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Thursday, December 29, 2011

Key to Greece's long-term economic survival, if not revival : Energy

An enhanced and expanded energy industry could buoy Greece economically in the not-too-distant future. In DER SPIEGEL, Paul Hader surveys a number of energy-related initiatives in Hellas, from Project Helios, which would turn the country's 300 days of sunshine into 10 gigawatts of power, to wind-farms in the Aegean, offshore oil-drilling, and finally serving as a major natural gas hub between suppliers to the east and energy-hungry Western Europe. Some excerpts from Hader's report follows.

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In a September report called "Greece 10 Years Ahead," the consulting firm McKinsey & Co. suggests that the energy sector could provide some relief. Jobs in the sector should rise to 360,000 by 2021, up from 240,000 in 2010, the study forecast. It also said that energy would be the second largest growth opportunity behind tourism in a scenario which foresees the country adding $59 billion worth of annual GDP to its economy by 2021. Such development, the report notes, won't make Greece an energy behemoth but it would still go "a long way towards curbing the large deficits currently crippling the economy."

Beyond oil, however, Greece is hoping to become a major natural gas hub in coming years. There are currently several oil and gas pipelines in the works that would traverse southern Europe from the Caspian Basin and western Asia to consumers in Europe. Such lines would bring transit fee revenues to Greece, maintenance contracts, cheaper oil and gas prices, while also improving the country's energy security. "We are making a very strong push to make Greece a hub for gas," said Papaconstantinou.

As different pipeline projects jockey for position, Greece is aligning itself with the ITGI (Interconnector Turkey-Greece-Italy) gas pipeline that would move roughly 11 billion cubic meters of largely Azerbaijani gas to southern Europe as early as 2013. It already moves about 750 million cubic meters of gas from Turkey to Greece. New pipelines, storage facilities and natural gas shipping will expand the infrastructure to transport gas to and through Greece.

Furthermore, many believe the country could also build on its expertise in shipping and its geographic center as a regional port between Europe, Africa and the Middle-East, re-inventing itself as an energy transit hub. Greece has a Liquefied Natural Gas terminal operating from the Revithousa Island, 45 kilometers west of Athens, which is currently being upgraded and expanded. Compressed Natural Gas, which involves transporting gas by ship rather than by pipeline, may also have a future in Greece say analysts.