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July 17, 2014
by AEA
Greece presents its hydrocarbon treasure potential
Israel, Lebanon and Cyprus have managed to alter the strategic calculations over Europe’s future energy security, following the confirmation of the hydrocarbon reserves under the southeast Mediterranean seabed.
With concerns over developments in the Middle East and Russia, European governments and big oil companies are more than keen to explore new energy sources.
Greece has decided to join in and put into good use the encouraging seismic research data pointing to potentially significant oil and gas reserves in the Ionian Sea and south of Crete.
The presentation of the data, the newly drawn map of 20 hydrocarbon blocks covering an area from the north of Corfu to Cythera and from the west coast of Crete to the southeasternmost tip of the island and the terms of the international licensing round due to start in July took place in London, by a delegation headed by the Environment and Energy Minister Giannis Maniatis.
The intense interest in the area paid off for Greece, as the Hellenic Centre hall which hosted the two-day conference reached capacity, with around 40 large and medium energy companies being represented by two or more experts. What particularly satisfied the Greek ministry team was the fact that companies such as Exxon Mobil, Chevron, Total and BP were among those that had requested private meetings with the Greek experts. The meetings were mostly held on the second day of the event and focused on clarifications over geophysical, geological and other technical analyses. BP clearly stated that it is interested in participating in the licensing round, according to the Greek minister.
Energy analysts present at the event told IBNA that there is genuine interest by the big players for the Greek energy prospect, which however will need to be nurtured in order for the country to be actively included in the league of countries that are changing the energy landscape of Europe.
Greek officials reassured the interested parties that the government is serious about exploiting the new field in full, based on a clear and steady plan. Asked by this agency about what he considered to be the most attractive elements of the package that Greece has to offer to potential energy investors, Mr Maniatis pointed to factors such as the tax framework, the support of local communities and the reassurance over the government’s determination to ease the investment climate in the long run.
“First we offer a low taxation regime, a 25% tax of which 5% will be a regional tax benefiting the local communities. This fact on its own, this reciprocal benefit for the locals means a lot to an investor. And thirdly, companies will be drawn in because of the demonstration of our determination to keep all terms of the deal unchanged over the next decades,” said the minister.
As for what all this means for the crisis battered country, Mr Maniatis risked an estimation over the potential economic profit for Greece. “All experts advise politicians to avoid uttering such estimates,” quipped the Greek minister when prompted by journalists. “Nevertheless,” he continued, “we believe that looking at around 30 years’ time from now we can have an average income between 40% and 60% in total from each of the exploited hydrocarbon blocks. If the confirmatory drillings do confirm the seismic research data, then we are talking about a prospect of tens of billions for many decades,” said Mr Maniatis.
July 17, 2014
by AEA
Fresh debates on sea borders between Albania and Greece
A debate has been triggered in Albania over the pending agreement over the sea borders with Greece and the search for oil that the Greek side has started in the Ionian Sea. Albanian media published a map claiming that it was published by the ministry of Energy of Greece, which suggested tenders for oil exploration even in the areas for which the agreement between Albania and Greece on the sea border was annulled. The reaction of the Greek government was prompt, saying that it’s cautious with the steps that it’s taking.
Greece, 20 areas where oil is being explored
Greece has offered 20 areas to be explored for oil and gas in its seas. According to the Greek ministry of Energy, there are 225.000 square kilometers divided into 20 quadrants and which are currently under a tendering process. There are 20 international oil companies which have passed the final stage of selection. Among them is “BP”, “Exon Mmobil”, “Chevron”, “Stat Oil”, etc.
The Greek side is optimistic about the exploration made so far. According to it, there are clear signs that in many areas which will be tendered, there are big oil reserves. The optimism of the Greek side is even bigger about the fact that large gas reserves have been found in the southern part, near Cyprus.
The deputy minister who is responsible for Energy Issues in the Greek government, Janis Manjatis, says that Greece hides under its ground large quantities of oil and gas. These reserves are estimated to bring 20 billion Euro worth of profits to Greece in the next 20 years and at the same time, they turn the country into one of the biggest oil and gas producers in the region.
As far as oil explorations are concerned, media in Albania published a map showing that these explorations are also taking place in the Ionian Sea.
