Last week (June 18-19), the “South East Europe Energy Dialogue” (SEEED) successfully convened in Thessaloniki for the third consecutive year. The International conference that was organized by the Institute of Energy for South East Europe (IENE) in cooperation with the World Energy Council (WEC), was held under the auspices and with the support of the Greek Ministries of Development and Foreign Affairs. The Sponsors of the event included Greece’s PPC (Lead Sponsor Company); EGL (Sponsor); and Siemens, DEPA and DESFA (Supporters). Media partners were the “Kathimerini” daily newspaper, the International Herald Tribune, the New Europe newspaper and the websites Energia.gr and SeeNews.
More than 120 participants and 50 speakers attended the conference including senior government officials, business executives and numerous experts on energy issues from more than 15 different countries. Apart from the strong participation from countries of the region, many participants and speakers also came from oil and natural gas producing countries, such as Russia, Kazakhstan and Iran. The focus of this year’s meeting was the identification of the threats and the opportunities in the energy markets among the global financial crisis. Specifically, the prime interest was the economic and geopolitical environment in SE Europe; fostering closer relations between the countries of the region; the security of energy supply; the role of the Balkans as an energy transit region; the liberalization of the regional energy markets; the consolidation of the electricity and gas markets; and the prospects of “green energy” in the region.
Dr.
John Desypris, Chairman of IENE, at his keynote speech addressed the impact of the current economic crisis on investments, with particular emphasis on energy security and the diversification of sources. The Executive Director of IENE Mr.
Costis Stambolis in his introductory remarks affirmed the goals of the Energy Dialogue and underlined the impact of the global financial crisis on the prices of energy, raw materials and electricity while he stressed the need for increased security of supply in the region.
Very important was the speech by the Regional Coordinator of the World Energy Council (WEC), Mr.
Slav Slavov, who noted, inter alia, the need for secure energy supplies at low prices, especially in SE Europe. “The security of energy supply is at the top of the WEC priorities”, said Mr.
Slavov, noting that emphasis should be given to the diversification of sources and the development of additional infrastructure.
Of particular interest was the speech of the General Secretary of the Greek Ministry of Development, Mr.
Constantine Moussouroulis, who talked about the continuing crisis in the energy sector due to the huge increase in demand and the lack of sufficient infrastructure. “The crisis should be an opportunity for strengthening the infrastructure”, Mr.
Moussouroulis said, noting that the top priority of the Greek Government is to upgrade the natural gas infrastructure (eg new interconnection with Bulgaria and the expansion of the LNG terminal in Revithoussa) and the implementation of a national energy saving strategy.
Mr.
Peter Poptchev, Ambassador at large for Energy and Climate Change and Nabucco Coordinator for the Ministry of Foreign Affairs of Bulgaria, stressed the need for strengthening the cooperation between the countries of SE Europe. Prof.
Pantelis Kapros, professor at the National Technical University of Athens and Chairman of the Scientific Committee of IENE, presented his research models on the regional energy sector conducted on behalf of the EU. Prof. Kapros’ current estimates show a significant drop in the future energy demand in the region when compared with estimates made before the financial crisis - two years ago.
The Charge d’ Affaires of the Russian embassy in Greece, Mr.
Michael Savva, stressed the need for flexibility of supply and he suggested the increase in the capacities of the pipelines, the construction of new storage facilities and the improvement of the legal framework for cross-border energy cooperation.
Mr.
Richard Hall, from the International Association of Oil and Gas Producers, remarked the importance of strong relations between Europe and the oil and gas producing countries. Mr. Marc Seris, director of PFC Energy for Europe, FSU and Africa, noted the positive outlook for Europe despite the global financial crisis.
The first day of the conference concluded with a series of presentations on the role of the Balkan countries as transit points to the EU and the feasibility of the proposed routes for oil and natural gas supply.
Specifically, Mr.
