Presentation of Albanian Centre for Energy Regulation and Conservation - ACERC
ACERC is a think tank centre with focus on the Albania energy market and its integration in the regional IEM. The Acerc mission base on the in-depth knowledge of EU and regional energy law and policy and strives to provide a qualified contribution to the promotion of the liberalization and effective integration as well as efficient use of energy resources. Acerc main activities briefly consists in build-up collaborations and supports to market players in study researches such as the certificate reports, articles and periodicals. The transfer of high expertise through building-up institutional capacities by national and regional training courses, seminars and conferences. The institutional representation and integration within framework of the forum of Albanian School of Regulation.
The Bulgarian government finds itself in a position where it needs to secure long-term reliable natural gas supplies, after two successive failures in the past few years to get involved in major infrastructure projects, namely the Nabucco and the South Stream pipelines.
During recent discussions with Slovakia and Central European countries, Bulgarian Foreign Affairs Minister Daniel Mitov initiated negotiations include his country in the so-called "EastRing" gas networking infrastructure. EastRing aims to interconnect all countries from the Black Sea up to the Baltic Sea in order to reduce uncertainties in the Eastern European gas market.
According to the Bulgarian point of view, Bulgaria will connect itself with the newly proposed Turkish Stream (Turk Stream) pipeline project, which will then shift north and eastwards, thus creating a natural gas hub in its territory, a long-sought goal. Moreover, stronger interconnections with Turkey would allow Bulgaria to diversify in the mid-term its overall supplies by acquiring not only Russian but also Azeri, Iranian and even LNG-sourced gas from the Turkish transmission system.
Bulgaria, Slovakia, Romania and Hungary are close to signing a memorandum of cooperation for the EastRing project, which envisages a maximum capacity of 40 bcm per annum and can be classified as a large project in a pan-European level. Concurrently the Bulgarian administration strives to forge an solid alliance with Azerbaijan's SOCAR and mulls that a resurrection of Nabucco is on the table, without specifying on the numbers and timetables likely involved.
It has to be noted that SOCAR is determined so far to proceed with its supplies to Turkey and fill in theTrans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline (TAP), with the likely inclusion of the proposed Ionian-Adriatic Pipeline (IAP). Based on the amounts that can be extracted by the Azeri fields and also the domestic consumption trends, it is highly unlikely that the EastRing could have any meaningful supply by Azerbaijan and for the long-term. For the moment, Bulgaria has a pending 1 bcm per annum import contract with Azerbaijan to be enacted after 2020 that would be sourced mainly via the Interconnector Greece-Bulgaria (IGB) which is planned to be ready by that time. Other than that there are no secure supplies or even agreements for larger quantities.
Furthermore, the EU Commission itself has left a window of opportunity open for Gazprom to fill in supplies for the TAP project, which basically means that Bulgaria would be heavily dependent on Russian gas in any case and for the long-term. Additionally, the project will require large-scale interconnection infrastructure and underground storage facilities in all participating counties, plus their immediate neighbours at least, something which requires significant capital and most importantly political will and consensus, which is hard to be achieved since there are many divergent energy interests.
Croatia, for example, has its own national policy that aims to secure supplies via the proposed Krk LNG facility and the aforementioned IAP route. Serbia itself leans into getting involved in the Turkish Stream, hoping that a spur from Greece via FYROM will reach its territory. Hungary has already aligned itself with Gazprom and got an impressive gas price reduction, whilst Austria has a strategic aim to enhance the Baumgarten's gas hub significance which can only be achieved by pragmatic and grand pipeline projects.
All in all, Bulgaria is at a crucial stage where it has to get into terms that it is extremely difficult to achieve its role as a regional hub, while it does not participate physically in any project of tangible value. It is likely that sooner or later Sofia will raise its voice in order to involve itself in the Turkish Stream project, which is the only proposed pipeline that could terminate right at its doorstep and aims to bring about 40 bcm of gas per year for European deliveries.
That potential move of course will not decrease Bulgaria's dependence on Russian imported gas, but there is only one alternative for Bulgaria to really diversify its imports. That is to align itself with Greece and head into the international LNG market by which Greek ports will be used for mass introduction of LNG into Bulgaria.
