June 9, 2023 [Offshore Energy]- A floating storage and regasification unit (FSRU), which is currently undergoing conversion, is expected to secure low-emission energy while enhancing Southeastern Europe’s diversification of gas sources. Operated by the Gastrade consortium, the DNV-classed terminal off Greece will curb the region’s dependence on natural gas delivered through a single, land-based pipeline.
The turmoil that befell the global energy market due to the Ukraine crisis hit Europe the hardest, stoking fears of a gas crunch last year. As a result, Europe seems to have reached a consensus on the need for a fundamental change in energy policy, especially in light of the climate crisis, which spurs energy transition forward.
In this pursuit of low-carbon energy, gas rose through the ranks, becoming the king of the energy throne. However, liquefied natural gas (LNG) became a feasible alternative to pipeline-delivered natural gas, as it offers more flexibility in the delivery route and gas source.
According to DNV’s Leonidas Karystios, Regional Business Development & Gas Segment Director, the natural gas suppliers and infrastructure operators in Greece came to the conclusion that dependence on a single source and delivery route harboured unacceptable risk, when the supply of Russian gas to Europe was halted in 2009 in the wake of the Russia-Ukraine gas dispute. This led to the formation of Gastrade in 2010 to establish an offshore LNG terminal for Greece and its neighbouring countries.
Konstantinos Sifnaios, Vice President and Managing Director at Gastrade, remarked: “We realised how vulnerable Southeastern Europe was to a disruption if only one source for gas supply was available, and how important it was to have alternatives in terms of both supply routes and sources.”
Furthermore, the Alexandroupolis, the former 153,500-cubic-metre LNG Carrier GasLog Chelsea built in 2010, is the first FSRU conversion project under the Greek flag for operation in the Aegean Sea. Owned by GasLog, a partner in the Gastrade consortium, the vessel entered Keppel Shipyard in Singapore in early February 2023 for the regasification equipment to be installed, much of which was assembled in advance, and is scheduled to exit the yard on 8 November.
A few weeks later the vessel is expected to arrive near the northeastern Greek port city of Alexandroupolis, where it will be moored by the end of 2023. This FSRU will be connected to the National Natural Gas Transmission System (NNGΤS) of Greece via a 28-kilometre-long pipeline developed by Corinth Pipeworks, a steel pipes segment of Cenergy Holdings.
Karystios points out that DNV’s involvement in this project included preparing and submitting a study and proposal to the responsible authorities regarding the minimum safe complement of the planned FSRU. During the FSRU tendering process, DNV reviewed the specifications submitted, followed by the provision of class, approval, and statutory services during the current conversion phase.
The FSRU is anticipated to be ready to operate by the end of December, following the commissioning tests. Karystios explains that the permanent infrastructure, including the mooring system and connecting pipeline, is currently under construction.
The FSRU will have an annual regasification capacity of around 5.5 billion cubic metres. The Alexandroupolis LNG FSRU terminal project is scheduled to start operating on 1 January 2024. A major portion of the gas provided by the FSRU will be exported to Bulgaria and Romania.
“The rated supply capacity of the vessel is equivalent to the energy need of about seven large gas-fired power plants. The entire energy demand of all households in Greece amounts to about 10 per cent of that capacity,” added Sifnaios.
Moreover, Karystios claims that Southeastern Europe is anticipating “major economic growth” in the coming years and Gastrade is already preparing its next FSRU project, which is currently in the licensing stage. The second FSRU is expected to have roughly the same technical capacity as the Alexandroupolis and could begin operating in 2025.
Even though renewables are gaining group all over Europe, Sifnaios is of the opinion that it will take several decades before the energy demand of Southeastern Europe can be satisfied without fossil fuels. Therefore, the task is to replace high-pollution coal and oil until that time comes with “much more eco-friendly” natural gas while ensuring the region’s level of energy security can withstand “major political shake-ups.”
Bearing this in mind, Karystios predicts that LNG will play a key role in supplementing the gas volumes imported via the Southern Gas Corridor from Azerbaijan to Europe, which also connects to the subsea Trans Adriatic Pipeline (TAP) to Italy while reducing dependency. In line with this, Sifnaios believes that LNG provides the natural gas market with “the geographical flexibility it urgently needs.”
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