Gokhan Yardim, General Manager of the Turkish firm “ADG Natural Gas Consultancy Company”, stressed the important role of Turkey in SE Europe and its strategic interests. According to his presentation, the 2008 gas consumption in Turkey amounted to 36.8 billion cubic meters while the domestic distribution network serves 56 cities. Mr.
Yardim noted that the demand in Turkey is covered by six suppliers (Nigeria, Algeria, Iran, Azerbaijan, Russia and spot LNG).
Ms.
Thea Khitarishvili, Senior Expert from the Energy Charter Secretariat in Brussels briefly presented the Energy Charter Treaty principles and then elaborated on the importance of SE Europe as a Corridor for Energy Supplies to Europe. Mr.
Milan Zdravkovic of JP SRBIJAGAS talked about the aspirations of Serbia to become a transit point for natural gas to the main European Markets, while Mr.
Nicholas Katsis, director of Regulatory Affairs and Strategic Planning of DESFA reported on the existing gas network in Greece and related projects especially the ITGI Italy, Greece, Turkey gas pipeline. Mr.
Rosen Simitchiev from the Bulgarian Energy Holding EAD talked about the role of Bulgaria in the gas market of SE Europe and the interconnetions with Greece, Bulgaria and Turkey. Mr.
Simitchiev stressed the important role of the Greece - Bulgaria interconnector between the cities of Komotini and Haskovo.
Particularly important was the presentation of Mr.
Alexei Biteryakov, Head of contracts and pricing for Gazprom Export, who expressed his optimism regarding the increase of European natural gas demand while he stressed the importance of SE Europe, where the markets according to Gazprom’s assessments will continue to grow; in 2008, according to Gazprom’s estimates the gas supplies to Europe amounted to 36.0 billion cubic meters. However, as a result of the current economic crisis, natural gas consumption in Europe fell by 6.9% in the fourth quarter of 2008 and by 5.6% in the first quarter of 2009. Finally, regarding the progress of the South Stream pipeline, Mr.
Biteryakov estimated the completion of the pipeline in mid 2015.
Mr.
Maulen Namazbekov, Director of Energy Focus and executive officer of Kazenergy, noted that the proven oil reserves of Kazakhstan currently stand at 5.5 billion tones or 39.8 billion barrels and estimated reserves exceed 17 billion tons and 124.3 billion barrels. Mr.
Namazbekov estimated that production at the Kashagan oil field - which is the largest discovery in 30 years - will begin in 2015 while the total oil production of Kazakhstan is expected to reach 70 million tons annually in 2010 and 110 million tones in 2015.
The contribution of Dr.
Narsi Ghorban, Research Director of International Institute for Caspian Studies in Tehran, which in his absence was presented by Mr.
Costis Stambolis, highlighted the large natural gas potential of Iran; Iran’s reserves are estimated at about 29.6 trillion cubic meters and are the second largest in the world. The natural gas production of the country currently amounts to 116.3 billion cubic meters and is expected to reach 185 billion cubic meters by 2010, according to government estimates. In his presentation Dr.
Ghorban underlined the plans of the Iranian government to promote the construction of cross-border pipelines to supply Europe with gas, one of them bypassing Turkey and reaching the East Mediterranean via an underwater path.
In a parallel session, Ms.
Fiona Riddoch, Managing Director of Cogen Europe, presented an overview of the state of CHP in Europe. Furthermore, Mr.
Alvaro Pinto of Cogen presented the current situation in Portugal - where within 15 months CHP production has tripled - while Mr.
Costas Theofylaktos, Board Member of the Hellenic Association of CHP plants, addressed the situation in Europe, focusing on Turkey, where the installed CHP capacity has increased by 1200% in the last 15 years. Finally, Ms.
Tatiana Tsirakopoulou of Endesa Hellas presented the Greek legal framework of the past 15 years regarding CHP installations. Following the presentations a lively discussion took place focusing on issues relating to the expansion of cogeneration in of Europe and Greece.
At the second day of the conference, Dr.
