GIG: DESFA is a key player in Greece’s energy market, while the company has been undergoing an important transformation over the past three years. In what way has DESFA’s privatisation changed the company?

Galli: DESFA’s privatisation has marked a critical milestone in the company’s life for a number of reasons. Beyond the transition in the ownership of the company from public to private and – most importantly – thanks to the privatisation, DESFA has become part of an international group that includes the largest European gas infrastructure players – originating from Italy, Spain, and Belgium. This is particularly important as we don’t have financial investors with short-term financial goals. Rather, we have European industrial shareholders with histories that date back 80 years. Together, our shareholders are the voices leading discussions in Brussels at a European level with respect to the role of natural gas and new gases in the energy transition. So, it is quite significant that all this accumulated know-how, expertise, and competence has been made available to DESFA in a very short period of time, favouring and accelerating the company’s transformation.
This is very evident in terms of the steps we have undertaken during the past year with respect to our strategic positioning and the company’s corporate transformation. On the one hand, we have been heavily focusing on DESFA’s digital transformation to ensure the company is run in a robust, lean, and efficient manner, which is still ongoing and very important. On the other hand, we have been carrying out a restructuring in terms of processes, procedures, and corporate governance. And yet, in parallel, we have had to jump on a train that is running at full speed: the role of natural gas in the energy transition and that of new gases in Europe’s future energy mix.
The fact that we have access to the joint efforts of our European shareholders has enabled us to really focus on our strategic plans in Greece and how we can become a strategic pillar in the country’s energy transition goals. This is why we have undertaken a huge effort to establish strategic and long-term goals across a 20-to-30-year horizon.
In this regard, we now have many actions happening in parallel: Firstly, there is the strong acceleration of our core business coupled with the will to consolidate and strengthen this activity in a short period of time. However, at the same time, we are keenly aware that we need to prepare for the future. This is why we have started developing and implementing business decisions, in tandem, to ensure that all our new infrastructure is future-proofed and 100% hydrogen certified – or, put differently, built considering how it will be used 20 to 30 years down the road. And we are also taking steps to ensure our pre-existing natural gas network is fully adapted and refurbished to accommodate decarbonised gases.
GIG: The EU energy crisis coupled with the war in Ukraine have stressed the importance of energy security and diversification of energy supply. Do you consider there is a real risk at this point in time with respect to security of supply, particularly given calls to eliminate Russian gas as a source of supply? What steps is DESFA taking to mitigate any possible risks moving forward?










Galli: The war in Ukraine and the REPowerEU plan have stressed the crucial role of our network together with the development of the necessary infrastructure in ensuring both diversification of energy supply and increased energy security. This has become more relevant than ever at both a regional and a European level.
Our energy system has had to face a number of unprecedented situations over the course of the last two years and our priority has been and continues to be ensuring the flexibility and availability of our network.
This is why we continue to invest in infrastructure to boost our network’s flexibility. We also plan its maintenance in a way that increases availability of supply and guarantees the smooth operation of the system – throughout the year – at a 99% rate.
That said, it’s important to highlight that Greece has invested in the diversification of its sources of energy supply. We have five interconnection points along with a large ability to import LNG, both of which will be further enhanced through new investments including a second FSRU in Alexandroupolis, the Dioriga Gas FSRU, and the Argo FSRU in Volos. This is why we are confident that we stand ready to face the energy challenges of today – including possible changes in our sources of supply – as long as we work hand-in-hand with all competent authorities and market components.


As for the future, a series of new cross-border pipeline interconnections with neighbouring countries coupled with new supply routes – such as TAP or the interconnection with the FSRU in Alexandroupolis – are not only consolidating Greece’s role as an energy gateway for the region, but they are also contributing to upgrade the role of the wider Eastern Mediterranean in today’s new energy landscape. It is important to stress the fact that these new dynamics create more competition, and more competition means lower prices for end consumers, regardless of whether absolute prices are high or low.
On the other hand, the official launch in March of the Hellenic Energy Exchange’s Natural Gas Trading Platform – in which DESFA is a shareholder – was a key development for the energy market. In addition to price discovery and incentivising the interconnectivity and liquidity of Southeastern European energy markets, the platform is helping market participants optimise supply conditions for the benefit of consumers while enhancing security of supply. And as we continue on route to meet our energy transition goals, the platform will also serve as an essential tool in the next phase of the gas market with the eventual integration into the wholesale market of renewable gases and other innovative products.
What is undeniable is that all these developments call for a further acceleration of the energy transition, making our new strategy – which focuses on green gases and the development of new future proofed infrastructure – even more important.
The only weakness we have in our energy system is the lack of underground storage. However, this is an element we are currently working on while exploring possibilities to cooperate with neighbouring countries, such as Bulgaria and Italy, taking advantage of their storage capacity.
GIG: What does this mean for Greece with respect to calls from the European Union for 15% of energy consumption to be stored and for gas storage levels to reach 80% by November?










