Natural gas: New pipeline in Greece for the energy supply of the Balkans

Greece seeks to open a second natural gas gateway for the Balkans.

After the pipeline with Bulgaria (IGB) that started operating last summer, the pipeline with North Macedonia is now underway. According to information, the companies running the project, Greece’s natural gas transmission system operator-DESFA and the state-owned NER have recently intensified their contacts in order to coordinate the actions to start the construction work. A related meeting took place in Skopje between executives of the two administrations last week.

The investment decision

The project is in an advanced licensing phase and the investment decision is pending.

DESFA, according to the available information, is going to take the relevant investment decision by the beginning of September for the part of the project on Greek soil.

The project envisages the construction of a pipeline with a total length of 123 kilometers and will extend from Nea Mesimvria Thessaloniki to Negotino via Evzoni/Gevgeli connecting the national natural gas transmission systems of Greece and North Macedonia, managed by DESFA and NER, respectively . Its initial transport capacity will be 1.5 billion cubic meters per year, with the possibility of expansion to 3 billion cubic meters per year, while studies have been carried out in order for the pipeline to have the appropriate specifications for the transport of green hydrogen.

The contests

The Administrator is even said to be preparing tenders for the supply of pipes and other necessary equipment. His responsibility for the project is on Greek soil. It is a 55 km long pipeline and its cost amounts to 67 million euros. DESFA has also secured financing of 25 million euros from the European Investment Bank for the Greek part.

Western Balkans

The Greece – North Macedonia pipeline is not only intended to supply natural gas to the neighboring country.

The plan also foresees the transfer of gas quantities to the Western Balkans. In this direction, North Macedonia is proceeding with the construction of a connecting pipeline with Kosovo. From there it will be possible to supply Montenegro as well.

Schedule

According to DESFA’s schedule, as described in the ten-year development program 2023 – 2032, the projected start date is the summer of 2025. For the project, a Memorandum of Understanding (MoU) has been signed between DESFA and NER in October 2016 as well as signed on September 10, 2021 Cooperation Agreement for the construction of the pipeline on both sides of the border.

Access to the National Natural Gas System and in particular to the Revythoussa terminal and gas through TAP will enhance competition, thus leading to potentially lower gas supply prices in the neighboring country. At the same time, this project promotes the regional development of the natural gas market and the activation of more users, contributing to the development of the Greek gas hub.