“GREEK PRIORITIES IN ENERGY SECTOR”
Ladies and Gentlemen,
Let me first congratulate the organizers of this important conference, which focuses on oil & gas developments in the Eastern Mediterranean Basin as well as the Black and the Caspian Sea region.
Energy resources and their management is a fundamental factor in the economic, social, cultural and political development of states. Moreover it is a crucial factor of international relations. Accordingly, I am pleased that we have placed today’s Conference, under the auspices of the Ministry of Environment, Energy and Climate Change.
In designing policies today, Governments have to balance the need for environmental protection and sustainable development, with affordable energy prices and the security of supply.
In recognition of the new complexity, the Greek government of Prime-Minister George Papandreou, decided to unify the Energy & Environmental Ministries under a new administrative structure called the Ministry of Environment, Energy and Climate Change.
This was done, so as to ensure, that we have the right coordination between these issues and that we can develop Energy Policy based on Green Growth, energy efficiency and the development of renewables.
Greece plays an important role in shaping and promoting the Energy policy of the European Union. Before I describe to you some of our initiatives, allow me to refer to our actions regarding the economy.
During recent months the high public debt and deficit of the Greek economy has been reported at length by the international media. Let me stress, that this Government immediately took the required steps and contributed decisively to the creation of a financial Support Mechanism with the support of the ECB, Commission and the IMF.
The goal for this was not to ensure the necessary resources with appropriate rates only for Greece but in accordance with the principle of solidarity, for each Euro zone Member State as the need would arise. Together with these organizations we have agreed to take specific measures in order to reinforce the domestic economic system and set the basis for the further stable growth of our economy.
However, we are convinced that this crisis cannot be resolved purely on the basis of austerity measures. Rather what we need is sustainable economic development. And such development requires Greece to be more competitive, with sound exports and to be more attractive for important investments. Let me stress a few facts:
1. Since joining the EU in 1981, Greece has demonstrated consistently high growth rates,
2. According to the IMF, in terms of income per capita, Greece remains amongst the 25-30 richest states in the world,
3. The level of income disparity is lower in Greece than in Spain, Portugal and the United States.
4. In Greece, education and medical care is free for all citizens. We do not consider social expenditure as a waste of state resources, because guaranteeing high social standards for our citizens is not a luxury.
Our plans for further economic development certainly include the energy sector. Our goal is to implement reforms which will lead to Sustainable Green Growth.
We are encouraging investments in renewables and recently adopted a new law which reforms procedures and facilitates investors.
While promoting the utilization of Renewables both in terms of Total Energy Consumption, and in terms of electricity generation, is for our Government a priority, we know very well that European demand for hydrocarbons, especially natural gas, is expected to expand by approximately 40% over the next twenty years.
The growth in gas consumption is coupled in Europe with a dramatic drop in domestic production and reserves. The EU’s net import dependency will grow from 60% in 2007 to over 80% by 2030.
In Greece, gas demand is also expected to grow. Today we require about 3.5 BCM but by 2020 this figure is expected to rise to 6-7 BCM. My Government has taken steps both to increase investments in the gas sector from abroad and to speed up the exploration of possible local resources of hydrocarbons.
We will be establishing a specialized body authorized to organize the necessary call for tenders, based on transparency and EU standards, to ensure that the most responsible investors undertake the search for hydrocarbons.
The significant success of our neighbors in this regard, the interest of international companies to undertake the investment risks in order to find oil and gas in our country, justify our policy to renew our efforts.
Since last month the basic regulatory framework, including the National Natural Gas Transmission System Code, has been put into effect.
South East Europe is a region strategically placed at the cross-roads of major energy routes. This is why investment in projects in this region is important to the EU as a whole.
The creations of sub-sea high voltage inter –connections between Northern Africa & Greece as well as gas pipe-lines between Greece-Bulgaria and Greece-Italy will provide urgently needed supplies that would sustain the region’s economic development once Balkan markets start to exit from the current crisis circle.