“What catches the eye in the map published by the Greek ministry of Energy is the fact that quadrant no. 1 and a part of quadrant 2 are in the much debatable area between Greece and Albania. This area, based on the old sea borders and which are still in force, are part of the exclusive economic area of Albania, but with the pact signed between Berisha’s government, they are given to Greece”, Albanian media reported yesterday. The agreement was signed by ‘Berisha’ government and Karamanlis for the Greek side, but it was quashed by the Albanian Constitutional Court.
Oil exploration, Greece: We will not cause problems with Albania
As far as the publication in many media in Tirana is concerned, the spokesman of the Foreign Ministry of Greece, Mr. Konstantinos Koutras has reacted.
He commented declarations according to which, areas which will be tendered by the Greek government for exploration and exploitation of oil and natural gas, also expand within the Albanian territorial waters.
Mr. Koutras denied such thing: “Greece fully respects International Law on the Sea. We have been careful not to create any problems with any of the neighboring country, namely Albania, with the areas which will be tendered. Of course, our framework of referral is joint acceptance and compliance with the International Law on the Sea”.
Andrea Stefani: Greeks are asking “Rama” government to commit political suicide
Prominent Albanian analyst, Andrea Stefani sees this as Athens’ effort to put an end to the issue of the sea borders and says that if Edi Rama’s government signs it with the previous terms, it would be political suicide
Stefani says that when Rama was in opposition, he considered the pact signed by Berisha as national treason. “If the Albanian government sings the pact for the sea waters with Greece based on the terms of the agreement signed by Sali Berisha government, such thing would be political suicide for the government of Edi Rama, which, when it was in opposition, it considered such agreement as treason to national interests”.
Stefani also recalls the fact that when Rama was in opposition, “he sent the agreement between Berisha and Greece to the Constitutional Court, which quashed it”.
“Even now, the government has demanded to the prosecution to investigate law violations committed by negotiators of the agreement in question”.
In this point, Stefani launches criticism about the way how the Greek Foreign minister is trying to unblock the situation.
“Venizelos has demanded to Rama to sign today what he considered as national treason yesterday! In other words, to commit an anti-national act. He’s also telling him to respect an agreement that the Constitutional Court has quashed! In other words, to act in the anti-European spirit by going against a court ruling! And all of this, under the gentle pressure that Greece will not vote in favor of the opening of negotiations”.
Prosecution hasn’t started any investigations
General Prosecution has not started any investigations over the agreement on sea borders signed with Greece in 2009.
Foreign Minister, Ditmir Bushati sent information relating to this agreement to the prosecution at the end of April, where he demanded an inquiry to be launched, also based on the decision of the Constitutional Court which quashed it.
General Attorney, Adriatik Llalla asked to the Foreign Ministry to send these documents and he asked it to send it in the form of criminal charges.
Sources from the prosecution said that Bushati’s materials were in the form of information and not criminal charges.
“The materials that arrived from the Foreign Ministry were not complete. The information stated that the signatories, without mentioning names, had violated two articles of the Criminal Code, namely article 208 and 210, which relate to the ‘surrendering of territory’ and ‘the agreement to surrender the territory’”, report sources from the Prosecution. The document signed by Bushati also quoted the ruling of the Constitutional Court, which quashed the agreement.
According to Bushati, besides the overthrow of the sea agreement by the Constitutional Court, the work group appointed by the Foreign Ministry has also identified several violations during the negotiations with Greek authorities. Bushati said that the prosecution must investigate if article 210 of the Criminal Code has been violated or not. This article leads to 5 to 10 years prison sentence for “agreements made with foreign states for partial or complete surrender of territories”.
“As far as the signatories of the agreement are concerned, I believe that the General Attorney has all the necessary documents, the ruling of the Constitutional Court, the international practice, which is considered to be violated by this court. He can also refer to the Criminal Code. As far as the people involved in the agreement is concerned, the necessary measures will be taken, while as far as the signatories are concerned, I will wait on the decision of the prosecution”, declared Bushati.
Two months have gone by since these declarations were made and which gave way to silence.
The agreement on sea borders with Greece was signed in 2009 in Tirana, in the presence of the two prime ministers, Berisha and Karamanlis, by the two foreign ministers, Lulzim Basha and Dora Bakojanis.
July 17, 2014
by AEA
TAP issues contract notice for supply and installation
TAP issues contract notice for supply and installation of gas turbine compressors in Greece and Albania
Trans Adriatic Pipeline (TAP) is continuing its pre-qualification of potential suppliers for the construction of the 870km-long high pressure natural gas pipeline with its associated infrastructure across Greece, Albania, and Adriatic Sea with landfall in Southern Italy.