The above opportunity nevertheless is not really sought by Sofia for basically three reasons. Firstly, it will depend itself to Greece, instead of Russia and the former does not really have to offer any political-geostrategic advantages that potentially Moscow could offer. Secondly, LNG price tends to fluctuate and in particular periods it could be much more expensive than Russian pipeline transferred gas. Thus despite Greek DEPA's continuous and long-term offers to the Bulgarian side, the latter was reluctant to really get involved in such a project. Lastly, Greece itself views Turk Stream positively in principle, while it has already secured a place in TAP, leaving presently LNG option as a secondary one if all other plans go awry.
It can be safely estimated that it is a matter of time, before Bulgaria officially acknowledges its intention of joining Turkish Stream either as an integral part or as a junior partner. In that sense both South Stream and Nabucco will be in sort resurrected and embodied into one single route.
A new Swiss government grant will support Albanian institutions in developing capacities to create a gas market, to successfully implement large investment projects and to benefit from the Trans Adriatic Pipeline (TAP).
Ambassador Beatrice Maser, Director at the Swiss State Secretariat for Economic Affairs (SECO) together with ministers Damian Gjiknuri and Shkëlqim Cani signed a new agreement that commits 6.6 million Euros to develop a domestic gas market, implement the TAP project and manage large infrastructure projects.
Ambassador Maser, said the project and the TAP investment are of a higher strategic importance for Albania. Among the results expected by this contribution she mentioned improved energy security through energy diversification, economic growth through a strengthened investment framework and reduced greenhouse emissions through lower imports of fossil-fuelled energy.
Whereas the Minister of Energy and Industry, Damian Gjiknuri said: “With the Swiss government we now have an intensive programme in diversifying energy sources through this important fund that serves the strategic objective of our country’s gasification”.
As the implementation of the TAP project begins, this latest Swiss contribution aims at improving capacities of state institutions in managing the country’s emerging gas market. Between 2011 and 2013 Switzerland facilitated Albania’s entry into the TAP project by creating the proper framework conditions and laying the ground for a potential gas supply to the country.
The new agreement will aim to improve technical and managerial capacities of the public administration in the new gas sector especially in connection with the TAP project. As a new energy source, gas can greatly contribute to energy security by complementing the current hydro power sources. In addition, the introduction of gas infrastructure has the potential to reduce energy costs and lower imports from fossil-based sources in neighbouring countries, thus contributing to a reduction of greenhouse effects.
Switzerland has supported the energy sector in Albania in the area of dam safety and infrastructure since the early 90-ies and is also considering energy efficiency as an area of intervention. /ibna/
A deal agreed between the country's state-owned power utility, OSHEE, to obtain power directly from the energy producer, KESH, should save Albania millions.
Albania's power utility, OSHEE, has scrapped a tender to buy electricity for March 11th to March 20th , after the country's power generator, KESH, offered to supply it directly with 270 MWh of electricity at a reference price.
A source in the Ministry of Energy told BIRN that the direct sale had saved the indebted OSHEE, which often has to be subsidized by the state, more than 2 million euro for the 20-day period alone.
The direct sale of electricity between the two state-owned companies followed a public outcry after the publication of a BIRN report in February.
This highlighted the fact that OSHEE was buying electricity from energy traders at 57 euro per MWh, while KESH was selling electricity to the same traders for as little as 10 euro per MWh.
Following publication of the report, the opposition Democratic Party accused the government and the public energy companies of holding illegal tenders and urged the general prosecutor’s office to launch a probe.
According to the current model, KESH will supply electricity at a regulated price to OSHEE for the power it distributes to consumers. OSHEE has to buy electricity lost in the grid due to theft or technical losses.
The two companies signed an agreement in early March, which spelled out that when KESH had ample supply, OSHEE would seek to procure electricity from it. Albania’s Energy Regulatory Agency, ERE, approved the deal on March 6th .
The finance ministry has opened an international bid for a 250 million euro partially-guaranteed loan and is seeking to reissue about 300 million euro of sovereign bonds to tackle the budget deficit.
Gjergj Erebara BIRN Tirana
The ministry announced on Sunday that it has received prior approval from the World Bank for a partial guarantee of up to 200 million euro, which will allow it to request a loan from international lenders of up to 250 million euro. Banks have been invited to make their offers by April 1.
The ministry aims to cover its budget deficit for this year through foreign sources instead of domestic banks in order to provide space for private credit growth.
The debt is expected to have low interest rates due to international market conjuncture as well as the partial guarantee issued by the World Bank.
At the same time, Albania intends to issue up to 300 million euro in new sovereign bonds by the end of this year in order to repay its old bonds issued in 2010.
