Alexandroupolis FSRU

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Alexandroupolis FSRU Terminal is a proposed floating storage and regasification unit (FSRU) import terminal in the Aegean Sea, off the coast of Greece.

Location

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Project details

• Operator: Gastrade
• Owner: Gastrade
• Parent company: Copelouzos Group [20%]; GasLog Cyprus Investments [20%]; DEPA Commercial [20%]; Bulgartransgaz [20%]; DESFA [20%]
• Location: South-west of Alexandroupolis in the Aegean Sea, offshore Greece
• Coordinates: 40.774730, 25.842736 (approximate)
• Capacity: 4 mtpa, 5.5 bcm/y
• Cost: €360 million (US$378 million)
• Financing: €592,419 grant from the EU's Connecting Europe Facility; €166.7 million grant from the European Structural and Investment Funds; €283 million in three bond issues arranged by the National Bank of Greece; €106 million grant from the European Commission
• Status: Construction
• Type: Import
• FID status: FID taken
• Start year: 2024
  • Formerly 2023
• Associated infrastructure: Alexandroupolis INGS Terminal Pipeline

Background

Alexandroupolis Independent Natural Gas System (INGS) has planned to develop a floating LNG terminal approximately 17.6 km south-west of Alexandroupolis, Greece in the Aegean Sea. The proposal date is presumed to be February 2017. The project is being developed by Gastrade. According to the industry website Offshore Technology, "A front-end engineering design (FEED) study for the development was completed in September 2017." The European Commission (EC) co-funded 50% of the study via the Connecting Europe Facility (CEF) programme with a grant of €592,419. The final investment decision (FID) for the €370 million (US$419 million) initiative was to have been taken in 2018 but had still not been taken as of the end of November 2021. Construction is expected to be completed within 24 months. The INGS project is aimed at improving energy security across the region and promoting the development of a competitive regional gas trading hub. It will connect to the Greek National Natural Gas System, the Gas Interconnector Greece - Bulgaria (IGB), and the Trans-Adriatic Gas Pipeline.

Alexandroupolis INGS will include a floating storage and regasification unit (FSRU) with the ability to transport, store and convert LNG into natural gas. It will also be equipped with a subsea and onshore gas transmission system. The floating terminal will have an incoming LNG transfer rate of 10,000 cubic metres per hour (m³/h), a storage capacity of 170,000m³ and a maximum regasification capacity of 700,000 normal cubic metres per hour (Nm³/h). It is expected to receive LNG from carriers through its loading arms and store it in cryogenic tanks. The LNG will then be transferred to the subsea pipeline via a submerged turret and flexible risers."

Also according to the industry website Offshore Technology, "The floating unit will be moored at a distance of 17.6km south-west of Alexandroupolis, and 10km from the shore of the village of Makri in water depths of approximately 40m. The mooring system will comprise a submerged mooring turret and an anchorage system that will include mooring lines and suction anchors. Its turret will hold the unit in a fixed position, enabling 360° rotation based on the direction of the sea currents and waves. The mooring turret’s anchoring system will consist of eight suction anchors, which will ensure the stability and safety of the floating unit in all weather conditions. The mooring system can be disconnected for easy maintenance, as well as for emergency purposes. Regasified LNG will be transported onshore via a gas transmission system consisting of a subsea pipeline and an onshore pipeline. Twin 14in-diameter flexible risers will transmit natural gas from the floating unit’s loading turret to the pipeline end manifold (PLEM) located on the seabed. The PLEM will connect to the 28 km-long, 30in-diameter subsea Alexandroupolis INGS Terminal Pipeline. The pipeline will be laid in water depths of more than 15m and will have a maximum operating pressure of 1,450lb per square inch, or 9,997 kilopascals. The pipeline will be buried in a trench for a distance of 4km as the sea depth decreases to less than 15m for safety reasons. The onshore pipeline will be laid on the coastline of the Apalos area, connecting to the Kipi-Komotini branch of the Greek National Natural Gas System (NNGS) near the Amphitriti village. A new entry station will be built by natural gas operator DESFA near the existing NNGS Alexandroupolis exit station, which is currently being operated by the company. Wood Group was granted the FEED contract for the project. Metocean Services International (MSI) and BMT were jointly awarded a deal to carry out environmental monitoring system (EMS) studies. The two companies will also be responsible for delivering the metocean criteria study in support of the terminal design. The project will be directly connected to the NNGS of Greece and is intended to supply natural gas to the Greek market. It will provide access to south-eastern European markets through various interconnection pipelines. The INGS project is also expected to support the European Union’s (EU) plan to diversify supply sources and routes, and has been included in the third list of Projects of Common Interest (2017-2019)."