This week TAP has issued its fourth contract notice in the Official Journal of the EU – the EU Gazette: Link to the announcement for the supply and installation of ~ 15 MW range gas turbine turbo compressors.
Six turbo compressors will be purchased for installation on two compressor stations – three for a compressor station in Albania near Fier, and three for a compressor station in Greece near Kipoi.
Companies interested in being pre-qualified for this contract need to request a pre-qualification questionnaire from TAP no later than 14.07.2014. This request can be sent to TAP via email atpqq.turbocompressors@tap-ag.com.
The scope of this Supply Contract will include manufacturing, delivery, engineering, installation and pre-commissioning of the turbo compressors. The potential suppliers need to demonstrate that their equipment is “proven technology”, which has been successfully used on compressor stations similar to TAP’s.
The compressor stations will be built in accordance with the international industry standards on health and safety, located at a significant distance away from highly populated areas, causing minimum impact on the environment and local communities. TAP has developed a set of measures to mitigate any impacts as described in its Environmental and Social Impact Assessments (ESIA in Albania and ESIA in Greece).
The current pre-qualification is the fourth one, following contract notices on construction of Albanian roads and bridges, onshore pipeline construction in Greece and Albania, construction of compressor stations in Greece and Albania. Full overview of the procurement process in TAP:www.tap-ag.com/tenders.
The next contract notices to be issued by TAP over the next three months will include the pre-qualification of companies supplying Large Diameter Valves and steel line pipes for onshore section of TAP.
If you are interested in receiving regular updates from TAP (not limited to procurement) pleaseSubscribe.
About the Trans Adriatic Pipeline (TAP)
TAP will transport natural gas from the giant Shah Deniz II field in Azerbaijan to Europe. The approximately 870 km long pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before coming ashore in Southern Italy.
TAP will promote the economic development and job creation along the pipeline route; it will be a major source of foreign direct investment and it is not dependent on grants or subsidies. With first gas sales to Georgia and Turkey targeted for late 2018, first deliveries to Europe will follow approximately a year later.
TAP’s shareholding is comprised of BP (20%), SOCAR (20%), Statoil (20%), Fluxys (16%), Total (10%), E.ON (9%) and Axpo (5%).
July 17, 2014
by AEA
China Three Years Late on Installing Offshore Wind Farms
BEIJING – China is three years behind schedule on a plan that would make it the world’s biggest market for offshore wind, a setback for the $15 billion industry that’s seeking to produce affordable electricity from the one of nature’s most reliable energy sources.
China set out an ambitious plan in 2011 to build 5,000 megawatts of offshore wind turbines in four years, enough to power 5.4 million homes. With less than 10 percent of that capacity in place, officials now say they won’t meet that goal.
Strong, steady offshore breezes have the potential to become an important source of electricity, but installing jumbo- jet sized gear in the harsh, marine environment is a complicated and expensive endeavor. The slow pace in China is matched by the U.S., which has no offshore wind farms after more than a decade of development efforts. In Europe, the only continent with any significant sea-based wind power, companies have scrapped plans for more than 5,700 megawatts since November.
China is “more cautious” on offshore wind than it was on solar and onshore wind because “it’s more risky and costly,” said Shi Pengfei, honorary chairman of the Chinese Wind Energy Association.
The target for offshore wind “definitely can’t be attained,” said Li Junfeng, director general of the National Center for Climate Change Strategy and International Cooperation. That’s a rare public admission from the government agency responsible for studying climate-change policy.
Turbine Makers
German power-equipment maker Siemens AG, along with Chinese competitors Xinjiang Goldwind Science & Technology Co. and Sinovel Wind Group Co., have the most at stake since they’re the top turbine suppliers for China’s offshore projects.
There was 429 megawatts of offshore wind power operating in China at the end of 2013. The country may install about 500 megawatts of offshore capacity next year and 1,000 megawatts in 2016, according to Bloomberg New Energy Finance.
Worldwide, about 2,570 megawatts are expected to be installed this year, worth about $15 billion. That total may grow to 7,560 megawatts in 2020, according to the London-based researcher.
“Offshore wind is at the testing stage and development won’t be too fast,” said Gao Hongbiao, deputy general manager of Jiangsu Longyuan Offshore Wind Power Co., a unit of one of the four biggest Chinese utilities commissioning wind projects.
