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RUEHBS/USEU BRUSSELS

C O N F I D E N T I A L ATHENS 001366 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 05/22/2016 
TAGS: ENRG GR AL MK
SUBJECT: COPELOUZOS GROUP CHAIRMAN BRIEFS ON ENERGY PLANS 
AFFECTING NORTHERN GREECE, MACEDONIA AND ALBANIA. 
 
 
Classified By: Ambassador Charles Ries for Reasons 1.4 (b,d) 
 
¶1.  (C)  Summary.  Copelouzos Group Chairman Dimitris 
Copelouzos briefed the Ambassador April 27 on his proposal to 
build a "West Macedonia Branch" of the Turkish-Greece-Italy 
(TGI) gas interconnector.  AccordinQto Copelouzos, whose 
firm is closely linked with Gazprom, this could supply 
natural gas to Macedonia, as well as power plants in northern 
Greece and a 300 megawatt plant in Korje, Albania that his 
firm hoped to build.  According to documents Copelouzos 
provided the Ambassador, the branch could also "serve as a 
fuel source for the 150 MW CCGT plant in Vlore that is 
currently under development."  Copelouzos asked for the USG's 
assistance in recommending the project to the Albanian 
government and urging the GOA to establish a workable payment 
plan for the plant.  As for TGI, Copelouzos claimed Gazprom 
was not particularly interested in filling that pipeline with 
its gas, a claim that runs counter to everything we are 
hearing from our GoG contacts.  End Summary. 
 
--------------------------------------------- --- 
A "West Macedonia Trunk Line" Could Provide 
Energy to Macedonia, Northern Greece and Albania 
--------------------------------------------- --- 
 
¶2.  (SBU) Copelouzos estimated the capacity of the West 
Macedonia trunk line at 1-2 bcm, which would be fed out of 
TGI.  Under Greek law, he noted, the state has the first 
right of refusal to build the line.  He argued that a 
turn-key operation without GoG participation would, however, 
be more efficient, proposing his company's joint venture with 
Gazprom, Prometheus, construct the line in cooperation with 
the U.S. firm ContourGlobal.  Copelouzos said he had not yet 
discussed his idea with Greece's semi-privatized energy 
provider (PPC), but said he expected the company to view it 
very positively.  In an aside, Copelouzos noted his firm(s) 
had constructed 70% of PPC's powerplants. 
 
¶3.  (SBU) Copelouzos claimed that the trunk line could have 
major, positive ramifications for power generation in 
northern Greece, Macedonia and Albania.  The provision of gas 
to existing lignite power stations in northern Greece would 
allow the gas to replace expensive and polluting fuel oil in 
slurry with the lignite, and, later, would allow for the 
construction of modern combined cycle plants.  One of these 
plants, in Florina, could supply electricity to Macedonia, 
just 15 kilometers distant.  Copelouzos' proposed plant in 
Korje, Albania would, he said, make a contribution to filling 
the electric power deficit in Greece's northern neighbor. 
According to his plan, the Korje plant would belong to 
Prometheus and he noted it had already signed documents on 
the plant with the Albanian government.  Unfortunately the 
plant had not yet received final GoA approval, something 
Copelouzos hopes to discuss with the current Albanian energy 
minister in May. 
 
¶4.  (SBU)  In closing his presentation on the trunk line, 
Copelouzos asked for Amb's help with the GoA on the Korje 
powerplant, particularly vis--vis the issue of establishing 
a workable payment plan. 
 
------------------------------------------- 
TGI: Gazprom Not Particularly Interested... 
------------------------------------------- 
 
¶5.  (SBU) Copelouzos said the TGI Interconnector is such a 
large pipeline that it could easily accommodate a diverse set 
of gas inputs, including Azeri gas.  He furthermore claimed 
Gazprom did not have the ability to fill TGI, even if it 
wanted to do so.  Although Bluestream I could ramp up quickly 
to 8bcm from the current 4, one had to remember that Turkey 
was to receive 4bcm.  That would leave only 4bcm for TGI, 
which is supposed to deliver 8.5 bcm to Italy.  Copelouzos 
discounted claims Russia could easily meet additional demand 
by constructing another pipeline to Turkey.  He furthermore 
claimed Gazprom did not have a strong motivation to fill TGI, 
as the firm makes less money from gas it sells to Italy than 
gas it sells to Turkey.  Lastly, the fact that Azeris can 
undercut Gazprom gas on basis of price makes it even harder 
for Gazprom to sell into TGI.  In any case, Copelouzos 
claimed to be agnostic on the source of TGI's natural gas 
supplies: "I am a businessman; I just hope decisions on TGI 
are made on the basis of good economic senseQ 
 
------- 
Comment 
------- 
 
¶6.  (C) Copelouzos' claims that Gazprom is not particularly 
interested in filling TGI with its products runs directly 
counter to everything we are hearing from our GoG contacts. 
As recently as May 12, the head of Greece's natural gas 
company, DEPA, told us of his concerns that the Russians were 
going to link the extension of Greece's existing natural gas 
agreement with Russia, which runs out in 2016, with the issue 
of the gas going into TGI.  This issue is likely to be 
discussed during the Greece-Russia energy bilateral meeting 
scheduled for June 9.  We will report on that meeting once we 
have a readout. 
RIES