminal.

Asked about Bulgaria's plans to build the onshore extension of one string of Russia's TurkStream pipeline, Stankov said Bulgaria would comply with all EU laws on gas and that it was important to have "as much competition as possible in Bulgaria."

NORTH MACEDONIA, ALBANIA

For North Macedonia, energy minister Naser Nuredini said he wanted to stress the "importance of diversifying our energy suppliers" given that the country is currently 100% dependent on Russian gas.

"Only by working together regionally can we secure our energy for the future," Nuredini said.

Albania's energy minister Belinda Balluku said the country could also increase its gasification, with TAP crossing its territory.

"We are working hard to diversify our energy sources," she said.

Albania currently is able to generate 100% of its electricity through hydro production, she said, but the country is looking to diversify into solar power.

Greece also wants to increase its renewable power generation, with Hatzidakis saying renewables were becoming more competitive versus thermal power generation.

--Stuart Elliott, stuart.elliott@spglobal.com

--Edited by Jonathan Loades-Carter, jonathan.carter@spglobal.com