Greek Prime Minister Alexis Tsipras, Cypriot President Nicos
Anastasiades, and Israeli Prime Minister Benjamin Netanyahu agreed in
Nicosia on January 28 to strengthen cooperation between their three
countries, “especially on energy as the discovery of hydrocarbons in
eastern Mediterranean can be a catalyst for stability and partnership”.
“The trilateral agreement Greece – Cyprus – Israel is an agreement of
special economic and geopolitical significance,” the Greek ministry of
presssaid in a statement in Athens.
Asked if this agreement is a game changer in the region, Energean Oil
& Gas Chairman CEO Mathios Rigas told New Europe on January 29 that
there are “positive steps when politicians talk and cooperate but game
changers happen when projects become a reality, bring value to the
consumer and lower the cost of energy to the industry”.
Greece, Cyprus and Israel agreed to restart the EastMed natural gas
project that would connect directly the gas deposits in eastern
Mediterranean with European networks. EastMed is an important project
for the economy and energy security, the statement said.
Tsipras, Anastasiades, and Netanyahu also agreed to promote strategic
trilateral energy projects like the EuroAsia Interconnector that
foresees the cable connection of the three countries in order to
transport electricity to the energy markets of continental Europe.
They also agreed to explore the possibilities of building liquefied
natural gas (LNG) terminals in Greece. This issue is also part of the
trilateral agreement between Greece – Cyprus – Egypt, the statement
said.
Moreover, in continuation of the Paris Climate agreement, Greece,
Cyprus and Israel will explore the possibilities of cooperating in
technologies of renewable energy.
“The key questions that need to be answered are who will fund the
EastMed pipeline and is it technically and commercially viable; what is
the gas price that will be required to be paid by consumers to make the
projects (LNG and EastMed viable) and how does this compare with oil
price indexed gas contracts?” Rigas asked in an email response to
questions.
Constantinos Filis, director of research at Institute of
International Relations, told New Europe, “all of these declarations
have their significance, because they bring intentions into focus, but
the synergies referred to are still in the exploratory stage, with no
tangible results yet”.
“Regarding the EastMed, the Israeli side had been characteristically
slow to respond to the calls from the Greek side, going back to 2010,
for conducting joint feasibility studies concerning the EastMed, while
the Cypriots continue to have other priorities with regard to the
extraction of natural gas,” Filis said in an email response to
questions.
Egypt’s Zohr offshore field, which is one of the largest gas finds in
the Mediterranean, discovered by Italy’s ENI, has reportedly an
estimated 850 billion cubic metres – or 5.5 billion barrels of oil
equivalent in place.
“The recent discovery of the Zohr deposit may change things, but we
can’t say in what direction. Let’s not forget that a settlement of the
Cyprus issue, according to official statements from Nicosia, would
orient Cyprus towards the Turkish market. So, given that the quantities –
if no new fields are discovered – do not suffice for the creation of
the two aforementioned projects, and that oil prices, along with the
return of Iran, are having a negative impact on deep offshore fields,
the development of costly projects with some complications, like the
EastMed, would be difficult to promote in the immediate future, despite
the probability of being more economical than being supplied via
Turkey,” Filis said.
“LNG has a comparative advantage for the time being due to its
competitive price and, mainly, because it doesn’t involve geopolitical
risks. However, the departure point (Egypt, Cyprus) remains unknown,
Greece’s involvement cannot be ensured politically except through a
contract (and such contracts are now short term),” he said.
Greece will have to develop infrastructure in a timely manner, and
whether it will be linked to Europe – the Interconnector Greece Bulgaria
(IGB) will not suffice in its present form – together with price trends
in the coming year, will determine the final decisions, Filis said.
“The EuroAsia Interconnector, if and when it becomes economically
viable and commercially attractive, really can be promoted as a plan
with satisfactory prospects. And again, however, the end price for the
consumer, along with any technical difficulties, will be borne in mind
in decision-making,” he said.
“In short, the trilateral and quadrilateral (with Egypt)
consultations that have been underway in recent years have yet to take
on a specific format, with the very real risk of some development (e.g.,
settlement of the Cyprus issue, involvement of Iran, instability in
Egypt) dramatically shifting their course,” Filis said.
http://neurope.eu/article/greece-cyprus-israel-push-eastmed-euroasia-lng-projects/