Nicosia, Feb 20 : The Public Gas Corporation of Greece (DEPA) and the Italian Edison company at the end of January signed a letter of intent which will establish next month the Poseidon SA, the company that will own and operate the Poseidon sub-sea gas pipeline.
The 212-km- long pipeline will carry natural gas from the Caspian Sea and Iran to Western Europe when it is completed, at the end of 2009.
DEPA and Edison each have a 50 per cent share in the Poseidon pipeline which will be running from the Greek port of Stavrolimenas in northwest Greece, to Otranto in southeast Italy.
It will have a diameter of 32 inches and a capacity of 8-bn cm (282 bn cf) of natural gas per year. Initially, however, it will only operate at about 25 per cent capacity.
In order for Caspian gas to reach Italy, two other projects must be completed: a pipeline from western Turkey to the Greek town of Komotini, and a 300-km link connecting Greece's backbone gas pipeline network with Stavrolimenas. The latter is being built at DEPA's expense and will cost 600 million euros.
The construction of these pipelines will turn Greece into a transit hub for natural gas to Western Europe.
Initially, the natural gas will come from the Caspian Sea, via Azerbaijan and Turkey.
Eventually, gas from Iran and Turkmenistan, and also from Siberia, via Russia and Turkey, will also run through the pipeline.
The project is one of European Union's five Trans-European Energy Networks, which are considered priority projects.
The pipeline will be especially important as natural gas deposits in the North Sea are declining.
The World Bank has approved aid of 21 billion euros for the modernization of the gas transport network in Greece, Turkey and other Balkan countries.