Alexandroupolis LNG terminal remains closed for another month
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On the day the Alexandroupolis LNG terminal in northeastern Greece was supposed to restart, the operator of the facility, Gastrade, extended the restart by another month. The company has never disclosed the details of the fault that kept the LNG terminal shut down just when the area needed gas the most.
With gas stocks in the European Union falling below 40% of capacity, the operator of the Alexandroupolis LNG terminal has significantly delayed the planned restart date, according to media reports.
Located off the northeastern coast of Greece, the facility has major potential to stimulate the market in Greece and other countries in southeastern Europe and ensure a sustained supply of gas.
Gastrade extended the shutdown by another month, until March 31. On January 23, the company reported a technical problem. It then announced that a limited regasification service would be available, but for several days there was virtually no gas flow. On January 28, the company said the liquefied natural gas facility had been taken out of service. Gastrade was due to restart the Alexandropoulis FSRU, Europe’s newest LNG terminal, on February 28. However, it extended the outage for a full month that day, fuelling concerns about the severity of the outage and speculation about the cause. The European gas operators’ association, Gas Infrastructure Europe, and the European Network of Transmission System Operators for Gas (ENTSO-G) took note of the update.
Capacity utilisation at the Alexandroupolis LNG terminal has been relatively low anyway
Commissioned for commercial operation in early October, the facility can regasify LNG at a rate of up to 5.5 billion cubic metres per year. The capacity of the floating storage and regasification unit (FSRU), the ship where the LNG is actually brought in, is 153,500 cubic meters.
The terminal has very few contracts, which means that this controversial malfunction does not directly threaten gas supplies to the Balkans. In addition, Bulgargaz has managed to secure its necessary volumes from Turkey.
Founding shareholder Elmina Copelouzou, owner and operator of the LNG carrier fleet GasLog DEPA Commercial, Bulgartransgaz and the Greek national gas system operator (DESFA) each control 20% of the Alexandroupolis-based company.
Discussions are underway in the European Union to reduce the mandatory gas storage level from 90% to 80%, on November 1st each year. Obviously, the measure would not contribute to security of supply next winter, but demand would be lower and would dissipate some of the pressure on prices
Just before the shutdown of the Alexandroupolis LNG terminal, a fault at Azerbaijan’s Shah Deniz gas field interrupted supplies to Europe via the southern gas corridor, the Trans Adriatic Pipeline (TAP). Earlier this year, Ukraine refused to renew a transit contract with Russia, halting gas flows to Central Europe at the start of the year. The TurkStream and then Balkan Stream pipelines remained the only direct and functional route for Russian gas.
Serbia, Hungary, Bosnia and Herzegovina and North Macedonia rely on the Alexandroupolis LNG terminal, the new interconnections between Greece and Bulgaria (IGB) and Bulgaria and Serbia, as well as gas supplies from Azerbaijan. In addition, there are plans for pipelines connecting North Macedonia with Greece and Serbia.
Serbia and Romania plan to build a gas link with an annual capacity of 1.6 billion cubic meters. Energy Minister Sebastian Burduja said last year that Romania has become the largest natural gas producer in the European Union. In addition, its offshore Neptun Deep field is due to come on stream in 2027.
