Greece almost doubles LNG imports in first half; US supplies surge
Greece’s LNG imports almost doubled year on year in the first half of 2020 as cheap spot LNG — particularly from the US — displaced Russian gas imports, data from S&P Global Platts Analytics showed July 22.
The Greek gas market is currently undergoing a significant shift due to the fall in spot LNG prices, which has meant LNG cargoes increasingly heading there.
Vice-president at state-owned gas importer DEPA, Kostas Andriosopoulos, said in late April that LNG was now penetrating the Greek market “at very competitive prices.”
According to data from S&P Global Platts Analytics, LNG supplies to Greece reached 1.9 Bcm of regasified gas in the period, almost double the volume imported in H1 2019.
If supplies were to be maintained at a similar rate through H2, Greek LNG imports could end up almost 1 Bcm higher than 2019’s total volume of 2.8 Bcm.
However, according to Platts Analytics, LNG could face renewed competition from pipeline gas later in the year, with new supplies set to begin from Azerbaijan via the Southern Gas Corridor in the fourth quarter.
“Greek LNG demand has performed well over the first half of the year, with the country procuring cheap spot cargoes in place of more expensive pipeline gas from both Russia and Turkey,” Platts Analytics LNG analyst Luke Cottell said July 22.
“However, minimum take-or-pay provisions in its term pipeline contracts, alongside the expected start-up of the TAP pipeline in Q4, squeeze the room available for LNG in the supply stack,” Cottell said.
In H1, US LNG supplies to Greece more than quadrupled to almost 1 Bcm, accounting for around half of the country’s total LNG imports.
Deliveries from Qatar also soared, while exports to Greece by long-term suppliers Algeria and Nigeria were steady year on year.
The rise in LNG imports comes as Greek imports of pipeline gas from dominant supplier Russia continues to fall.
According to data from Russian gas giant Gazprom, Russian gas sales to Greece in Q1 dropped by 7% to 690 million cu m.
That continues the downward trend in which Gazprom sold just 2.4 Bcm to Greece last year, 27% less than the 3.3 Bcm sold in 2018.
Greece’s state-controlled DEPA already has a long-term Russian gas import contract with Gazprom that runs to 2026, while the Russian giant in June signed a long-term supply contract with Greek industrial group Mytilineos for the import of Russian gas until 2030.
Mytilineos — which holds a leading position in the Greek power and gas trading — began importing Russian gas in 2017 and last year imported 600 million cu m under short-term contracts.
No volume was specified in the new long-term deal.
Greek gas demand was around 5 Bcm last year, but consumption is set to rise to some 7 Bcm/year later this decade due to a switch away from coal-fired power generation.
Greece is also set to play a bigger role in the regional gas market in the coming years, with the country set to become a gateway for LNG supplies into Southeast Europe with both the 7 Bcm/year Revithoussa import terminal and the planned 5.5 Bcm/year floating storage and regasification unit at Alexandroupolis expected to serve the wider regional market.
The developer of the Alexandroupolis project — Gastrade — has already won binding capacity commitments for 2.6 Bcm/year of LNG into the terminal.
Gastrade said in June it plans to take a final investment decision on the project in Q4 with startup expected two years later.
The latest guidance means the startup of the project could slip slightly from previous guidance of Q3 2022.