Kosovo and liquid gas in the Balkans: How are you rejecting Albin Kurti, the American gas pipeline?

The Kosovo government sees the idea of gasification with liquid American gas through a port in Greece, as a very interesting “option”, but says it needs more time to study the case and process of switching to renewable energy, including from the geopolitical perspective, before making a decision on a gas-fueled thermal power plant, as proposed by the US.

The giant American project envisions the extent of liquid gas in the Balkans, including Kosovo, thus preventing the Russian gas monopoly. Kosovo, which bases energy security mainly on coal reserves, would have to have a particular interest in this, because it would bring energy diversification and use of natural gas to the industry. Kosovo depends almost entirely on two outdated lignite thermal power plants: Kosova A and Kosovo B. This is very problematic during the cold winter, as most people in Kosovo rely on electricity for heating, resulting in a significant increase in electricity consumption during the season. Air pollution levels reach record levels in winter. Pristina often enters the list of ten most polluted cities in the world.

This presents a major problem for the quality of life, and the government has failed to offer solutions to change the problem. Kosovo must replace or reduce coal consumption and co-ordinate with its international partners and allies to join the pipeline. The vast majority of electricity in Kosovo is currently produced by two Kosova A and Kosovo B thermal power plants, which produce up to 880MW. While Kosovo will have to modernise its energy production and diversify power supply, natural gas and renewable resources present potential market opportunities

The Milenium Challenge Corporation, one of the gas pipeline funders, has made it clear the interest to negotiate with the Kurti government on the issue since May of this year. But there does not seem to be any movement by the Kosovo government on this, while neighbouring countries, like Northern Macedonia, have already signed agreements.

In July 2021, the governments of Northern Macedonia and Greece signed an agreement to build a natural gas cross-border pipeline worth 100m euros (118.7m euros). The North Macedonia government will contribute about 54m euros from the total investment. The pipeline will help northern Macedonia secure gas supply and liquidity to the gas market, as well as provide access to natural gas through the South Gas Corridor. <

Thousands of people will be employed during construction of the interconector, which will link the two countries' gas distribution networks, Greek Environment and Energy Minister Costas Skrekas. The state-owned Northern Macedonia company National Energy Resources (NER) and Greek gas operator DESFA are expected to sign an agreement that will ensure the construction of the interconector.

At the beginning of this year, The NER and the state-owned power generation company in northern Macedonia ESM signed a memorandum of co-operation to invest in a project to build a floating natural liquid gas terminal (LNG) and a gas thermal power plant outside the coastal city of Alexandroupolis in Greece. Northern Macedonia plans to invest over 380m euros in 25% stake in next 800 thermal power plant More than 370m euros in 10% shares in the LNG terminal, Prime Minister Zoran Zaev said in March.

The LNG terminal in Alexandroupolis, which is expected to become operational in early 2023, is scheduled to include a storage and floating regasting unit of LNG (FSRU), which will be a new, independent energy port for Southeast and Central European markets. The station will have a guard capacity of 170,000 cubic metres and a natural gas supply capacity that will exceed 5.5 billion cubic metres annually.

The South Gas Corridor includes the Trans Adriatic Gas pipeline (TAP), the South Caucasus pipeline (SCP) and the Trans Anatolian pipeline (TANAP). Connecting to TANAP at Greece's border with Turkey, TAP lies in northern Greece, Albania and the Adriatic Sea before reaching Italy's southern coast, where it is linked to the Italian natural gas network.

In June of this year, the European Commission approved (KE) 166.7m euros in support of Greece for construction of the liquid gas terminal in Alexandroupolis, which will use American gas. Deputy Executive Chairman Margrethe Vestager, responsible for competition policy, said the new LNG terminal in Alexandroupolis will improve gas supply and infrastructure not only in Greece, but throughout the region of Southeast Europe. This will contribute to the achievement of EU goals in terms of security and diversification of energy supply.

Given its strategic importance for the diversification of natural gas supplies to the Southeast European region, the LNG terminal in Alexandroupolis is included in the European Project's lists of Common Interests in the Energy Sector, “Trans-European Energy Framework, which dates back to 2013. <

The terminal is expected to improve supply security not only for Greece, but also for Bulgaria and for the wider Southeast European region, as it will constitute a new potential source of energy that will be linked to the gas pipeline between Greece and Bulgaria (“IGB”). The commission approved public support for the IGB project, which is currently under construction, according to assistance regulations. Greek authorities have confirmed that Terminal LNG would be suitable for use in hydrogen, and that the project would contribute to a cleaner energy mix through increased gas use instead of coal.

The project will be funded by the Greek state using European Structural and Investment Fund (“ESIF”), particularly controlled funds and managed directly by Greece under the 2014-2020 Partnership Development Agreement. Support will take the form of a direct grant worth $166.7m. The assistant beneficiary is Gastrade SA, a company in which the Greek gas company (DEPA) and the Bulgarian Gaz Broadcasting System Operator (Bulgartransgaz EAD) participate. Gastrade will be the promoter and operator of the new terminal.

The commission found that assistance is appropriate and necessary, as the project would not be realised without public support. In this context, the Commission took into account the project's involvement in the Joint Interested Projects list in the energy sector.

Furthermore, to ensure that there is no excessive compensation, the project promoter will be obliged to return the state some of the revenue generated by the terminal if they exceed a certain limited level. Furthermore, the National Energy Regulatory has imposed some safeguard clauses to prevent a rise in the market position of the biggest gas operators involved in the project, such as a limit to the LNG part that can be reserved on terminal by such players.

The new terminal's (“FSRU”) depositation unit will be located approximately 17.6km from the town of Alexandroupolis in northern Greece, at a distance to the open sea approximately 10km from the nearest coast. F The SRU will have an overall supply capacity of 5.5 billion cubic metres bcm annually. <

The underwater and land parts of the gas transmission pipeline -- 24km and 4km respectively -- will transmit gas from the floating unit to the Greek natural gas network. The South Gas Corridor, SGC, a pipeline controlled by Azerbaijan and Turkey, will supply Southeast Europe with gas from Azerbaijan and pass through Turkey, Greece, Albania and Italy.

This is an important step towards improving Europe's energy security, especially Southeast Europe, because it will reduce dependence on Russian gas and diversify supplies. <

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