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Newsletter July 2013


Greece to Secure Major Pipeline Benefits

Prime Minister says the TAP natural gas project constitutes the best financial news the country has had in a decade.

The official announcement on June 28, 2013 that the consortium operating the Shah Deniz II natural gas reserve in Azerbaijan had chosen the Trans Adriatic Pipeline (TAP) has formally laid the groundwork for the creation of the South Stream project that the European Union has been discussing for over 10 years. Its significance for Greece is great, as Prime Minister Antonis Samaras noted, referring to it as one of the biggest projects ever in Southern Europe.

The pipeline will run across northern Greece, transmitting Azeri gas to Central Europe, and will bring foreign direct investment of some 1.5 billion Euro to Greece. The premier said it is a project that “sets Greece firmly on the map of gas pipelines and energy supply across Europe.”

He said that it represents a “significant vote of confidence” in Greece and its prospects, and that “the ‘disaster scenarios’ concerning Greece and for a Grexit will definitely be terminated.”

Mr. Samaras characterised the TAP news as “the most significant, positive economic development concerning our country within the last 10 years,” and noted that it will enable Greece “to become, in addition an energy transport hub, an energy producer and exporter.”

A study by the Foundation for Economic and Industrial Research (IOBE) expects the benefit to the Greek economy in the next 50 years to come to 17-18 billion Euro. The construction work, which will start next spring, will create 8,000-10,000 jobs while the operation of the pipeline will mean 4,300 jobs for the next 50 years.

What is more important, according to IOBE, is whether Greek companies will embrace TAP and participate actively in it. The foundation also expects major benefits for the economy of northern Greece, as an estimated 60 percent of the gross added value—or 11 billion Euros—will benefit the region.

Deputy Minister of Environment, Energy and Climate Change, Asimakis Papageorgiou revealed that the Host Government Agreement Athens has signed includes an option for a 5 percent participation in the TAP consortium after the start of its commercial operation, expected in 2019.

He also said Greece will be the first country to receive Azeri gas via TAP as the Public Gas Corporation (DEPA) has asked for an annual quantity of 1 billion cubic meters, at a price far lower than what it currently pays Russian firm Gazprom and Azeri rival Botas.

Cosco Plans New 224 Million-Euro Investment in Piraeus

Investment project would propel Piraeus to leading port in the Mediterranean.

Greek Prime Minister Antonis Samaras announced, in the presence of the COSCO President Captain Wei Jiafu, that COSCO plans to implement a new 224 million-Euro investment in Pier III, to make Piraeus the number one port in the Mediterranean.

This investment is not included in the original contract for the extension of the western section of pier III and will result in the creation of an additional 500 jobs.

According to Prime Minister Samaras, COSCO has invested 340 million Euro to date. "We're in the midst of a new trade era which will bring projects worth 224 million Euro to build the western part of Pier III and will create 500 permanent jobs and 200 additional positions for the three-year duration of the construction," the Prime Minister said.

As mentioned by the Prime Minister, if COSCO proceeds with the new investment they will have spent 580 million Euro to upgrade the port of Piraeus, the annual capacity will reach 7 million containers (calculated and Pier I managed PPA), and the port will employ 3,000 workers.

Captain Wei said that the 116,000 containers handled by the Greek subsidiary of COSCO (PCT SA) in the first year of the contract increased to 2.1 million in 2012, and this year moved up to 2.5 million containers. According to Captain Wei, "COSCO will increase the flow of goods to Greece, will bring more containers, which will be forwarded to Europe by rail, in which we expressed our interest in our meeting with the Prime Minister."

Captain Wei was referring to the privatisation of TRAINOSE, Greece’s national train company.

Regarding the new investment, Captain Wei said: "we want to invest further in Pier III, in the western part, which will increase the volume of containers to over 5 million and will make Piraeus the number one port of the Mediterranean."