Onshore Wind
Offshore turbines are insignificant when compared to China’s onshore wind capacity of 77 gigawatts. That’s the most in the world, and the government has plans to install an additional 18 gigawatts this year, according to the National Energy Administration. The cost of power from land-based wind rivals that of coal or natural-gas fired plants.
China is moving slowly with offshore wind after its onshore wind industry expanded so quickly that the rest of the country’s energy infrastructure couldn’t keep up. As much as 12 percent of its onshore wind turbines weren’t connected to the grid in 2013. Another 11 percent of the turbines had grid connections and were idled because transmission lines couldn’t handle all the output producing.
“China learned from experience on onshore projects when setting offshore policies,” said Tang Wenqian, executive vice secretary-general of the Chinese Renewable Energy Industries Association, an organization that acts as a conduit between government policy makers and industry executives.
‘Well Behind’
What’s happening in China is mirrored in other regions, said Steve Sawyer, secretary-general of the Global Wind Energy Council.
Progress in the industry “is well behind most projections that have been made,” he said in an e-mail.
In the U.S., Cape Wind Associates LLP has been planning what may be the country’s first offshore wind farm for more than a decade, in Nantucket Sound, off Massachusetts. It’s faced stiff opposition from fisherman, American Indian groups and local residents including both the Koch and Kennedy families.
A handful of other companies are also developing Atlantic Coast wind farms. The U.S. Interior Department has awarded five leases from Massachusetts to Virginia and is planning to auction more offshore sites this year.
Europe is the most advanced market for offshore wind, with about 7.3 gigawatts in operation, and 4.9 gigawatts under construction, according to the European Wind Energy Association.
Unexploded Mines
Even there, environmental concerns and risks including unexploded World War II-era undersea mines are driving up the cost of what’s already a costly source of power. Developers have canceled plans to build more than 5,700 megawatts of additional capacity since November.
Offshore wind is among the most expensive renewable energy technologies working at utility scale. Towers as tall as 40- story buildings must be anchored to the seabed, holding blades as long as the wingspan on the biggest commercial jetliners. The units must withstand storms that buffet the coast, including typhoons that hit China in the summer.
The cost of offshore turbines is surpassed only by solar- thermal systems, which use the sun’s energy to heat fluids, and by more experimental equipment that produces electricity from the motion of waves and tides, according to data compiled by Bloomberg.
The price China is offering for offshore wind power is the lowest among nations that have publicly set out goals for developing the industry.
Offshore Rates
It set incentive rates of 750 yuan a megawatt-hour for projects in inter-tidal areas, waters up to five meters deep, and 850 yuan for turbines in water deeper than that. That comes out to about 89 euros ($121) and 101 euros, compared with 255 euros for offshore wind in Japan, about 150 euros in the U.K. and 124 euros in Germany.
The prices set for offshore wind power are “quite conservative,” said Tang of the renewable energy lobby group.
Even so, China’s rates may be enough to attract some developers. Rates of return for the projects may be as much as 8.2 and 10.3 percent, according to Bloomberg New Energy Finance estimates.
“We can still make money at the new rate,” said Lan Peizhen, investor relations manager at China Longyuan Power Group Corp., the nation’s biggest developer of onshore and offshore wind farms. The company currently operates 250 megawatts of inter-tidal projects. It’s building a 100-megawatt inter-tidal project in the eastern province of Jiangsu and a 400-megawatt sea-based project in Fujian.
Bigger Turbines
Goldwind “will gradually develop offshore turbines with bigger capacity as well as higher reliability and power generation,” the company said in an e-mailed response to questions.
“Offshore wind is the main battlefield of displaying Sinovel Wind’s skill to the full,” Sinovel’s media manager, Bao Zhen, said in an e-mailed response to questions. Cordula Ressing, a spokeswoman for Siemens, declined to comment when contacted by phone and e-mail.
The government in Beijing may have to issue a general plan for ocean uses before pressing the industry to expand more quickly, said Wang Zhongying, deputy head of the Energy Research Institute at National Development and Reform Commission, a state-level organization that studies energy policies. “It’s hard to see a rapid development in offshore wind power,” Wang said.
July 16, 2014
by AEA
3rd Annual Balkans and the Adriatic Oil & Gas 2014 Summit
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