Gas hub set to form in Greece as supplies converge, Depa says

Greece can become a natural gas price hub for southeast Europe within three to four years as supply projects come together in the Mediterranean nation, according to Depa SA.

Plans to ship gas from Azerbaijan, link Greece’s grid to Bulgaria’s, build a floating liquefied natural gas terminal in the northern Aegean Sea and possible Israeli and Cypriot supplies would create price differences with current pipeline gas from Russia and LNG from Algeria, Depa Chief Executive Officer Spiros Paleoyannis said in an interview in Athens. That would allow buyers to negotiate rates for gas volumes, he said.

“Greece took a strategic decision in the 1990s to expand its supply sources, to make the country a transport hub and to participate in the wider southeast Europe market,” Paleoyannis said. “The Aegean LNG terminal will be a new import source for the Balkans that will enable gas price differentiation and that will allow Greece to become a pricing hub.”

Depa supplies almost all of Greece’s gas, about two-thirds of which comes from Russia via Turkey and Bulgaria and most of the rest shipped in as LNG from Algeria into the Revithoussa terminal near Athens. The country has sought to diversify supplies after it was forced to import more LNG and switch a power plant to oil in January 2009, when a dispute between Russia and Ukraine disrupted flows to the region.

The Trans Adriatic Pipeline, or TAP, will carry Azeri gas across Greece and Albania to Italy from the Turkish border. Construction on the link with capacity of 10 billion cubic meters (350 billion cubic feet) a year is planned to start in 2016, according to the company, a venture that includes BP Plc and Statoil ASA.

Interconnector, LNG

A final investment decision on the 183-kilometer (114...