Interview with Kostis Sifnaios, Managing Director, Gastrade, Greece

Interview with Kostis Sifnaios, Managing Director, Gastrade, Greece


Gastrade has set a precedent as Greece’s first private company to receive an independent gas natural system license. With the successful set up its first LNG terminal, the Alexandropupolis floating FSRU which arrived in December last year, a new milestone has been passed, taking Greece one step closer to being a strategic regional gas hub. Can you explain the importance of the FSRU for Greece, and for Europe’s energy system on its quest for independence and enhanced security of supplies?

We have been designing this project for several years and it will come on stream in the next couple of months. Its objective is to provide diversification of supply and routes of energy to the wider areas of the Southeastern region, from Greece all the way to Romania, Serbia and Bulgaria. It will also open supply routes further Northeast, towards Moldova, Ukraine and the central European market, such as Hungary and Slovakia. This is a project which is part of a wider initiative called the Vertical Corridor Initiative, which aims to provide energy and gas now, and hydrogen in the future, from South to North.

The project offers security of supply, not in the context of the Russian invasion of Ukraine, because the project was designed, and its final investment decision was made before the start of the War. Even back then this was a region which was very much dependent on Russian gas supply. There was a need for alternatives even before the war began. Following the outbreak of the war, we have seen a lot of major European states realizing how dangerous it was to be so dependent on Russia. We had already identified that previously, and now the value of the project is even more evident as an independent energy gateway for this region.

The idea is to be able to substitute a significant part of the Russian supply in the region, to offer alternative pricing and to enhance the energy to gas liquidity in this region. This is a prerequisite and it supports the establishment and operation of a regional liquid energy hub. This requires enhanced interconnectivity in this area, as the region used to be made up of smaller and more isolated markets. Integrating this market to a material size that will allow trading of gas will eventually be to the benefit of the end consumers, as it will increase the competitiveness of the product, rather than being a totally monopolistic region.


In a recent interview, you said that the project was also demonstrating how “energy can become a tool for prosperity, peace, and solidarity.” Can you elaborate on that? What are the geopolitical implications of the project? 

In April 2022, when Russia discontinued the supply of gas to the area, Bulgaria turned to Greece as being its alternative for its gas supply. In May 2022, when the construction of the project started, we had an inaugural event in Alexandroupolis, where 5 Heads of State attended: namely, the Heads of State of Greece, North Macedonia, Bulgaria, Serbia and the Head of the European Council, Mr. Charles Michel. The US Ambassador, Mr. Geoffrey Pyatt was also present. Instead of using energy as a weapon of animosity and competition in the region, energy must be used as a tool for bringing economies and governments together for closer cooperation.

Greece has a major geographical and geopolitical advantage because of its location and, as such, can offer entry for supply to all these areas which are quite isolated. This project really emphasizes this geostrategic and political approach. We have seen Bulgaria be a shareholder, and Serbia and North Macedonia be stakeholders in the project, and, in turn, securing their own independent supply. The project brings the whole region together rather than being a dividing factor. We want to expand on that, so we are in contact with Moldova and Ukraine to create roots of supply from Greece to Ukraine and also to the center of Europe.


With the success of privatizing this kind of project, do you think more private projects will be licensed to modernize Greece’s energy sector and bring in more infrastructure in the sector?

We need to be selective in the development of infrastructure, which needs to be developed and sized in line with the market size and the requirements looking forward. This is not the first private project in that respect. The Greek national TSO has been privatized, as has the IPTO, the electricity operator. We have seen other projects developed by private entities. I think the State has a very important role to play in the landscaping of energy, but it doesn’t have to own or necessarily be the developer of these projects if energy is a wider tool. I think the Governments have a role to play. They should design the frame and the umbrella under which the different projects will be developed, However, it should be the private entities or potentially cooperation between the private and the state sectors that proceed with the development.


Let’s turn out sight to Gastrade. The company’s shareholders are quite varied and include both regional state-run gas players and private LNG shippers. Can you give us a quick introduction of who Gastrade is, and how it’s been leveraging its shareholders to build capacities and add expertise to its projects? How have each of its partners contributed?

Gastrade has five shareholders who each have the same percentage. They each have 20%. It is a full equity with equal rights and obligations of the 5 shareholders and I think the balance between state owned and private companies is about 50/50. There are state companies from Greece and Bulgaria, private companies like GasLog, who are one of the largest shipping companies with funds. Also, GasLog has Blackrock which is one of the major shareholders so you can see the trust of international funds in the project. There are companies like DEFSA who are also privatized and major TSOs from Italy, Belgium, and Spain who are also indirectly a part of the project. It is a mix.