Galli: Storage is a key pillar in any reliable natural gas system and can play an important role in determining gas prices within the country. However, as I already mentioned, this is something Greece is currently lacking. It is important to highlight that while more renewable energy sources need to be deployed, gas is there to intervene in the energy system when renewables are not available – when the wind doesn’t blow, or the sun doesn’t shine. However, for gas to be able to effectively play this stabilising role, a system of gas pipelines, infrastructure, and stored gas is necessary to ensure the commodity is in place when needed.
And while the development of gas storage is not completely up to us, we are very supportive of efforts in this direction and are participating in the South Kavala Underground Gas Storage (UGS) tender together with our partner TERNA. The Kavala UGS project is included in the EU’s PCI list, enabling EU funding and we expect to see a positive development at this end really soon.


We are also working very closely with the Ministry of Environment and Energy and the energy regulator to design the appropriate regulatory framework in an effort to support the deployment of such storage facilities. In this regard, we have presented to the authorities detailed studies on how to ensure the proper operation of the planned South Kavala UGS and its guaranteed access to the natural gas system, to the maximum benefit of users and the market as a whole.
Apart from that, DESFA will add a Floating Storage Unit (FSU) to the Revithoussa LNG Terminal increasing its total available storage capacity from 225.000 m3 of LNG to more than 380.000 m3, thus increasing the terminal’s ability to safely receive, unload, store and re-gasify approximately 7,2 bcm of natural gas per year with the simultaneous 12% upgrade of re-gasification capacity that is being currently developed.
The addition of the FSU will lead to an increase of the yearly available capacity to import gas through Revithoussa, resolving a critical capacity constraint in the case of Russian gas disruption and reducing the need for additional measures to avoid gas curtailment. This will also be proven valuable for the diversification of supplies in the region, even if Russian gas is not disrupted.
GIG: One of the key benefits of upgrading and expanding the national gas system is that it will ensure greater diversification and flexibility of energy supply. But in what way will this help make Greece a greener country?










Galli: We want to ensure that gas is available throughout the country to substitute highly polluting fuels – like lignite – in all areas including electricity production, and both industrial and domestic uses. We are not only expanding the grid with new pipelines extending, for example, to West Macedonia and Patras; in addition, we are developing small-scale liquified natural gas (LNG), which is a solution that enables the delivery of gas in liquid form to locations not connected with the high-pressure system, via trucks and ships.
So, in the short to medium term, the most immediate benefit of the expansion of the gas grid is that it will enable the delivery of gas to power plants, fuelling electricity generation in the place of lignite. And this substitution for natural gas will allow us to significantly reduce CO2 emissions.
Gas deliveries through the West Macedonia pipeline, for example, will be key in shutting down lignite power plants for combined heat and power production, creating an immediate and tangible impact on the reduction of emissions.
The same applies to the strong will that exists to make sure that – wherever gas is available – domestic heating systems use gas instead of more polluting fuels.
Another aspect, which we think is crucial, relates to the use of LNG as a fuel in the transportation sector, particularly in the heavy transportation sector, where electrification is not an option, and where a significant reduction of CO2 can be achieved. This is also the case with the marine transportation sector, through bunkering. Through our investment at the Revithoussa terminal, we are launching later this year a truck LNG loading facility and building a new jetty to reload LNG on smaller ships.


GIG: What kind of impact will DESFA’s investment programme have on the national economy? What benefits will this bring about at a regional level?










Galli: At an economic level, and as part of our 10-year investment plan, we will be investing approximately €830 million with the majority our investments concentrated within the next four to five years. And, generally speaking, the GDP impact of infrastructure investments is two to one, which means that we are tangibly contributing to the economic growth of the country.
The vast majority of these investments also have a strong national workforce component, particularly during the construction phase. And we are working with leading domestic EPC contractors including Mytilineos, TERNA, Avax, and Aktor, for example, who stand to benefit – specifically in the case of the West Macedonia pipeline – from the transfer of international know-how regarding the hydrogen field, which can be further deployed in the Greek market.
GIG: One of DESFA’s main focuses is the development of a hydrogen economy. How far away are we from incorporating hydrogen into the energy mix?










