LNG for Black Sea critical for EU (PHOTO)

LNG for Black Sea critical for EU (PHOTO)

Baku, Azerbaijan, Oct. 25

By Azer Ahmadbayli – Trend:

One of the critical tasks of energy security, which is now being solved by the EU, is the creation of a common gas network, which would include construction of interconnectors, reverse pipelines engineering etc.

But Europe, in addition to a pipeline gas, needs a flexible system of supply to any point, when and where necessary. Despite its capital intensity, LNG supplies provide such efficiency.

With European imports expected to double by 2025, Europe will become a major importer [of LNG], Massimo Di-Odoardo, Vice President, Global Gas and LNG Research, told Trend news agency.

“There is now enough market space in Europe to absorb this. The market will require new LNG supply as soon as in 2022. By 2025 we expect that 65 billion cubic meters of LNG will be required,” he said.

There are enough LNG terminals in Europe today, but if we look at their geographical location, we will notice an imbalance. All receiving terminals are located mainly in Western (France, Spain, the UK, the Netherlands) and Southern (Italy, Greece) Europe. We can't find any on the Black Sea coast.

At the same time, past experience suggests that the most vulnerable region in terms of gas supplies is South-Eastern Europe – the Black Sea basin countries, Hungary, Balkan countries.

So far, the Black Sea remains an untapped territory for LNG supplies. None of the Black Sea littoral states has an infrastructure that would provide the entire supply chain.

The EU may think over ensuring the flexibility of gas supplies at its South-Eastern flank, especially since such a project already exists.

I am talking about the AGRI (Azerbaijan-Georgia-Romania Interconnector) project, which could be a pioneer in the region's LNG trade.

The project involves transportation of Azerbaijani natural gas (in future it may be Turkmen gas as well) to the Black Sea coast of Georgia (presumably the port of Kulevi), where a liquefaction plant will be built. Further, the LNG will be transported by carriers to the Romanian port of Constanta for re-gasification and then delivered to consumers in Romania, Hungary (Interconnector Arad-Szeged), and probably further to a number of Balkan countries.

The capacity of the project can vary from 2 to 8 bcm per year. Depending on this, its cost ranges from 1.2 billion to 4.5 billion euros.

AGRI is still the first LNG project with tangible shape, proposed in the Black Sea region. At the World Forum of global infrastructure leaders, held in New York in January 2011, it was included in the list of top 100 best infrastructure projects in the world.

The AGRI Feasibility Study has already been finalized, with positive conclusions in both scenarios considered (in terms of projected delivery capacity).

A source in Romanian Government told Trend in August that financing options might include special EU financing programs for energy - such as Common Interest Projects (CIP), Energy Community Common Interests Projects (ECCIP) and Mutual Interest Projects (MIP) – and/or the banks specialized in financing energy/infrastructure projects.

The EU could support Romania and Hungary at the political level and push the project forward, as it meets the fundamental concerns of the entire Union.

As the Turkish Straits, linking the Black Sea with the Mediterranean, are already well congested and because of the gradual shallowing of the Bosphorus, Turkey intends to start the construction of a new shipping channel "Istanbul" in the near future in order to increase traffic flow, ease the load on the Bosphorus Strait, as well as to prevent the threat of environmental and man-made disasters.

The width of the channel is planned to be 400 meters, the depth - 25 meters. The vessels with a length exceeding 275 meters and a width above 48 meters and with dwt of more than 14,500 cannot pass through the channel.

Because of their dimensions, LNG vessels of Q-Flex and Q-Max type cannot enter the channel. Nevertheless, its opening will make LNG supplies from the Mediterranean (and possibly even the Persian Gulf) to the Black Sea possible with potential exporters using conventional gas carriers.

Based on data received from Kpler, a data intelligence firm providing transparency on global commodity flows, there are currently only 3 active plants in the Mediterranean: two in Algeria (Skikda, Bethioua) and one in Egypt - Idku. These plants have a total nameplate capacity of 35.6 mtpa (however, the region only exported 13.5 mtpa in 2017). Marsa El Brega terminal in Libya is suspended.

Destination countries in the Mediterranean - Spain, Italy, France, Turkey, Greece, Israel and Malta - totally have 14 acting re-gasification terminals with a total capacity of 66.7 Mt.

