Snam’s plans for the future of DESFA
Greek gas grid operator DESFA is of major strategic importance for the broader natural gas market, as its network runs along the Southern Gas Corridor to the heart of the European Union, where most new routes bringing the commodity to central European markets will pass, Marco Alvera tells Kathimerini.
The chief executive of Italy’s Snam, which along with Enagas and Fluxys are taking control of DESFA, says the three companies are key players in the Southern Corridor, building new interconnections that will make Europe’s supply safer and more competitive. He stresses that the business of gas is a daily exercise in geography.
Snam is the leader of the joint venture that acquired a 66 percent stake in DESFA. What was its motivation?
Snam is a company valued at 25 billion euros, a global leader in the gas infrastructure field, with more than 40,000 kilometers of pipeline in six countries. We are a key player in the European energy union – Southern Corridor, building new interconnections to make European supply more secure, liquid and competitive. DESFA fits our strategic and international development criteria as Greece is located along the southern gas route to the EU where most of the new routes for the supply of natural gas from new producer countries (Central Asia, Middle East and East Med) to Europe are expected to pass. Snam, Enagas and Fluxys will be able to create new opportunities for the development of Greece’s gas infrastructure system in the coming years, fully realizing the potential of Greece as a natural gas hub, which will further leverage the development of the domestic market as well as new transit initiatives. The country will progressively strengthen its key-role in the realization of the Energy Union to which Snam, as well as Enagas and Fluxys, are deeply committed.
Snam, Fluxys and Enagas are also shareholders in the Trans Adriatic Pipeline (TAP). Are there synergies between the two projects?
The presence of the consortium within DESFA will accelerate the transfer of technical and operational capabilities and know-how as required for the performance by DESFA of the operation and management activities for TAP in the Greek section of the pipeline. Greece will enhance security of supply in the wider region, making use of its strategic position as a potential European gateway for gas streaming from the Mediterranean Sea, Middle East and Central Asia. However, for the moment we are looking forward to the conclusion of the deal, eager to put into effect our ambitious project for DESFA and the Greek energy sector.
What are your plans for the development of DESFA?
DESFA already foresees significant investments in its business plan (around 330 million euros up to 2023) and we are fully committed to supporting the company in achieving ambitious targets in the region. Through DESFA Snam would foster the integration of the gas markets in order to develop a single gas hub, supporting liquidity, transparency and price competitiveness. Snam will also deploy its experience and know-how in Compressed Natural Gas (CNG) and renewable gas in transport and in the Small Scale LNG applications both for onshore (trucks) and the marine transportation sector. These applications will contribute significantly to the reduction of utilization of pollutant fuels in the transportation sector thus helping reduce CO2 and other pollutants emissions, reducing costs for the population and the growth of local industrial activities and know how. DESFA is going to play a role of paramount importance in the energy map of the region that we commit to strengthen by implementing an ambitious investment program. Capitalizing on DESFA’s strong asset base as well as its well-educated and motivated employees will be the main pillar of our strategy.
DESFA’s privatization has also been something of a geopolitical game. Do you agree?
The gas industry is a sort of a daily exercise in… geography. If we examine a global map, we understand that almost every pipeline from around Europe is coming to Europe. Apart from Russia, the future for gas will come from the southeast. Today gas is streaming from the Caspian Sea and Azerbaijan, there is a lot of gas discovered in Israel, Egypt and we know that the world’s largest gas fields are between Qatar and Iran. We should not overlook, though, that the DESFA deal upgrades the role of Greece as a gateway to the wider region of southern Europe and the Balkans, together with the TAP, the expected vertical axis and the LNG Facilities at Revythoussa.
How will you ensure DESFA provides cost-effective services to users so that the Greek market can be further developed?
The consortium includes three gas infrastructure operators with unrivaled operational and commercial know-how in transmission, storage and LNG, combined with a thorough understanding of the challenges facing the Greek market and of the opportunities it has to offer. We are willing to support DESFA with this experience and expertise to give shape to the energy transition in Greece through both existing and new gas technologies. Snam, Enagas and Fluxys are indeed front-runners in promoting innovative uses of gas through their participation to various initiatives at EU level.
Thus, we should address the current challenges, such as the decrease in gas demand for electricity generation due to competition by coal and the still big share of oil in transport and in the islands, aiming at increasing the utilization rate of the infrastructure through gas market expansion. Additionally, cost-effective services could be offered by ensuring unrestricted access to natural gas for regions not connected to the energy grid. Our targets include development of small-scale LNG applications, establishing wholesale gas market, expanding interconnections as well as the network to new areas. Without doubt, competitiveness and energy security supply that we are committed to enrich constitute the keystone of the growth of the Greek market and economy.
