Launch of the second phase of the Market Test for the LNG Terminal in Alexandroupolis

GASTRADE, a Greek utility company, which develops the Alexandroupolis LNG Terminal (the “Project”), launched on the 10th of January 2020 the second phase of the Market Test for the Project, in accordance with the "Guidelines for management and allocation of capacity on the Alexandroupolis Independent Natural Gas System according to paragraph 6 of article 36 of Directive 2009/73/EC" approved by the National Regulatory Authority for Energy (RAE).  

The Project aims to provide a new gateway for gas supply to south east European markets and will offer to the region security of supply, diversification of gas routes and sources, price flexibility and enhanced competition. It will satisfy growing gas demand in the region in the medium and longer term, provide regional access to LNG and support gas market access and penetration.

For Bulgaria, Romania, Serbia and other markets in Southeast Europe, the Project will transmit natural gas through the Interconnector Greece-Bulgaria which is under construction and the other existing or planned pipelines in the region.

This is the binding bidding phase for capacity reservations in the Project. Companies that have already expressed interest in the first phase of the Market Test are eligible to submit binding offers to GASTRADE. Furthermore, the Guidelines set out the terms under which new interested participants are also allowed to enter this second phase of the Market Test. The deadline for interested participants to submit their offers is 24th of February 2020.

In the first phase of the Market Test, twenty companies submitted relevant Expressions of Interest for a total of up to 12.2 billion cubic meters (bcm) per year of reserved regasification capacity at the floating terminal and delivery to the Greek National Natural Gas Transmission System (“NNGTS”). The Expressions of Interest surpassed the technical capacity of the Project which is designed at 5.5 bcm per year.

GASTRADE expects to receive binding offers from a wide range of participants including gas supply companies, power utilities, other end users, gas distribution companies and traders. After the capacity allocation procedure supervised by RAE, allocated participants will be invited to sign Advanced Reservation Capacity Agreements in accordance with the relevant template approved by RAE.

The Project comprises an offshore floating, storage and regasification unit ("FSRU") for the reception, storage and re-gasification of LNG, which will be stationed 17.6 km offshore the town of Alexandroupolis in Northeastern Greece, and a gas transmission pipeline, through which natural gas will be delivered to the NNGTS and onwards to the final consumers in Greece, Bulgaria, Serbia, North Macedonia, Romania, Turkey and further to Moldova, Ukraine and Hungary.

The FSRU will have a nominal regasification and send-out capacity of 5.5 bcm per year and a peak technical regasification and send-out capacity of 22.8 mil. cubic meters per day.

The tender process for the construction of the Project is underway. The commercial operation date for the Project is planned for Q3 2022. The Project is included in the European Union list of Projects of Common Interest and is fully licensed.

In December 2019, Greek gas company DEPA and GASTRADE signed a final agreement for the acquisition of a 20% share in GASTRADE by DEPA. On 8th of January 2020, BULGARTRANSGAZ, the Bulgarian gas transportation company, concluded terms of an agreement for a 20% participation in GASTRADE.

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