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EastMed-Poseidon Project


PRESS RELEASE October 1, 2022:

IGI POSEIDON, a joint venture of EDISON S.p.A. and DEPA International Projects AS, announces that its subsidiary ICGB AD today started commercial operation of the Greece-Bulgaria Interconnection pipeline (IGB).

The IGB pipeline, developed by IGI Poseidon in partnership with Bulgarian Energy Holding, will be able to transport from the fourth quarter of 2022, from 3 to 5 billion cubic meters of gas from the southern corridor (Caspian Sea, LNG from Greek terminals, East Mediterranean) connecting Greece to Bulgaria and connecting, through the Bulgarian network, the whole South-Eastern Europe.

The project fully satisfies the strategy, promoted over the years by the European Community, of sustainability in the energy transition, of increasing the differentiation of sources and routes, contributing to the security of supply and the competitiveness of the markets.

The IGB gas pipeline demonstrates its high strategic value in light of the supply criticalities, which arose downstream of the Russian-Ukrainian conflict, ensuring new sources for the Balkan area.

IGB is 182 km long with a diameter of 800 mm (32”) and runs vertically from South to North between Komotini in Greece and Stara Zagora in Bulgaria.

Transport will be technically assured by the interconnection points in Greece with the TAP and DESFA networks and in Bulgaria with the BULGARTRANGAZ network.

The pipeline benefited from European support for its technical, commercial, administrative, financial development and for its construction due to its strategic value. The project, in line with the European regulatory framework, required an investment of about 250 MEur and was financed, in addition to the shareholders IGI Poseidon and BEH contributions, with European EEPR (45 MEur), ESIF funds assigned to Bulgaria (39 MEur) and with an EIB loan (110 MEur).

IGI Poseidon would like to thank the Bulgarian and Greek Governments for the constant attention and support to the project as well as the following institutions and authorities for their fundamental contribution to this achievement:

The directorates of the European Community: DG-Ener and DG-Comp for support in obtaining European funds, "regulatory compliance", obtaining the "State Aid Clearance" on the financial structure.

the Greek "RAE" and Bulgarian "EWRC" authorities for their constant support to "regulatory compliance", in obtaining the necessary authorizations for the transport of gas and for the commercial structure of IGB.

The Greek and Bulgarian Ministries of Finance for the achievement of intergovernmental tax agreements (IGA) for the correct application of the taxation of a European cross-border project.

The Bulgarian Ministry of Finance for the support provided for obtaining the EIB loan and the "State Aid Clearance" on the financial structure.

The Bulgarian Ministry of Energy for the constant general support in obtaining the result as a party interested in the implementation of the IGB strategy.

Fabrizio Mattana CEO of IGI Poseidon stated :"The operation of IGB represents a great achievement for IGI Poseidon and its shareholders. Today’s announcement confirms the ability deliver complex projects and, in this turbulent international framework, it makes clear the value of infrastructures aimed at diversification to guarantee the security of European supplies." Kostantinos Xifaras, Chairman of IGI Poseidon said “We are proud that our Company, IGI Poseidon, is ready to contribute effectively to the security of supply in the South- East Europe, as the current and peculiar circumstances demonstrated the substantial need for diversification. The operation of the IGB Pipeline enhances the geopolitical position of Greece as well as strengthens EU’s energy market”.

EastMed-Poseidon Pipeline: a direct interconnection between sources and markets

A European strategic project, confirmed technically feasible and economically competitive

- The strategic relevance: Project of Common Interest (PCI) since 2013 and now included in the RePowerEU Plan

- The most mature project in the area: today in the final authorisation and engineering phase with completion targeted by the end of 2022. Expected commercial operation date in 2027

- A strategic route: direct connection between Europe and Israeli sources avoiding transit risks

- Coherent with the energy transition: in line with Europe's mid-term strategy, the project leads the way for offshore hydrogen transportation

Read the latest IGI press release on DNV feasibility statement


- Italy-Israel length: ~2000 km

- Transport capacity: 11-20 Bmc/y

- Direct connection from Levantin Basin to EU market

- Access to new H2 production basins

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The levantine gas sources will be sufficient and available in 3 years

Substantial gas volumes able to contribute effectively to the diversification of European imports

Opportunities in the area

- Israeli gas fields will increase current productions by additional 20 Bcm/year within 3 years

