Cypriot President Nicos Anastasides, Israeli Prime Minister Benjamin Netanyahu and Greek Prime Minister Alexis Tsipras, met on Thursday in Thessaloniki for their fourth trilateral Summit. The leaders declared after their meeting that they are planning to accelerate the development of the pipeline (EastMed Project) that will channel natural gas to Europe from the newly discovered reserves in Israel and Cyprus. Mr. Netanyahu, said that if the pipeline becomes a reality, will signal tremendous prospects.
Source: Cyprus Mail
On April this year, during the Ministerial (Energy) summit, in Tel Aviv, the Ministers of Energy of Cyprus, Israel, Italy and Greece had also agreed to continue pursuing the development of a gas pipeline project that could link gas fields offshore Israel to Cyprus, Greece, and Italy. It is important to note that a Joint Declaration was signed, in the presence of European Commissioner Miguel Arias Canete, by the aforementioned ministers who reaffirmed their support to the swift implementation of the Project.
Accordingly, this project envisions to: (a) develop EU energy resources such as the natural gas reserves around Cyprus and Greece and (b) promote the development of a South-Eastern Mediterranean Gas Hub. The EastMed pipeline is a project designed to transport initially 10 Bcm/y (billion cubic meters of gas per year) from the off-shore gas reserves in the Levantine Basin (Cyprus and Israel) into Greece and, in conjunction with the Poseidon and IGB pipelines, in to Italy and other South East European countries. Furthermore, the pipeline would feed Cyprus’ internal consumption with additional 1 Bcm/y.
The EastMed project’s route is currently designed to start from the new natural gas discoveries in the East Mediterranean region and envisages a 1.300 km offshore pipeline and a 600 km onshore pipeline, comprising the following sections:
• 200 km offshore pipeline stretching from Eastern Mediterranean sources to Cyprus;
• 700 km offshore pipeline connecting Cyprus to Crete Island;
• 400 km offshore pipeline from Crete to mainland Greece (Peloponnese);
• 600 km onshore pipeline crossing Peloponnese and West Greece.
The idea for constructing the said pipeline was formulated during 2015 and it received EU support due to the benefits that the project brings in Europe. The EastMed pipeline has been confirmed as a Project of Common Interest (PCI), being included by the EU Commission in the second PCI list among the Southern Gas Corridor projects.
Moreover, it has also been included in the last Ten Years Development Plan (TYNDP), in line with the objective of the European Network Transportation System Operators of Gas (ENTSOG) to create a single European market for gas and a reliable and safe transmission network capable of meeting Europe's current and future needs. The project has been awarded in 2015 with European grants of 2 million euro through the Connecting Europe Facility (CEF) program necessary for the co-finance of the Pre-FEED activities.
During the recent energy summit, in Tel Aviv, the European Commissioner for Climate Action and Energy, Miguel Arias Canete, who attended the ministerial summit, said in a statement:
“In the next decades, gas flows from the eastern Mediterranean region will play a vital role in the energy security of the European Union. The Commission strongly supports the construction of the necessary energy infrastructure and developing a competitive and liquid gas market in the region.”
The company which undertook to complete the feasibility studies (during the period 2015-2016), regarding the EastMed Pipeline Project, is IGI Poseidon (a 50/50 joint venture between Greece’s DEPA and Italy’s Edison SpA). The studies have been finalized, thanks to EU financial contribution under the CEF program, with the support of first class international engineering (Intecsea and C&M consortium) and global consultancy (IHS-Cera) firms, confirming that the Project is:
• technically feasible: relevant industry players have confirmed availability of several pipe mills and of multiple laying vessels capable of securing project realization;
• economically viable: current estimate of project capital expenditures requirements evidences that the total project cost results lower than similar-capacity import projects to EU and sustainable in view of EU gas prices scenarios;
• complementary to other export options: current discoveries from the region would sustain approximately 30 Bcm/y exports to global markets, without accounting for future discoveries in a widely underexplored region, and would therefore support multiple export schemes, including to global markets via LNG and to Europe via EastMed pipeline.
The chief executive of IGI Poseidon, Elio Ruggeri, told Reuters that sees a final investment decision on the project by 2020. The agreement signed in Tel Aviv, Israel, sets a time-frame of seven years for the project and according to Ruggeri the pipeline would cost $5.3 billion (€5 billion) to reach the Greek gas system, and $6.4 billion (€6 billion) to reach the Italian system. Within this framework, the IGI Poseidon’s endeavors are now focalizing in activities that would allow the Project to shift from the Development status and reach the Investment Decision status. These include performing marine surveys along the route in order to improve routing accuracy and to finalize preparation of the tender packages.
Taking into consideration the developments regarding the oil and natural gas market in a worldwide level, the execution of the EastMed Pipeline Project will mark a globally significant step for energy security turning the East Mediterranean reserves, with Cyprus being a vital player, into a key gas hub.
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