The government wants to benefit from the current very low interest rates in the international bonds market.
Because of the European Central Bank policy of quantitative easing, announced in January, through which the ECB creates new money electronically to buy financial assets, like government bonds, the interest rates for debts issued in euros are at their lowest point in decades.
German and Austrian bonds are traded for less than one per cent while Italian and Spanish bonds are traded for slightly higher than one per cent.
The Albania government’s first-ever sovereign bonds, issued in 2010, had an initial interest of 7.6 per cent and as such, they eat up a disproportional share of the total costs of the foreign debt service of Albania.
The Ministry of Finance aims to issue its new sovereigns with much lower interest rates than the current ones.
However Albania is currently under pressure to issue the new bonds because it doesn’t have any alternative for repaying its current sovereigns, which could affect interest rates.
If successful, the new foreign debts will ease the government demand for domestic debt and will incentivise the banks to lend to private customers. This could be converted into higher economic growth.
Albania’s public debt has increased heavily during the last few years due to sluggish growth and government refusals to rein in spending.
Total government debt reached 978 billion leks (almost seven billion euro) at the end of last year, showing the biggest year-on-year growth since 2009, according to official data from the debt management office.
Currently Albania has one of the highest debts as a percentage of the GDP in the Balkans, at almost 70 per cent.
However, the government has an IMF-supported programme which foresees a sharp decrease in public debt starting from 2016. The programme aims to return economic growth to about 4.5 per cent per year which could allow debt reduction as a percentage of GDP by three percentage points per year.
Geopolitics: The South Stream Pipeline Has Been Replaced by “The Balkan Stream”
Research, March 15, 2015
As Russia begins to
build a pipeline through Macedonia that could form the basis of a revised South
Stream route, the Hungarian President is in talks with Erdogan over financing
this enormous project.
in the Balkans were lamenting the cancellation of the South Stream
project last December, Russia was hard at work laying the foundation
for its replacement, hereafter referred to as ‘Balkan Stream’. The
concept is to connect ‘Turkish Stream’, the Russian pipeline
to Turkey’s Eastern Thrace region, to South Stream’s previously
intended Serbian, Hungarian, and Austrian partners, but detouring
through Greece and Macedonia to compensate for the exclusion
of Bulgaria. While such a strategy was previously only talk, concrete
action was taken this week to transform it into a reality, which
wouldn’t have been possible had Macedonia not beaten back the Color Revolution
attempt that aimed to sabotage the entire thing.
Step By Step
The whole reason that
Balkan Stream was conceived in the first place was because its
predecessor, South Stream, was cancelled last December. Russia took this
decision after Bulgaria (influenced by the EU acting on behalf
of the US) made it impossible to construct the pipeline
through its territory due to a slew of political and legal games
that it was playing. At the time, the author was the first person to write that
a replacement route could realistically go through Greece and Macedonia,
thereby resurrecting the project and fulfilling the pressing energy demands
in Europe that necessitated its creation in the first place. Russia
was quick to move, and in the same breath that it cancelled South
Stream, it announced ‘Turkish Stream’ to partially replace it. This
pipeline will travel under the Black Sea just as South Stream was
intended to, but would instead reach land at Turkey, not Bulgaria.
From there, the Russian government said, European nations could buy gas
from a terminal at the Greco-Turkish border, in what was
interpreted as a vague hint that such purchases could either be LNG or
possibly even the start of a brand new pipeline.
through December, Putin officially suggested during his annual news
conference that the Greek-Macedonian ‘detour’ could represent a solution
to South Stream’s cancellation, provided that there was interest
in his proposal. This was echoed by the Hungarian Foreign Minister
in mid-January, when he said that his country would support the project.
