WIREDGOV

EXPERT COMMENT

Relying on imports of US LNG carries economic and environmental risk. In the long term, Greece should invest in its considerable clean energy infrastructure.

US and European energy officials gather in Athens on 6 November at the 6th Partnership for Transatlantic Energy Cooperation (P-TEC). The summit aims to discuss Southeastern Europe’s revamped energy agenda, focusing on the acceleration of US Liquid Natural Gas (LNG) flows into the region. Greece, host of the summit, is positioning itself as a regional energy hub, doubling down on LNG infrastructure investment in pursuit of an upgraded geopolitical role. 

The ‘energy hub’ narrative stems from the energy crisis of recent years, which saw European countries turn to LNG – much of it shipped from the US – to compensate for dramatically reduced Russian pipeline inflows. Since then, Europe’s regasification capacity – allowing it to convert LNG back into gas for distribution – has increased by 32 per cent. Gas consumption in the EU decreased by 17 per cent due to REPowerEU energy efficiency and clean energy initiatives. 

New EU sanctions against Russia, targeting the complete phase out of Russian LNG by 2027, emphasize the urgent need for alternative supply, especially as the last Russian pipeline to Europe through Turkey goes offline by 2028. Greece’s strategic position, at the intersection of continents and a gateway to the Balkans, bolsters its candidacy as a suitable hub. 

US imports stand to play a leading role in this project. July’s EU–US trade deal featured a pledge that the EU would purchase $750 billion of US energy products over three years. Meanwhile, the US and Qatar are pressuring the EU to loosen climate regulations to permit greater LNG flows.

Against this backdrop, Greece is developing two new import terminals, in addition to the existing facilities at Alexandroupolis and Revithoussa (Attica). The intention is that Greece will become the source of new LNG supplies to the region via the ‘Vertical Corridor’, a pipeline network passing from Greece through Bulgaria, Romania, and Moldova to Ukraine. This route recently became more attractive, after participating countries multilaterally reduced their transit tariffs to compete with a northern route from Lithuania and Poland. 

However, while the ‘energy hub’ project will make an important contribution in the short term and could upgrade Greece’s geopolitical role, long-term reliance on US LNG carries significant economic and environmental risk.

Click here to continue reading the full version of this Expert Comment on the Chatham House website.