Galli: The entry of hydrogen into the energy mix will depend heavily on the ability of the market to bring down production costs, the speedy development of an integrated value chain, and a logistics solution to transport and connect supply with demand. On this last point, Europe boasts the advantage of having a very extensive natural gas grid that can play this role. So, what is absolutely critical is tackling the first point – reducing production costs – and we are still far from reaching potential targets such as €1/kg or even €2/kg.
Nevertheless, if our experience with renewable energy technologies is to serve as a reference, and there is a policy decision to develop hydrogen technology as part of the energy mix, such as the recent European Commission’s REPowerEU roadmap, which features a key role for green hydrogen production, we have reasons to be optimistic. We just need to look at the example of solar energy and see how the cost of solar panels has declined. If we extrapolate these costs to those of the electrolysers required to produce green hydrogen, we can be confident that by the end of this decade, we will have an economically viable green hydrogen production.
In parallel, and while our ultimate goal should be the production of green hydrogen, we also need to foster the development of a hydrogen economy through blue hydrogen leveraging carbon capture and storage – a direction Europe is currently pushing.
The political will exists in Europe and in Greece. If on top of this the adequate initial financial support is provided – as was the case with renewables – in addition to strong and clear targets, I am confident the industry will follow.
So, I think we could see hydrogen in the energy mix by 2030 – but not in all sectors. It’s most likely that hydrogen will play a role in certain sectors where it is easier to reach cost competitiveness, such as regional train transportation, other heavy-duty transport and, of course, harder-to-abate industries like refineries and steelmaking, where hydrogen is already used as a feedstock. These industries, which use grey hydrogen today, will eventually invest in upscaling production to use hydrogen as a fuel, while transitioning to blue hydrogen.
GIG: Within this scope, one of DESFA’s key roles is preparing the gas network for the transportation of hydrogen. Exactly what is the company’s role in the White Dragon project? What other steps are being taken?










Galli: Our primary role is making sure that there is infrastructure that can connect demand and supply. At the same time, companies like DESFA and other TSOs play a key role as ecosystem orchestrators, ensuring that all parts of the value chain are developed in a harmonic and coherent manner, while making sure that consumers transform their equipment to support the use of either blended or pure hydrogen. This means that we are part of broader discussions at both a national and international level focused on the actual development of the business model for a hydrogen economy.
In the case of the White Dragon, the project foresees an initial phase of green hydrogen production in West Macedonia by means of electrolysers with an important amount of this hydrogen set to be consumed locally in Advent fuel cells, which will be dual fuelled – running on both hydrogen and natural gas. This means that in the summer, when there is more hydrogen, this will be injected and blended into the DESFA network – which is why our pipeline towards West Macedonia needs to be 100% hydrogen ready. In the winter, though, the fuel cells will run on natural gas. Nevertheless, and most importantly, perhaps, the total amount of hydrogen produced will match the total amount of energy consumed, and the hydrogen will be stored within the actual gas transmission system.


It’s also worth mentioning that we recently submitted a proposal for the EL24 – H2 Hellenic Network project that is aligned with the “White Dragon” project, in terms of timeline and quantities of hydrogen for injection. But apart from the White Dragon project, there are a number of projects in Greece that have been tabled regarding hydrogen production and injection into the grid. So, our task is to ensure that both our current and future system will be able to accommodate these quantities of renewable gas.
Beyond focusing on the future-proofing of the existing gas network and the construction of a pure hydrogen transmission network along the Greek territory, what is of particular interest is that this project would be the starting point of a growing hydrogen network – both in scope and volume.
This would connect with potential partners, who either produce or consume hydrogen in Greece or in neighbouring countries, and would constitute the Southeastern European section of the European Hydrogen Backbone – an initiative spearheaded by 31 energy infrastructure operators, that aims to develop a hydrogen transmission network across Europe.
GIG: You assumed the leadership of DESFA one year ago. What is the biggest challenge you have had to overcome so far?










Galli: The biggest challenge we continue to face refers to the maturity of the Greek regulatory framework. On the one hand, Greece has accelerated the privatisation of most of its energy sector, including both the transportation and production of gas and electricity, and in doing so has managed to successfully attract a great deal of international interest. Leading international companies – from markets such as China, Italy, Spain, Belgium, and Australia – are currently investing in Greece’s energy market.
However, on the other hand, we find that the regulatory system is struggling to keep up with the pace of change in the sector, and there is a quantum leap between where the country used to be and where it needs to be in this respect. This is a weakness that generates delays and uncertainty and, in turn, can affect investment decisions.
<strong>GIG: And bearing in mind you represent a very strong group of investors in Greece, what are the benefits of investing in the market? </strong>










Galli: The main benefit of investing in Greece is that there is still so much potential because so much more still needs to be done, particularly in terms of both electricity and gas. This means that there are real opportunities for growth, something not many European countries have to offer, and this is what has attracted so many leading international players into the market.
In addition, Greece has very good human capital. If you invest in the energy sector, you need to know that you can find qualified professionals with a strong technical background and Greece offers an excellent pool of highly trained technical professionals, specifically in the energy field.