Algerian terminals Bethioua and Skikda have a total capacity of 28.5 Mt. In 2017, the nearly entire inter-Mediterranean LNG flows originated from this country (10.12 Mt vs. 0.22 Mt from Egypt), and this figure remains almost unchanged from 2012.

So, as it is seen from the figures, Algerian terminals operate at about a third of their capacity.

Hypothetically, Algeria would be able to supply LNG to the Black Sea countries, but it would most likely be very small volumes, given the steadily growing domestic gas consumption, obligations to fill existing and under-construction gas pipelines to Europe, large-scale investments to increase production and some other issues.

As for Egypt, its exports are expected to increase in 2019 with Idku liquefaction terminal increasing production and also Damietta being recommissioned. The plant exported its last cargo in November 2012 and has been shut down ever since. The plant has an original nameplate capacity of around 5.05 mtpa. Once fully active, the plant could increase the overall capacity of the region to 40.65 mtpa.

However, Egypt is now in the center of a contest for sea shelf of the Levantine basin, where interests of several countries got mixed up.

A year ago, the project of delivery of Israeli, Egyptian and Cypriot gas via the EastMed underwater pipeline to Europe was under discussion. Now, Egypt and Cyprus have agreed to lay an underwater pipeline to re-export LNG, primarily to European countries, the Egyptian ministry of oil and mineral resources has recently reported.

The situation with the Eastern Mediterranean gas is changing rapidly, and there is no certainty as to how Egypt is going to use its gas reserves. However, Egypt, like Algeria, can be considered a potential exporter of LNG to the Black Sea region.