The first phase of the Market Test for the capacity commitment at the Alexandroupolis terminal was completed successfully on December 31, 2018. According to an announcement from Gastrade, twenty companies submitted relevant Expression of Interests for a total of up to 12.2 billion cubic meters/year of regasification capacity reservation at the floating terminal and delivery to the Greek National Natural Gas Transmission System. With the successful completion of the Market Test, the project is proceeding to the next Binding Phase.

Opposition groups have cited the low utilization rate of Greece's only operating LNG terminal, the Revithoussa LNG Terminal, to call into question the necessity of an additional terminal. According to Food and Water Europe's 2019 profile of gas use in Greece, "...between January 2012 and March 2019 Revithoussa LNG Terminal operated at only about 14% of its capacity. Even in 2011, when gas demand peaked in Greece, the terminal was used at less than 25% of its capacity.

In August and November 2020 DEPA and Bulgartransgaz and DESFA, respectively, acquired each a 20% stake in Gastrade, the Greek gas company which is proposing an FSRU project offshore Alexandroupolis. The FSRU would be located 17.6 km southwest of the port of Alexandroupolis. For several years, the project was supported by the EU as a Project of Common Interest. In November 2021, the project was not included in the 5th PCI list published by the European Commission.

In January 2022, Gastrade announced that it had taken a FID for the project, also stating that the terminal would become operational by the end of 2023. The FID was welcomed by United States Ambassador to Greece, Geoffrey Pyatt.

In February 2022, Gastrade launched a tender for the construction of the terminal.

In May 2022, Gastrade began construction of the terminal. At an event to mark the start of implementing the project, it was confirmed that the FSRU will be able to regasify 5.5 bcm/y of LNG and store 153,500 m3. Planned to begin operating by the end of 2023, Gastrade said that contracts were in place for up to 60% of the project's technical regasification capacity.

In June 2022, the National Bank of Greece successfully arranged €283 million in debt for the project via three bond issues, suggesting that the overall cost of the project may have risen to approximately €450 million.

In October 2023, Gastrade announced that the European Commission had approved, under EU state aid rules, a further grant of €106 million to support the completion of the project's construction by the end of 2023.

In early January 2024, LNG Prime reported that the facility was expected to receive its commissioning cargo on January 20.

On February 19, 2024, the facility received its commission cargo. The FSRU is expected to begin commercial operations later this quarter, after completing testing activities.

As of July 2024, Alexandroupolis FSRU still had not yet begun commercial operations. Gastrade encountered a technical issue related the pipeline during commissioning. The facility was expected to begin commercial operations as of October 1, 2024, or sooner if the issue were resolved earlier.

Ownership

In January 2020, Bulgaria's Cabinet approved state-owned gas grid operator Bulgartransgaz to take a 20 percent stake in the terminal. Bulgartransgaz will acquire the stake from Gastrade, the company developing the project, but no financial details of the transaction were disclosed. The government statement said only that Bulgartransgaz was authorized to carry out investment spending corresponding to its 20 percent stake.

In August 2020, the prime ministers of Greece and Bulgaria signed the agreement for Bulgartransgaz to acquire the 20 percent stake in Gastrade. The project aims to decrease central European reliance on Russian gas. Greek prime minister Kyriakos Mitsotakis commented, “This large investment will help our ultimate goal of turning our easternmost port into a global energy hub. The benefits are also geopolitical: a new axis of diversification of natural gas routes is being created not only for Bulgaria but also for central Europe which will no longer have a single source of energy.”

In December 2020, it was announced that North Macedonia will take a 10% stake in the project.

Opposition

In December 2023, five environmental organizations requested that the Greek Supreme Court annul its environmental approval for the project, because of its position within an ecologically sensitive marine protected area. The organizations noted that "the new LNG terminal blatantly ignores Greek legislation which explicitly forbids the construction of such industrial units within Natura 2000 sites."