Analysis – Alexandroupolis is leading port of interest in Greek regional harbour privatisation

Alexandroupolis, Greece (PortSEurope) September 2, 2019 - Greece's portfolio of 10 regional ports slated for privatisation includes Alexandroupolis, Volos, Rafina, Igoumenitsa, Patras, Heraklion, Elefsina, Lavrion, Corfu and Kavala. The new Greek government aims to speed up the regional port privatisation process, and it is Alexandroupolis which is clearly the primary port of interest for a range of economic and geopolitical reasons. The port is currently operated by state-owned Alexandroupolis Port Authority and the as-yet-undetermined sale, whether concession or equity based, is attracting significant interest. Firstly, due to the port's location, very close to the borders with Turkey and Bulgaria. The Greek utility Gas Trade SA is operating the Alexandroupolis Independent Natural Gas System (INGS) project, a modern, cutting-edge technology FSRU project which comprises an offshore floating unit for the reception, storage and regasification of liquefied natural gas (LNG) and a system of a subsea and an onshore gas transmission pipeline through which the natural gas is shipped into the Greek National Natural Gas System (NNGS) and onwards to the final destination consumers. It includes the construction of an LNG floating power plant by US and Greek business interests. Gastrade, owned by the local Kopelouzos group, which has acquired a stake in it, and GasLog, owned by shipping magnate Panagiotis G. Lebanon, plan to operate an LNG refuelling plant off the coast of Alexandroupolis. Greece is attempting to develop itself as a regional energy hub, taking advantage of a number of regional initiatives including the aforementioned Alexandroupolis gas project; the under construction Trans Adriatic Pipeline (TAP) which will deliver Azeri gas to southern Italy via Greece and Albania as of next year; the proposed East Mediterranean (EastMed) pipeline which if built would deliver Israeli gas to Europe; and the route of the vertical connecting pipeline - the IGB project (Interconnector Greece-Bulgaria) to become operational by 2021. The routes of both TAP and EastMed (proposed) pass through Alexandroupolis. The multimodal port offers four-way combined transport services: by sea, by road, by rail and by air (Alexandroupolis International Airport is less than 6 km away). It is at a point that is now directly connected to the Egnatia Road and the railway line to Thessaloniki, but also to the Turkish and Bulgarian borders. The privatised Piraeus and Thessaloniki ports have developed their container capacity to serve the main European markets. Alexandroupolis sees a more regional opportunity - developing itself as a port to serve northern Greece and other countries in the Balkans. This is helped by the recent increase in rail connections which facilitates intermodal cargo traffic. Regarding geopolitical circumstances, Russian, U.S., European and Chinese interests have been looking at the port. In 2018, two Russian diplomats were expelled from Greece for violating Greek law, and both were well known in Alexandroupolis . They were accused of being linking to bribes offered to local government officials, Orthodox clergymen, members of cultural associations and far-right groups in the north of the country in an attempt to derail the naming agreement signed between the leaders of Greece and Macedonia. This would support Russia's efforts to prevent Macedonia joining NATO and the European Union (EU). Moscow could also be interested in reviving the Bourgas-Alexandroupolis pipeline, born as an alternative to transporting crude oil from Russia to the world via the Bosphorus strait, a congested waterway controlled by Turkey, and linking the Black and Mediterranean Seas. The pipeline was to be built by Russia's Transneft, and Greece, with financial input from Bulgaria, who would have hosted half of the pipeline. Regarding U.S. interests, speaking at the 7th annual Exposec-Defenseworld Conference in Athens last May, U.S. Ambassador to Athens Geoffrey Pyatt said that Greece’s geo-strategic location is key to security and stability in the Southeast Mediterranean. He reiterated Washington's interest in the northern ports of Thessaloniki and Alexandroupoli. “From a security and economic standpoint, it makes sense to further develop the port (Alexandroupolis) to benefit both our strategic relationship and the Greek economy,” Pyatt said. “And in this regard, I remain very focused on finding an American investor, as that port’s privatization moves forward”. The U.S. sees Alexandroupolis as an alternative to the Bosporus Straits that connect the Black Sea to the Mediterranean. The harbour can be expanded and modernised, it is very close to the two Bulgarian Black Sea ports - 370 km from Burgas and 500 km from Varna. And there are already plans for rail and road links with both Bulgarian ports. Washington is a keen supporter of the Trans Adriatic Pipeline (TAP), as an alternative to Russian gas in Europe, and the Alexandroupolis LNG facility, which could become an entry point for U.S. LNG into Europe. Washington is not happy that the privatization of Thessaloniki’s port had given Russian capital a foothold in the port. Now the Americans have set their sights on the port of Alexandroupoli and recent geopolitical shifts and volatility in the wider region have elevated the port’s status. Thessaloniki Port Authority SA (ThPA) was privatised in March 2018 for €1.1 billion, and is now operated by South Europe Gateway Thessaloniki (SEGT), a consortium, in turn, owned by Deutsche Invest Equity Partners GmbH (47%), Terminal Link SAS, part of CMA CGM (33%) and Belterra Investments, controlled by Russian companies (20%). Chinese interest is based on its new Silk Road economic policy. The new Silk Road (part of the Belt and Road initiative also known as One Belt, One Road, or OBOR) is a Chinese economic strategy to seek better access for Chinese-made products in European markets, which includes acquiring stakes in ports and other transport facilities, and cooperation agreements with countries along the Silk Road routes. In recent years, the state owned COSCO Shipping Ports and China Merchants Group have acquired stakes in: Port Said, Egypt; Casablanca and Tangier, Morocco; Marsaxlokk, Malta; Istanbul, Turkey; Piraeus, Greece; Bilbao and Valencia, Spain; Marseille, Nantes, Le Havre and Dunkirk, France; Antwerp and Bruges, Belgium, Rotterdam and the Netherlands. Beijing's expansion shows no sign of slowing down, and China also has active activities, or plans to have, in Georgia, Bulgaria, Croatia, Israel and Lebanon, as well as others. In a new development, Bloomberg reported on September 2 that the China Merchants Group, was in discussion to acquire some of the port interests of French shipping group CMA CGM. The French company's port assets, held by subsidiary Terminal Link, a container terminal operator, include operations in Thessaloniki, Casablanca, Fos and Marsaxlokk. China Merchants Group currently has a 49% stake in Terminal Link. In conclusion, a potentially volatile mix of economic and political interests will keep interest in Alexandroupoli port high, as interested parties fight for control of a port with a seemingly crucial role in the years ahead. Copyright (C) PortSEurope. All Rights Reserved. 2019.

Analysis – Alexandroupolis is leading port of interest in Greek regional harbour privatisation

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Analysis – Alexandroupolis is leading port of interest in Greek regional harbour privatisation

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