Russia and Azerbaijan lead in import of electricity to Georgia
Russia and Azerbaijan lead in import of electricity to Georgia
Europe reviewing Russia's COVID-19 vaccine
Europe reviewing Russia's COVID-19 vaccine
Turkmenistan ranks second in oil exports through Russia
Turkmenistan ranks second in oil exports through Russia
Loading Bars
New reality created in South Caucasus - head of department at Istanbul Kadir Has University
Demining of Azerbaijani lands complicated by Armenia’s refusal to provide maps of minefields - Expert
Long-awaited end to Karabakh conflict creates new opportunities - Former US ambassador to Azerbaijan
Azerbaijan shows footage from Kechikli village of Zangilan district (VIDEO)
Azerbaijan interested in strengthening export and investment potential with Argentina
President Aliyev gives speech at virtual Summit of Economic Cooperation Organization
MFA shares potential sectors of Lithuanian investment in Georgia
Georgian kiwi enters Japanese market
Azerbaijan's ENGINET company talks unique solutions for local market
Kazakh gold extracting venture opens tender to buy spares
Kazakhstan intends to attract funds to improve energy efficiency of facilities
Volume of food products sold in Baku's trade network increases
Georgia shows progress in curbing coronavirus cases - WHO
Azerbaijani Finance Ministry allocates funds for maintenance services
Restaurant business subsidizing program launched in Tbilisi
UK's Johnson says Brexit problems in Northern Ireland are solvable
Supporting Member Country ECAs: ICIEC endorse supportive reinsurance treaty with JLGC
Uztekstilprom, French Proparco talk profitable financing for textile projects
Georgian consulting company launching project for female entrepreneurs
Georgian wine export to US down
Russia and Azerbaijan lead in import of electricity to Georgia
Several low-cost airlines resume flights to Georgia
Azerbaijan-Belarus foreign trade operations for Jan. 2021 revealed
Azerbaijan confirms 124 more COVID-19 recoveries
Kazakhstan increasing control over development of oil and gas fields
State property privatization plan in Georgia surpasses initial plan
Several containers with cargo to pass through Azerbaijan along BTK railway - ADY Container
Rehabilitation centers can be established in Azerbaijan's liberated lands - Agency
Azerbaijan discloses number of imported cars in 2020
Uzbekistan’s 1M2021 profit for banks increases
Germany approves AstraZeneca for over-65s
New plant to be commissioned in Baku
Azerbaijan to receive Astra Zeneca vaccine via COVAX mechanism - WHO
Turkmengas opens again tender for operation of video surveillance system
Uzbekistan, Belarus agree to expand range of mutually supplied agricultural products
Uzbek currency rates for March 5
Italian Eni launches implementation of its solar energy project in Kazakhstan
Ensuring security in Karabakh our top priority - Turkish president
Georgia eyes to select new investor for Anaklia port
Creation of Kazakhstan-Azerbaijan Business Council under discussion
Covaxin demonstrates prowess of Atmanirbhar Bharat, says ICMR chief
India, Philippines sign key defence pact, set ball rolling for BrahMos missile sale
Turkey supports Georgia in deepening relations with Euro-Atlantic structures
Moldova Post plans to develop co-op with Turkmenistan in field of postal services
Georgia preparing for issuance of new Eurobond
Europe reviewing Russia's COVID-19 vaccine
German companies interested in funding Azerbaijan's railway projects
Uzbekistan to launch production of electric scooters in Fergana region
Azerbaijani State Customs Committee chairman names most-imported products for 2020
India, Norway to work together in marine spatial planning
PM Modi may launch trading points, connectivity projects in Dhaka
India to fund NRs 246 million for reconstruction of Cultural Heritages in Nepal
Kazakhstan, Tajikistan resuming mutual air traffic
Several ships and related facilities to be launched in Iranian ports
Iran reveals COVID-19 data for March 4
Azerbaijani FM’s letter to UN sec-gen disseminated as document of organization
Kazakhstan increases imports of Iran-made goods
Georgia plans to create new economic development plan
Baku Statistical Department discloses Jan. 2021 volume of paid services to citizens
Electricity production in Georgia to increase after Namakhvani HPP is ready
Uzbekistan reveals volume of industrial production for Jan. 2021
Students and graduates of Baku Higher Oil School shown high results in entrance exams for master's degree programs
Azerbaijani PASHA Bank eyes attracting IT companies to implement joint projects
Azerbaijani banks' demand at foreign exchange auction decrease
Iran’s Bahar Azadi gold coin price fell
Azerbaijan, Turkey to hold joint military exercises (PHOTO)
Turkish foreign minister to visit Uzbekistan
Volume of cargo loaded, unloaded in Iran’s Dayyer port revealed
Kazakhstan’s Ulba Metallurgical Plant announces tender to buy accumulators
Moldova Post talks details of postal communication resumption with Turkmenistan
Buta Airways to launch ticket sales for Baku-Istanbul-Baku Flights
Iran Khodro Company expects to meet forecasts
Azerbaijani IT company seeks to promote smart home systems abroad
Iran declares data of exports, imports via Astara port
Several mines produced by Armenia found in Azerbaijan’s Aghdam district - Trend TV reports
Azerbaijan releases 2M2021 data on transactions of local investment companies'
EU delegation's head talks interest in raising Azerbaijani regions' financial inclusion
Most of construction work in Baku during Jan. 2021 carried out by private companies
BlackRock builds 5% stake in Toshiba, becomes third largest shareholder
Iran discloses volume of rapeseed to be harvested
Azerbaijan, Iran negotiating to open customs post on border, in Khudaferin village
Uniper sees increase in generation capacity
EU invests in micro-entrepreneurship dev't in Azerbaijani districts
Azerbaijan gives update on number of COVID-19 vaccinated citizens
Turkmenistan to expand production of Balkanabat iodine plant
Azerbaijan expects creating new broadcasting opportunities for Internet TV, radio channels
Belarus excludes Azerbaijan from list of countries with heavy COVID-19 situation
Israeli identity validation co Identiq raises $47m
Kazakhstan boosts trade turnover with India despite COVID-19
Industrial oil inflow received at Turkmen field
Exxon and Macquarie in $11.7 billion U.S. lawsuit over gas contract
China boosts steel imports from Turkey
Georgia reports 133 new cases of coronavirus for March 4
Azerbaijan considers joint military exercises with Pakistan - President Aliyev
Azerbaijan wants peace and is promoting peace today - President Aliyev
President Aliyev: We hope Pakistan will join existing, emerging transport routes Azerbaijan
Pakistan one of handful of countries that does not have diplomatic relations with Armenia - Azerbaijani president
From first day of war, Pakistan shown solidarity, support for Azerbaijan - President Aliyev
EU eyes to foster clean energy transition and decarbonisation in Georgia
Kazakhstan records growth in volume of payment services
All news