Greek-Bulgarian reverse gas flow plan expected by winter

Kirsty Ayakwah

06-Jun-2016

An agreement allowing natural gas flow from Bulgaria to Greece to be reversed is anticipated in the fourth quarter of 2016, sources told ICIS.

A deal was expected at the end of May, but failed to materialise. Sources within private Greek companies suggested the delay was coming from Bulgaria and was affected by its dealings with Russian supplier Gazprom, which has booked capacity on the pipe connecting the countries. Prior to that, a decision was expected last November, (ESGM 23 July 2015).

The potential for bi-directional flows began with the implementation of the EU-wide capacity allocation mechanism (CAM) network code on 1 November 2015.

This, in theory, makes cross-border bundled capacity available between the two countries. Currently, Russian-sourced gas enters Greece via Bulgaria along the single-direction pipeline.

Pipeline capacity during peak times is estimated at 3.6 billion cubic metres (bcm)/year, sources said. Although it is not clear how much of that is used.

One source said there is a percentage of capacity that is not used and could, under EU capacity management rules, be released to others in the market. Without an interconnection agreement, reverse flow is not possible.

A Greek trader said pressure from the EU to meet CAM rules, as well as interest from companies wanting to buy capacity, is likely to accelerate a conclusion on the agreement and that it could be reached by October.

No one at Bulgarian TSO Bulgartransgaz, Greek equivalent DESFA or Greek regulator RAE was available for comment before this article went to press.

TSO strategy

A DESFA draft public consultation report on planned developments between 2016-2025 outlined the possibility of reverse flow through the metering station at Sidirokastro in Greece, meaning exporting volumes to Bulgaria would be possible.

The wording from DESFA makes it unclear if the proposed reverse flow is virtual or physical.

According to one source, which operates a private gas business in Greece: “The only case where the reverse flow can become physical is when/if [gas incumbent] DEPA decides not to import any Russian gas through the Sidirokastro entry point. On that day, DESFA could physically reverse flow from [Greek LNG terminal] Revythoussa.”

A second source said the upgrades DESFA aims to conduct would make it technically possible to physically flow gas from Greece to Bulgaria.

The issue was not the infrastructure, which the document outlines would be upgraded by December 2016, but the politics preventing the conclusion of an agreement in the region. kirsty.ayakwah@icis.com

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