Ioannis Abatzis, G&G Manager of “Aegean Energy” analyzed the state of oil and gas production in Greece. He also referred to the new infrastructure being build and exploration efforts realized by “Aegean Energy” in the Prinos field in northern Greece. Dr.
Ampatzis was quite optimistic noting that production - currently about 1,400 barrels/day - will soon reach about 7,000 barrels/day.
Mr.
Solon Kassinis, Director of the Energy Agency of the Cypriot Ministry of Commerce, Industry and Tourism addressed the licensing for offshore exploration in Cyprus. Mr.
Kassinis mentioned that the second licensing round is expected to begin in late 2009 or early 2010, and many international groups (Chevron, Shell, ExxonMobil, Total, etc.) have already expressed interest. Mr.
Vasil Ruykov, Attorney at law with Tabakov, Tabakova & Partners Law Office, made a very detailed presentation of the prospecting and exploration licensing regime in Bulgaria.
Mr.
Christos Dimas, General Manager of the “ELPE - Thrace” consortium, gave a presentation on the progress of the Burgas - Alexandroupolis pipeline. The presentations were followed by a discussion on synergies and cooperation in the oil sector and on the role of the new oil that is expected to start flowing through the Black Sea from both Russia and Kazakhstan as early as 2013.
At the following session, regarding the electricity market liberalization, all the speakers agreed on the importance of establishing clear rules, both on national and regional level. Mr.
Nenad Stefanovic, electricity expert for AERS Serbia, talked about the Coordinated Auction Office (CAO) initiative - also known as the Stock Exchange of Energy; CAO is the body that will unite the electricity markets in 13 countries of Eastern and Southeastern Europe. Dr.
Evangelos Lekatsas, Chairman of the Greek system operator (HTSO) stressed the importance of market integration but he also highlighted the significant technical, political and institutional obstacles. Ms
Chryssoula Argyriou, of the European Commission referred to the Third EU Energy Package and the new institutional framework which promotes electricity market liberalization, the strengthening of national regulatory authorities and supports innovative renewable energy applications.
Mr.
Michalis Thomadakis, Deputy-Chairman of RAE, presented an overview of the gas market in the region of Southeast Europe stressing the importance of the new energy corridors but also underlined the inadequate legal framework and lack of appropriate infrastructure. Mr.
Thomadakis stressed that in the coming years the demand for gas in the region of Southeast Europe will increase sharply and perhaps disproportionately to the amount of available suppliers; he also underlined the crucial role that Greece can play as a transit point. Finally, Mr.
Thomadakis described the vicious circle created by inadequate legislation, low investment rates and reduced supply resulting in high prices of energy products.
The proceedings of the 3rd Energy Dialogue concluded with a session dedicated to the green energy its long-term prospects. Prof.
Mustafa Tiris, Director of the Energy Institute at the TUBITAK Marmara Research Centre, analyzed the potential for Renewable energy in several countries of the wider region, highlighting the advantages of RES over conventional forms of energy. Mr.
Kaloyan Kanev, from 2EC Ltd, Bulgaria, addressed the current situation and the market perspectives of RES development in Bulgaria underlining the relatively low regulatory risk and the existence of competitive feed-in tariffs and transparent pricing mechanisms. Dr.
Tudor Constantinescu from Romania, described the challenges and opportunities for Renewable Energy and Energy Efficiency projects in Romania. Dr.
Constantinescu presented with detail the country’s renewable potential along with the current legal and regulatory framework. Prof.
Emmanuel Kakaras, professor at the University of Athens reported on carbon dioxide (CO2) capture and storage technologies stressing the effectiveness of such applications. Prof. Kakaras indicated several areas in Greece where large quantities of CO2 could be safely stored. Finally, Prof.
Michael Fytikas referred to the rich geothermal potential that remains untapped in the region of south-eastern Europe and he talked about the numerous geothermal applications.
The conclusions and recommendations of the 3rd SE Europe Energy Dialogue will be finalized shortly by the Scientific Committee of the Conference and will be posted soon at IENE’s website.