April 3, 2017 15:02
The proposed 2,000 kilometer (subsea pipeline would connect gas fields offshore Israel and Cyprus with Greece and possibly Italy.
Aiming to transform the Eastern Mediterranean into a regional energy hub, Israeli and European officials signed a joint declaration on Monday to promote the construction of the world’s longest subsea gas pipeline.
"This is the beginning of our wonderful friendship between four Mediterranean countries – Israel, Cyprus, Greece and Italy,” National Infrastructure, Energy and Water Minister Yuval Steinitz said at a press conference in Tel Aviv that morning. "This is going to be the longest and deepest subsea gas pipeline in the world. It's a very ambitious project."
A two-minute video of the signing ceremony here.
The unprecedented, $6 billion-$7 billion plan in question involves building a privately-funded, 2,200-km deep-sea pipeline linking Israeli and Cypriot gas to the Greek and Italian shores. With a recent feasibility study indicating that the daunting project would be technically feasible, the energy ministers of all four countries, as well as the energy commissioner of the European Union, came together on Monday for their first quadrilateral meeting to promote the plans.
If all goes according to plans, the ministers hope to see gas flowing through the pipeline by 2025.
"We strongly support the development of the region as a future gas supplier," said European Commissioner for Climate Action and Energy Miguel Arias Cañete. "It is clear that the potential resources of this region are very significant."
At the moment, the EU receives its gas mainly from Russian and the North Sea reservoirs – the latter of which is rapidly depleting. Europe could provide an attractive outlet for Eastern Mediterranean gas for decades to come, due to its stable market for investors and geographical vicinity to the supplier, Cañete explained.
"We support the East Med project and look forward to the rapid completion of the study phase,” he said.
Although acknowledging that the European Commission cannot yet make definite commitments, Cañete expressed his confidence that the plans would meet commission requirements and would likely receive further financial backing for continued research.
Because the pipeline is considered an EU Project of Common Interest, the European Commission co-financed the project’s feasibility study, which was conducted by gas infrastructure developer IGI Poseidon – a 50-50 joint venture between Italian energy company Edison and Greek DEPA Group.
IGI Poseidon has already committed millions of euros to studying the project, in hopes that a final investment decision can be reached by 2020, according to IGI Poseidon CEO Elio Ruggeri. Stressing that Italy in particular will have a shortage of gas supply contracts starting that same year, Ruggeri said that “opening a new route adds reliability of supply to the Italian and European market.” While IGI Poseidon is open to potential new partners, the company remains the project owner until a final investment decision occurs, he added.
Discussing Italy’s need to phase out coal and build up a secure natural gas supply, Italian Economic Development Minister Carlo Calenda said that the pipeline is a priority project for Italy.
“We think this project in the next decades can be a real pillar of our energy strategies,” he said. “Now we need to speed up the project to realize it.”
At the G7 Summit in Sicily this May, Calenda added that the pipeline plans will be presented as a “clear example of how we can diversify the supply in Europe and in Italy.”
Echoing Calenda’s remarks, Greek Environment and Energy Minister Giorgos Stathakis emphasized the importance of not only diversifying gas sources but also ensuring the security of supply.
“As a transit country and because of its geographical position, obviously Greece has a central role in this diversification process,” Stathakis said.
"The next steps in the development of the project will need the full support of the ministers and the commission,” he continued. “This meeting today is a major step toward this direction."
As both a transit country and gas producer for the potential pipeline, Cyprus also has much to gain from partaking in this ambitious project, according to Cypriot Energy, Commerce, Industry and Tourism Minister Yiorgos Lakkotrypis.
"We consider the Eastern Mediterranean pipeline as a manifestation of our efforts over the past few years,” Lakkotrypis said. "We feel that this project can actually showcase the potential of the East Med to create another corridor into the European markets."
Describing the project as a “top priority for the four countries,” Steinitz said that the partners decided on Monday to order their director-generals to meet every 60 days, with the goal of shaping a quadrilateral memorandum of understanding by the end of 2017.
“It’s going to be a wonderful and very beneficial Mediterranean partnership,” he said.