- The available volumes, confirmed by local E&P players, will be sufficient for the development of new export infrastructures in addition to, and not in competition with, the existing ones

- The construction of the pipeline would also facilitate the development of Cyprus' gas sources

- Italy and Greece could also guarantee availability and transportation of these volumes to Central Europe and Balkans

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The European strategy
phase out from the dependence on the Russian supply system by 2027

Europe will have to replace Russian gas supplies of 150 Bcm/year (33% of demand) and 30 Bcm/year (40%) respectively, and ensure system security during the whole energy transition period

- Since 2011, important interconnections with Russia have been realised for a total of ~140 bcm/year (Nordstream 1 & 2 110 bcm/y and TurkStream 32 bcm/y)

- Mediterranean area has seen, otherwise, a limited infrastructure development (TAP 10 bcm/y and MedGaz 10 bcm/y)

- The RePowerEU plan aims to establish long-term partnerships with reliable suppliers and diversify gas routes

New pipelines 1970-2010

2010 Import/demand share

Gas via Mediterranean
Europe 13%
Italy 45%

Russian gas
Europe 27%
Italy 18%

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New pipelines 2011-2022

2019 Import/demand share

Gas via Mediterranean
Europe 9%
Italy 26%

Russian gas
Europe 41%
Italy 45%

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Technical feasibility confirmed and technology in line with the state of the art

Feasibility confirmed by both leading industry companies and international certification entities

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Technical challenges already faced

- ~2,000 km total length, shorter than the Azeri chain, comparable to the Norwegian one

- 800 km main offshore section, less than NordStream and TurkStream

- 2,200 m average depth of the main section, in line with TurkStream and Medgaz

- 3,000 m the max water depth, only for 10 km, as pipelines in operation in the Gulf of Mexico

- 18 months to lay the offshore section, in line with TurkStream

A competitive and efficient investment

The initiative is able to ensure stable long-term supplies with less exposure to global market price fluctuations

- Most efficient solution for transporting gas from the Mediterranean to European markets

- Total investment of 6 B€, lower than LNG chains with equal capacity (10 Bcm/y): liquefaction plant 5-6 B€ + regas terminal ~1 B€ + shipping

- Competitive transport tariff, optimised on distance between sources and markets, equal to 2,000 km (global LNG market > 6,000 km)

- The project could also allow connected markets to diversify price signals (compared to global LNG market)

- Financial support from the EU (as a PCI project) would further increase competitiveness.


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Benefits for Europe and the Mediterranean

In the current geopolitical scenario, EastMed-Poseidon is a key project for the diversification of national and European supplies

New long-term partnerships with reliable suppliers

- EastMed-Poseidon is included in the list of Projects of Common Interest (PCI) since 2013 and has recently been confirmed in March 2022 by the European Commission

- Thanks to its PCI status, the project benefits of fast-track authorisation procedures

- The project is also part of the REPowerEU plan and will advantage from relevant financial instruments

- The cost-benefit analysis, carried out by the Association of European TSOs (ENTSOG), has repeatedly confirmed the positive impact of the project with possible reductions in the final energy prices for connected markets

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EastMed-Poseidon: a unique and inclusive opportunity for the system

The project represents an option of high strategic value for European energy security

-> Europe, in addition to mitigating the short-term emergency, will have to implement medium and long-term solutions that ensure a stable substitution of Russian volumes
-> The Eastern Mediterranean today does not have infrastructures capable of exporting all the volumes available in the area
-> EastMed-Poseidon is an essential project not in competition with the LNG infrastructure in Egypt, today already exporting to global markets
-> The infrastructure is a mature and feasible project within the same timeframe as other proposed supply solutions (2027)
-> EastMed-Poseidon is designed to transport hydrogen, a key element of Europe's energy transition
-> Involved countries will benefit from a connection to close and stable gas sources, anchoring their energy markets to price signals not only dependent to global LNG dynamics

Project Promoters

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IGI Poseidon S.A., is a Greek infrastructures development company founded in 2008 and formed through a joint venture of Depa International Projects S.A and Edison S.p.A. IGI Poseidon S.A. promotes the development of the EastMed-Poseidon Pipeline and participates in the development and construction of the IGB gas pipeline that will come into operation in 2022 and will connect Greece and Bulgaria.