All the shareholders bring added value to the project. It’s not a financial investment as such, but it is engaging shareholders who have something material and critical to add to the project like commercial viability, engineering expertise or shipping expertise. Therefore, we have shareholders who ensure, altogether, that the project can be developed and operated in a sustainable way.


In recent years, Greece has been accelerating projects and infrastructure deployment to materialize its position as the EU energy hub for the region. Several pipelines and interconnectors have already been set up and many more projects are underway to create a gas gateway into Europe, such as Gastrade’s Alexandroupolis LNG project. What makes Greece the perfect market for its gas transmission plans?

Greece offers optionality because it has access to a variety of sources. It has access to globalization for which LNG is very much a global commodity like oil used to be. A pipeline is from Point A to Point B, whereas when you have access to LNG, you have more sources and worldwide access. I think this is the advantage of Greece when it comes down to gas. With regard to power and electricity, there are factors to be considered, such as the potential for solar and wind, accessibility to other markets in production places like Northern Africa, which gives Greece an advantage. It is the location advantage together with the interconnections which allow the integration of the markets to capitalize on this advantage.


What implications does Slovakia, Moldova and Ukraine recently joining Europe’s Vertical Gas Corridor have, and what does it mean for Greece’s role in the project?

In this Vertical Gas Corridor Initiative, Greece has a key role because it is the entry point. It is the access to LNG. Looking at Moldova and Ukraine, it is evident that there will be a great need for reconstruction and energy once the war is over. Given that it is unlikely that the supply from Russia will continue for these markets, it is quite important to have new routes. It is the same for Slovakia and Hungary, markets traditionally almost 100% dependent on Russia for gas, so they need to create new routes of supply. For Greece, it is important because it gives an entry point, and it now has wider access to markets.


Very recently LNG and its impact on the environment has come under scrutiny. What efforts is Gastrade making to make sure the Alexandroupolis INGS project carries a low carbon footprint? What kind of sustainable models or technologies has it introduced in its operations?

We need to see how the project is impacting the carbon footprint. The countries in this region such as Greece, Bulgaria, North Macedonia, and to a large extent, Serbia and Romania have traditionally been dependent on coal power production. Breaking in new gas infrastructure is already a huge benefit to the carbon footprint as gas substitutes carbon, to a large extent. Both in term of pollutants and emissions, gas is a much better product than carbon. The gas industry is looking into the future of greener and zero carbon fuels. Some of the technologies are there, some are not there yet. I think there is a transition route to greener technologies such as ammonia or hydrogen, but I think that it will take several years. The existing gas infrastructure is looking into what mix of products, such as hydrogen or other green products could help improve the carbon footprint.


The USA has traditionally been a big investor in Greece. In your opinion, what more could be done for Greek and US players to work more together to build up the local energy sector? What kinds of opportunities do see for US companies?

Although we have not seen any real investment by the US in energy, we have seen a lot of political support and supply from the US. In Greece about 50% of the supply comes from the US. I think it is important to see that US energy companies invest in Greece and in this transformation. Particularly, when we do investigate the gas sector, it is important for the US to join and to match the supply with investment in term of accessing the routes like the Vertical Corridor Routes. There is a big commercial interest for US supplies to sell and supply more US LNG into these markets.


How would you summarize your vision for the role Greece could have in energy?  

Greece is not an energy exporter in oil or gas because we do not produce gas or oil. It is an entry point, a gateway. When it comes to green energy, Greece is an exporter because we produce a lot of green energy but with regard to gas, it is not an exporter. It is an enabler for transition, for transmission and for diversification.


Do you see any big projects or initiatives where Greece would welcome the participation of US companies and investors in particular?

The privatization of infrastructure could be a very attractive prospect for American investors, whether transportation infrastructure or energy infrastructure. The fact that Greece went to investment grade recently certainly makes a difference and more foreign investors will be likely to keep an eye on the country than previously.


What would be your final message to the readers of USA Today?

Gastrade is a fine good example of an original corporation, and we are keen to see that expand into further initiatives. Through Gastrade, Greece can enhance its role as a regional gateway for energy and LNG through the existing terminal at Alexandroupolis and through a second terminal, the Thrace project, that has been licensed and can offer adequate import capacity to access further north mainly with a focus on Ukraine and Central Europe.