Photo: Courtesy of Gastrade

EU approves Alexandroupolis LNG terminal funding

The European Commission has approved €166.7 million ($ 198.9 million) Greek support measure for the construction of a new LNG terminal in Alexandroupolis.

EU approves Alexandroupolis LNG terminal funding
Courtesy of Gastrade

Alexandroupolis Independent Natural Gas System (INGS) plans to develop a floating LNG terminal southwest of Alexandroupolis, Greece in the Aegean Sea. The project is being developed by the Greek company Gastrade.

The Floating Storage Regasification Unit (FSRU) will have an overall delivery capacity of 5.5 billion cubic metres per year. The subsea and onshore sections of the gas transmission pipeline will transmit LNG from the floating unit to the Greek natural gas network.

The project will be financed by the Greek State using European Structural and Investment Funds (ESIF), notably funds directly controlled and managed by Greece under the 2014-2020 Partnership Agreement for the Development.

The terminal is to help secure and diversify energy supply in Greece and in the region of South East Europe. The Greek Authorities have confirmed that the LNG Terminal would be apt to use for hydrogen and that the project would contribute to cleaner energy.

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The EU support will take the form of a direct grant amounting to €166.7 million ($ 198.9 million) given to Gastrade, in which the Greek gas incumbent (DEPA) and the Bulgarian gas Transmission System Operator (Bulgartransgaz EAD) hold a participation.

Greece has previouslyy notified the Commission of its plans to support the construction of the LNG terminal. Given its strategic importance, the LNG terminal in Alexandroupolis has been included in the lists of European Project of Common Interest in the energy sector, based on the EU TEN-E (“Trans-European Network for Energy”) rules since 2013.

The EU Commission approved public support for the IGB project, which is currently under construction, under EU State aid rules in November 2018.

The Commission found that the aid is appropriate and necessary, as the project would not be carried out without public support. The Commission took into account the inclusion of the project in the list of Projects of Common Interest in the energy sector.

The EU Commission concluded that the measure is in line with EU State aid rules, as it will further security and diversification of energy supply, notably in the South-Eastern European region, without unduly distorting competition.