Saturday, May 18, 2024
 
 

Turning off Russian gas, Greece-Cyprus-Israel think electric too

The EU energy mix: LNG, EuroAsia link, EastMed
GREECE'S ENVIRONMENT AND ENERGY MINISTRY
Greece's Environment and Energy Minister Kostas Skrekas, Israel’s National Infrastructures, Energy and Water Resources Minister Karine Elharrar and Cyprus’ Energy, Commerce and Industry Minister Natasha Pilidou meet in Jerusalem, Israel, April 11, 2022.

- Advertisement -

The Energy Ministers of Israel, Greece and Cyprus discussed in a tripartite meeting in Jerusalem on April 11 the effects of Russia’s invasion in Ukraine on the energy markets and agreed to advance specific investment plans in natural gas and electricity projects that will help reduce reliance on Russia.

Israel’s National Infrastructures, Energy and Water Resources Minister Karine Elharrar, Greece’s Environment and Energy Minister Kostas Skrekas and Cyprus’ Energy, Commerce and Industry Minister Natasha Pilidou also discussed the deepening of the tripartite strategic cooperation and the flagship projects promoted in the Eastern Mediterranean region, which will enhance energy security and contribute to the diversification of energy sources and routes, including the EuroAsia electricity interconnector between Israel, Cyprus and Greece, the construction of a liquified natural gas (LNG) plant in Cyprus and the EastMed gas pipeline, Greece’s Climate and Energy Ministry said.

“EU’s targets are to reduce reliance on Russian gas be two-thirds this year and completely before 2030, preferably by 2027. But it will also accelerate transition to green energy and within that, it plans to reduce use of gas by 30% by 2030 and by over 80% by 2050,” Charles Ellinas, senior fellow at the Atlantic Council’s Global Energy Center, told NE Global on April 14.

Under these conditions, the East Mediterranean region can help but only by utilizing existing installations, i.e., by using Egypt’s two liquefaction plants at Idku, operated by Royal Dutch Shell, and Damietta, operated by Italy’s ENI, to their maximum capacity, which is about 17 billion cubic meters per year, Ellinas said.

LNG exports so far this year amount to only 60% of this capacity, with close to 0.7 billion cubic meters going to Europe, he said, adding that US major Chevron has already increased its gas exports to Egypt, mostly from Israel’s Leviathan gas-field, to about 10 billion cubic meters and that will help Egypt increase LNG exports to Europe. In addition, ENI and Egypt have entered into a new agreement to enable more LNG to be exported to Europe through Italy.

“It is important to note that with EU’s stated intention to wean itself from gas as we approach 2030 and beyond, there is no support for new major projects to supply Europe with gas beyond 2030. That makes investment in the EastMed gas pipeline, or any new – greenfield – gas production and export projects, extremely difficult. Without EU support, no investor will be prepared to support such projects. We should also remember that EIB has also stopped investing in fossil fuel projects,” Ellinas said.

“I expect we will see some new drilling, especially where contractual commitments have already been made, mostly offshore Cyprus and Egypt,” he said, adding that in Israel Greece’s Energean has already started a new drilling campaign. “We could also see more activity in the Ionian,” Ellinas said, explaining that the blocks south-west of Crete licensed to US energy giant ExxonMobil, France’s Total and Hellenic Petroleum (ELPE) are very challenging – water depths exceeding 3,000 meters and difficult, highly fractured geology. “It remains to be seen if this area receives new attention. Certainly, the Greek government is now taking pro-active steps to revive offshore exploration, so that it can reduce its reliance on Russian gas,” he said.

Ellinas argued that the fastest and least costly option to expand East Med LNG export capacity is by adding new liquefaction trains to Egypt’s existing LNG plants. Building new, greenfield, liquefaction facilities in areas that have no existing infrastructure will be time-consuming and expensive, he said, arguing that investments will be forthcoming only if long-term LNG sales agreements are secured. With the EU intending to wean itself from gas, that will be a challenge, he said.

Turning to the EuroAsia electricity interconnector, he noted that most funding for the Cyprus-Crete link has already been secured. The remainder should be in place over the next few months. The plan is to start construction by the end of this year, with operations expected to commence early 2026, he said, adding that negotiations are in progress with Israel regarding the Israel-Cyprus link, but this is still at inter-governmental stage.

Regarding renewable developments in the East Mediterranean region, Ellinas said prospects are good, but because of the energy crisis and the war in Ukraine priorities have shifted to security of supplies and reducing dependence on Russian gas. “For example, Greece is prioritizing reducing gas import dependence and reducing the exorbitant cost of energy. As a result, it is now returning to lignite, and it is also expanding renewable capacity. Turkey is considering nuclear and expanding renewables for similar reasons,” Ellinas said, adding, “On the other hand, Egypt is expediting its green hydrogen production and export plans in cooperation with the EU”.

follow on twitter @energyinsider

- Advertisement -

Subscribe to our newsletter

Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

Latest

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from...

Georgia’s “Foreign Representatives Law” moves forward amid protests

On May 14, Georgia’s parliament approved (84/150) a hotly...

North Macedonia: Sliding back towards the political dark side?

As most analysts predicted after the strong showing of...

A Green 5+1, regional water issues in Central Asia and previewing next year’s Astana International Forum

Kazakhstan’s Astana International Forum (AIF) has been postponed to 2025, as Astana...

Don't miss

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from...

Georgia’s “Foreign Representatives Law” moves forward amid protests

On May 14, Georgia’s parliament approved (84/150) a hotly...

North Macedonia: Sliding back towards the political dark side?

As most analysts predicted after the strong showing of...

A Green 5+1, regional water issues in Central Asia and previewing next year’s Astana International Forum

Kazakhstan’s Astana International Forum (AIF) has been postponed to 2025, as Astana...

Navigating the climate challenges for COP29

The impacts of climate change have become more evident...

Tackling new threats to critical energy infrastructure

The explosions that targeted the Nord Stream pipelines from Russia to Germany in September 2022 and the suspected sabotage of Baltic-connector pipeline, which supplies...

Navigating the climate challenges for COP29

The impacts of climate change have become more evident as greenhouse gas emissions (GHG) from human activities cause increased heat, drought, floods etc. Changes...

Uzbekistan to mobilize investment in environmental protection, sustainable development

NE Global sat down for an interview, in the Uzbek capital, during the 3rd Tashkent International Investment Forum (TIIF) with Aziz Abdukhakimov, Uzbekistan's Minister of Ecology,...

New wave of U.S. sanctions target Russia’s foreign suppliers and industrial base

On May 1, the U.S. Department of State together with the U.S. Treasury Department unveiled a wide-ranging new list of anti-Russia sanctions covering an...

U.S.-Ukraine Partnership Forum focuses on engaging the private sector in Ukraine’s Recovery

On April 17, in partnership with the U.S. Department of State, the U.S. Department of Commerce, and USAID, the U.S. Chamber of Commerce hosted...

COP 29: Azerbaijan takes the spotlight

The next global climate conference, COP 29, will occur in November in Baku, Azerbaijan. The gathering is essential to continue discussing and developing strategies...

EU, U.S., Uzbekistan and other partners strengthen critical raw materials cooperation

The European Union, the United States, and other Minerals Security Partnership (MSP) partners, joined by Kazakhstan, Namibia, Ukraine, and Uzbekistan, officially launched the Minerals...

The influence of Russia’s nuclear industry steadily expanding in Turkey

Turkey's decision last month that Russian State Atomic Energy Corporation Rosatom will build the country’s second nuclear power plant, most likely at a site...