Gazprom’s networks struggle to expand gas route in southern Europe

There was more at stake than securing a fixed gas supply price for 2022 when the Greek environment and energy minister Kostas Skrekas, accompanied by diplomatic adviser Nikolaos Yiotopoulos, travelled to Saint Petersburg to see Alexei Miller, head of the Russian giant Gazprom, on 7 December. For Moscow, these talks with its Greek partner are vital following Germany’s decision to suspend the certification process for the Russian-German Nord Stream 2 gas pipeline in mid-November. In fact, showing just how important their bilateral relations are, President Vladimir Putin himself invited the Greek prime minister Kyriakos Mitsotakis to his private residence in Sochi the following day.

While for the Greek natural gas company DEPA (Dimosia Epichirisi Paroxis Aeriou) the objective of the talks is to set a price of Russian gas for 2022, for Miller the goal is the reboot of the Turkish Stream, or TurkStream, pipeline extension project inaugurated in 2020. For the moment the pipeline provides Athens with 40% of its gas needs. Extending beyond the Black Sea, this extension would connect Turkey to Greece and then Italy, but the project appears to be at a standstill despite Gazprom’s diverse network in Greece.

A handful of Greek partners          

Gazprom’s trading team is based in London, but the group has numerous Greek partners able to back its position. Since 2017, and more extensively over the past year, the Russian giant has relied on the trading arm of local conglomerate Mytilineos SA. This multi-sector group is led by Evangelos Mytilineos, who has been increasingly critical of the European Union’s energy policy.

Gazprom also has its historical partner in the country to count on, another Greek family conglomerate, Copelouzos Group. The two have been partners in the joint venture Prometheus Gas SA since 1991.

There are also a handful of traders it can call on, the likes of Goran Simic, the current director of Gazprom Neft’s distributor Hermes Oil Trading. Simic ran the Cypriot business intelligence company Intelesys Holdings Ltd from 2007 to 2012.

Turmoil in the Bosporus               

Greece’s regional balance, already conditioned by its rivalry with Turkey, is being pulled as much by a recent military deal with France as by its energy needs requiring a calm path forward with Russia. Nevertheless, even though Russia and Greece adopted a joint action plan in Sochi that presents the broad outlines of their cooperation for 2022 to 2024, though remaining vague about gas supply, Kremlin spokesperson Dmitri Peskov dashed the hopes of Skrekas’ St Petersburg delegation of setting a fixed gas price for 2022 when he was interviewed by Greek TV on 13 December.