Interpreting this as a greenlight to move forward, Putin discussed
the topic with Viktor Orban during the former’s visit to Budapest
last month. This week was the most monumental in terms of actually
making progress on the project because Stroitransgaz, one of the
companies involved in the original South Stream, announced
on Thursday that it would be building a gas pipeline through Macedonia,
which is set to begin construction this weekend and be completed
by next summer. That same day, the Hungarian President, while
on a four-day visit to Turkey, spoke with Erdogan about a
financing plan for the project, and a day afterwards, the Macedonian
Foreign Minister paid an official visit to Turkey as well, where it
is expected that he’ll discuss the topic, too. Through these series
of diplomatic steps, Balkan Stream made the jump from paper
The Failed Color
This wasn’t supposed
to happen, at least not if the US had gotten its way
in Macedonia last month. Understanding that it’s the crucial bottleneck
through which Balkan Stream must run, Washington wanted to stage a
coup in the country in order to install a new leader that would
reject the project and put an end to the region’s plans for reliable
energy transit. Nikola Gruevski, the Prime Minister of Macedonia, had
earlier broke ranks with his EU partners by refusing to sanction
Russia, in a show of rebellion that the US felt it had
to absolutely put down. For the few past couple of years, it had
contracted the services of former intelligence chief Zoran Verushevsky
in order to illegally wiretap over 20,000 people in the
tiny country of 2 million, including politicians, journalists, and regular
citizens. When it became clear at the end of last summer that South
Stream was being stonewalled by Bulgaria and a new route would likely have
to be streamlined (which geography dictates would obviously have
to go through Macedonia), it activated its intelligence cell
in order to preempt these plans, just in case they would go
forward sometime in the future.
Zoran Zaev, the
leader of the opposition, was given copies of these illegal tapes
in order to blackmail the government, which he attempted to do
from September to November. When Gruevski refused to give
in to the blackmail, Zaev threatened to go public with the
wiretaps and accuse the government of carrying them out, alleging that
they also contained embarrassing political information and insinuating that
this would lead to a Color Revolution. At the end of January, the
Macedonian security services finally arrested Verushevky and a few other
conspirators for plotting a coup, and Zaev had his passport taken
to prevent him from fleeing while the investigation was ongoing.
Verushevsky’s son even attempted to destroy his father’s computer
before police stopped him, yet authorities were able to access the
salvaged hard drive and recover Skype conversations where Verushevky and
another plotter even spoke of starting a civil war in the country
as a result of the blackmail ‘revelations’.
While Zaev attempted
to create an actual Color Revolution last month by encouraging people
to amass in the streets and protest the government, he failed
to garner a consistent and sizeable following, showing that most
Macedonians saw through the gimmick for what it was — a
Ukrainian-styled soft coup attempt. Taking matters further, both Albanian
parties in the country (whose affiliates are estimated to possibly
constitute a quarter of the population) loudly distanced themselves
from Zaev, thereby diminishing the prospects of a return to the
2001 interethnic violence that rocked the country and could have set the stage
for the civil war that the conspirators previously discussed. Russia
evidently feels that the combination of government action, Albanian
loyalty, and popular support has finally stabilized the situation,
since it would not have gone forward with the pipeline’s construction
through Macedonia had it thought that it could be endangered by the
Color Revolution attempt. Accordingly, one can interpret this as Moscow’s
recognition that Washington’s plot ultimately failed.
The Battles Ahead
Despite the obvious
failure of Zaev’s destabilization, serious threats still remain that could
endanger the viability of Balkan Stream. These mostly have to deal
with the susceptibility of Hungary and Serbia to similar Color
Revolution attempts (or a reoccurrence of instability in Macedonia),
as well as the fragility of the Greek government. Also, a plan
needs to be devised as to how the pipeline will comply with the
EU’s Third Energy Package (which mandates the separation of energy suppliers
and distributors), as the failure to have done so was the ‘official
‘reason that South Stream was stonewalled last year. If these difficulties can
be surmounted, which is entirely feasible, then Balkan Stream has the potential
to enrich the region and ensure Europe’s stable energy transit for decades
Azerbaijan's SOCAR seeks company to check feasibility of Albania gas project
Mon Mar 9, 2015 12:51pm GMT
BAKU, March 9 (Reuters) - Azerbaijan state energy company SOCAR plans to announce a tender to find a company to conduct a feasibility study on Albania's gas infrastructure plan as part of European efforts to reduce dependence on gas from Russia.
Albania and Azerbaijan signed a preliminary agreement in December to cooperate in development of an Albanian gas grid as the Balkan country leads construction of the European section of the project to bring Azeri gas to Europe from the Shah Deniz II field in the Caspian Sea.
The so-called southern corridor will bring gas to Turkey and Greece, as well to Italy via Albania and the Adriatic Sea.
"SOCAR will announce this tender in the next three months," Murad Heydarov, adviser to SOCAR's president, told Reuters.
"We should draft the feasibility study before the end of 2015, and if this project is considered effective, we will start Albania's gasification project in March next year."
Heydarov estimated the project's cost at "several hundred million dollars".
Azeri gas could reach southern Europe by the end of this decade through the proposed Trans Adriatic Pipeline and the Trans Anatolian Pipeline.
