Overview

Greece is a minor consumer of gas in Europe, but is set to become an important transit country for gas into the southern part of the continent. The Shah Deniz 2 project in Azerbaijan will bring large volumes of Azerbaijani gas to the Greek border via the South Caucasus and Trans-Anatolian pipelines.

The Trans-Adriatic Pipeline will transport gas through Greece, Albania and under the Adriatic to the heel of Italy. The Greek gas network is therefore being expanded in anticipation of importing large volumes of gas from the Caspian. The European Commission authorised €134 million ($179 million) of funding for four projects to expand the Greek gas grid in October 2013.

These projects include a new gas compressor station in Messimvria to improve north-to-south gas flow and new high-pressure gas pipelines in areas of the country that currently do not have access to gas – including Aliveri and Ag Theodoroi-Megalopoli.

The funding will also go towards expanding the storage capacity of the Revithoussa LNG terminal. Greece has no gas storage facilities other than the LNG tanks at the terminal. The addition of a third storage tank there will give the country space to store 225 thousand cubic metres (Mcm) of LNG –the equivalent of 14 days of average gas demand and nine of peak demand.

The commission considers LNG to be important to European supply security and is willing to part-fund the expansion of the terminal at a time when demand for LNG is low and investors are unwilling to support such projects.

Greece is heavily dependent on gas imports from Russia and it is hoped the prospect of Azerbaijani gas and the expansion of Revithoussa will reduce this. In response to this competition, Gazprom lowered the price it charges Greece for gas to $393/Mcm, equivalent to a 15% cut, in June 2014.

Page updated: 01/08/2014