Today we have three entry points: Kipi, on the Greece/Turkish border, Promachonas on the Greece/Bulgaria border and of course our LNG terminal in Revythoussa near Athens. In the north of Greece we are also evaluating the possibility for underground storage.
We already receive natural gas from Azerbaijan, Russia and LNG from all over the world. A series of large international projects that we are working on means that we are becoming the gateway for the entry of natural gas into Europe.
In Greece, we are particularly active in developing 2 of the actions defined as priorities in the EU’s 2008 Action Plan: the Southern Gas Corridor and the increase of LNG imports to Europe.
(1)_The Southern Gas Corridor region lies at the very epicentre of our diversification policy which aims to access the natural gas resources of the Caspian Sea region and the Middle East. The EU has recognized the Nabucco and the ITGI pipelines as priority projects of equal urgency that further the aforementioned goal.
Moreover the long-term growth of European gas demand means that we need new pipelines from traditional suppliers, such as Russia, a reality that has been recently stressed by the EU Energy Commissioner Gunther Oettinger. That is why Greece has always considered that South Steam, which will be based primarily on Russian resources, is not antagonistic to any of the Southern Corridor Projects.
The Interconnector between Turkey-Greece-Italy is an important means for furthering European diversification. In 2009 Greece covered around 20% of its gas needs through the TGI. Greece expects to import up to 3 BCM/y for its domestic needs, transport at least 1 bcm to Bulgaria via the IGB pipeline, while transiting around 6-7 BCM via the IGI to Italy.
We are also working to conclude a 4-Party Agreement between Azerbaijan, Turkey, Greece and Italy, whose primary objective will be to underline the political importance we attach to the diversification of gas sources and routes and our commitment to obtain the necessary supplies from the Caspian region.
Trans Adriatic Pipeline
We are also interested in the Trans Adriatic Pipeline, and I was pleased to have met with leaders of this project. We consider that it is a project which can contribute to the Southern Corridor policy of the European Union.
South Stream: This project contributes to the principle of diversification of routing, since it will be transiting gas from Russia and potentially Central Asia to Europe via the Black Sea. It is expected to be completed by 2015. As is the case with the ITGI, Greece estimates that it could keep 2-3 BCM in order to cover its projected rise in consumption. Another 5-6 BCM would be transited towards Italy. On 7 June Russia’s Gazprom and DESFA, the Greek System Operator, signed in Moscow the agreement establishing the Joint Venture Company, South Stream Greece S.A., that will build, own and operate the Greek section of the project.
IGB: Greece and Bulgaria have agreed to establish a Joint Venture Company that will build a 170-km Interconnector between the two countries from Komotini to Stara Zagora, which will in turn link the Greek-Bulgarian-Romanian and Hungarian natural gas systems allowing for the reserve flow of natural gas from the Aegean to the Danube.
Progress on the project’s realization, which is supported by a €45 million E.U. grant, is moving fast so that the line is commissioned by early 2013. This important 3 to 5 bcm/y capacity pipeline can be filled not only via the existing LNG regasification terminal in Revythousa, but also through the ITG pipeline. Therefore IGB could effectively combine Caspian pipe gas with Arab LNG.
The third component of this strategy is the construction of adequate LNG and gas storage facilities.
In this regard, Greece is going forward with the expansion of its LNG installations in Revythousa that will increase existing storage capacity by almost 70% in 2015. Greece is also evaluating projects that have been proposed by DEPA, a plan to construct a new LNG terminal in the North region that would also serve –through the IGB project- the needs, not only of Greece, but of several of our E.U. and Balkan partners. We are also evaluating projects proposed by private investors for example the Astakos Port complex.
The recent agreement between Turkey and Azerbaijan, which opens the way for the tendering of Shah Deniz 2 gas, along with the participation of France’s EDF in the South Stream project, indicate that the EU’s Energy Security Strategy is at a critical stage.
Greece will remain active in the support of its interests and will work systematically with its partners in Europe, Russia, the Caspian region and the Middle East so as to enhance Europe’s security of energy supply to the mutual benefit of all exporting and transit countries.
Thank you for your attention