These pipelines would carry billions of cubic metres of gas a year from Shah Deniz II, one of the world's largest gas fields, which is being developed by a BP-led consortium. (Reporting by Nailia Bagirova; Writing by Margarita Antidze; Editing by David Goodman)
Oil and gas
exploration to reduce import dependence says Montenegro's Economy Minister
Balkans News -
progressive taxation, competition and lack of discretion are crucial principles
defining the Montenegrin Government’s approach to oil and gas industry, Economy
Minister Vladimir Kavarić said at the opening of the First Adriatic Oil &
Gas Summit, which takes place on 10 - 11 March in Budva, Montenegro.
which is reflected in defining the rules of the game, through laws and enabling
regulations and publicly available documents, including also model contracts,
to a maximum extent possible. Progressive taxation, precisely such tax policy
model where the state is to collect so called resource only when a company
starts operating with profit from activities ring-fenced to Montenegro. We
believe that the competition is healthy in any field. Finally, we believe that
discretionary decision-making is not the best solution, therefore we have tried
and will continue to keep the discretionary decision-making at minimum possible
level," Minister Kavarić explained.
added that Montenegro is aware that it has to compete with other countries
devoted to responsible management and efficient use of hydrocarbons.
are trying to create best environment that will attract the best, and we are
striving to encourage competition in this business, as we also know that
private companies show their best in terms of innovation, approache and
delivery, when facing a competitive pressure," Economy Minister Kavarić
said that this activity does not recognise national frontiers, as geology does
not understand borders.
a success of our neighbours is only going to amplify opportunities for
Montenegro and for other neighboursas well, in attracting companies to take
part in this sector. Exploration of oil and gas in Montenegroso far, as well as
activities in the Adriatic, have indicate large prospectivity of the region.
The basic prerequisites are proven for oil ang gas production to take place in
the south Adriatic geological basin, while direct confirmation of this fact is
the production in Albanian, Croatian and Italian part of the basin,"
Minister Kavarić noted.
it comes to hydrocarbon exploration’s compatibility with Montenegro’s other
development policies in the field of tourism and environmental protection, Mr
Kavarić emphasised that an economy development, not even sustainable
development as a central concept of our age, is not possible without the energy
we have included standards for this area, which are even more demanding then
generally applied environmental protection standards for other sectors of the
economy," he underscored.
Economy Minister Ivan Vrdoljak, who also attended the Budva’s oil and gas
summit, commended the Montenegrin- Croatian cooperation and the communication
established between the two line ministries. As an EU member state, Croatia
strongly supports the region on its European path, fully aware that the
progress is achievable only if there are no outstanding issues within the
neighbours, he stressed.
Vrdoljak added that Croatia will sign a contract on oil and gas exploitation by
late May. This will be the first contract of that type in the history of the
country, which will be a step forward towards energy independence of the
country, which will enable fulfilment of its own needs, while creating
opportunities for export.
Vrdoljak commented on the current demands for a referendum on oil and gas
exploration. He noted he would support a referendum on how to reduce the number
of tankers with imported oil entering the Adriatic, as Croatia wish to reduce
risks and protect the environment, adding there is no possibility to hold a
referendum before signing contracts with companies.
of tourism, the Croatian Economy Minister said that Istra is the most famous
tourist destinations in Croatia, and that the most gas has been pumped from
these areas. He reiterated the Croatia has researched the oil potential of the
Adriatic for 40 years, but now, through the process, the best technologies in
the field of environmental protection will be implemented.
obligation, as a member of the EU, is to implement strict regulations in order
to protect the environment. If there is any solution from the EU legislation,
we will include it, Minister Vrdoljak concluded.
Adriatic Oil & Gas Summit is organised by the Global Event Partners,
specialist international event organiser in the oil and gas industry. The
Summit is a unique opportunity for interested parties to attend such event,
organised for the first time in Montenegro reports the Govenrment.
EU & WBs / Albania Energy Investment Updates is part of the Albanian Centre for Energy Regulation and Conservation - ACERC. The project is going under the direction of the Adv. Lorenc Gordani, PhD, that is also committed as the Executive Director and Legal Energy Market Advisor at the ACERC.
Main areas of the expertise of director covers the academic didactics, the applied research and legal strategic expertise in the EU energy law and policy for industry, government, international institution and interest groups with particular focus on the market design and related policy issues, concerning the promotion of a sustainable integration of energy market in the WBs.