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Greece presses ahead with floating LNG terminal
Geopolitically important project part of Europe’s plan to replace Russian gas supplies
Michael Marray 14 Sep 2022

Greece is the latest European country to set up a network of floating storage and regasification units (FSRUs), which will supply natural gas via pipeline to the Greek mainland and onwards to other areas of southeastern Europe.

A liquefied natural gas (LNG) terminal in Alexandroupolis in northern Greece will be financed by the combination of a government grant, a commercial bank loan and shareholder capital.

The European Commission has already given the green light to €166.7 million (US$168.7 million) of grants from the Greek Public Investment Programme and the European Structural and Investment Funds for the project.

The National Bank of Greece, a private commercial bank, has signed a €283 million debt financing for the project. Norton Rose Fulbright and Bernitsas Law advised the bank.

Around €113 million of equity will be provided by the project shareholders. The terminal will be built by Gastrade, majority owned by Greece’s Copelouzos Group, with Greek LNG shipper Gaslog taking a 20% stake and acting as FSRU provider and operator.

The project is viewed as having great geopolitical importance as European countries seek to replace Russian gas supplies. In addition to supplying gas to Greece, it will also serve new export routes to Bulgaria and North Macedonia.

A system of underwater and land pipelines will allow the gas to be transmitted to Greece’s national natural gas transmission system. The terminal is a fast-track project, with the FSRU scheduled to be online by the end of 2023.

In May, European Council president Charles Michel and the leaders of Greece, Bulgaria, Serbia and North Macedonia attended a ceremony to mark the start of the project.

Engineering and certification specialist RINA has joined forces with Greek engineering consultancy Asprofos to provide project management consultancy services for the Alexandroupolis Independent Natural Gas System, which will consist of a permanently moored FSRU and pipeline system.

Stationed in the northeastern part of the Aegean Sea, the FSRU will have a storage capacity of 153,000 cubic metres (m3) with a nominal gas send-out rate of 625,000 cubic metres per hour.

In June, another fast-track project was announced. The US$365 million Mediterranean Gas Project aims to be up and running by the first quarter of 2024 with a throughput of 4.6 billion m3 per year, and will be connected to the mainland through an underwater pipeline located at the central Greek Aegean Sea town of Volos. The project plans to charter an LNG vessel from BW LNG. The project also signed a memorandum of co-operation to be potentially supplied with natural gas from ExxonMobil LNG Market Development.

Meanwhile, the Vardinoyiannis business group, which owns shipping company Avin International and refiner Motor Oil, is behind another FSRU project located to the west of Athens, which will be operated by Vardinoyiannis-controlled refiner Motor Oil.

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