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Israel, Greece, Cyprus to export electricity to EU

08 August, 2013

* MoU secures energy cost, gas pipeline * 

Israel, Greece and Cyprus plan to enhance their cooperation in the fields of energy and water resources that could result in cheaper electricity in the eastern Mediterranean and exports of natural gas, as well as electricity to the European power grid.

The ministers of energy of the three countries signed a memorandum of understanding in Nicosia on Thursday, the first of its kind between them, that will encourage joint projects and enhance security of energy supply, energy resources and sustainable development in the area.

Cyprus Energy, Trade and Tourism Minister Yiorgos Lakotrypis said that they discussed the high tension EuroAsia Interconnector project, a 2,000 megawatt subsea electricity cable from Israel to continental Europe via Cyprus and Greece “and we reiterated our commitment to the project that is of special interest to the European Union.”

The project, which is a joint venture between Cyprus-based Quantum Corporation, the state-owned Electricity Authority of Cyprus, Israel Electric Company and the Public Power Company of Greece (DEH), is already underway and “will lift Cyprus out of energy isolation, with cheaper electricity which will help our economy become more competitive,” Lakotrypis said.

The Cypriot official said that they also discussed the feasibility of a gas pipeline from the East Mediterranean to Europe via Cyprus and Greece, and the prospect of a gas storage pipeline that will enhance the resource supplies in the region.

The Greek Environment, Energy and Climate Change Minister Yiannis Maniatis said that the trilateral MoU is the result of three years’ of work and will allow electricity from the eastern Mediterranean to be exported to Europe.

“There has been a 40% reduction in the cost of the project and better financing terms,” Maniatis said, adding that the MoU will pave the way for “other projects of cooperation between our three countries.”

Israel’s Silvan Shalom, who also attended the inauguration of a joint venture desalination plant near the coastal town of Limassol a day earlier, said that “with the MoU we are moving forward. Apart from the cheaper electricity cost for Cyprus, both Israel and Greece will also benefit from the international cable project.”

The Water and Energy Resources Minister added that the EU will soon see the real benefits of this cooperation and that “more such joint projects are in front of us.”

A day earlier, Cyprus President Nicos Anastasiades President called on Israel to seriously consider committing to exporting gas from the Cyprus LNG terminal that will be ready at Vassiliko in 2018.

He said “my government is moving forward with determination with the construction of an LNG plant, in order to realise the significant potential of becoming the Eastern Mediterranean’s energy hub. I invite the government of Israel to seriously consider committing to exporting Israeli gas from the LNG facility.”

Anastasiades said that “our proximity to the Suez Canal is an important factor favouring the creation of a regional energy hub in Cyprus for the transportation of natural gas from Eastern Mediterranean countries, not only to Europe, but also to the Far East”.

The Cypriot president pointed out that a “web of natural gas transportation projects in the Eastern Mediterranean will serve as a means to potentially strengthen regional energy security and attract foreign investments, leading to job creation; this should serve as a boost to the economies of our region”.

He also spoke of the role energy could place in contributing to the peace and stability in the region to the benefit of all.

“Energy should not be a source of conflict, but a tool for conflict resolution and regional integration”, he said.

Houston-based Noble Energy conducted exploratory drilling in Block 12 of the Cyprus Exclusive Economic Zone and is currently completing a second appraisal well to confirm the estimated resources of about 7 trln cubic feet of natural gas.

Noble’s partners in the Cyprus gasfield, Delek Drilling and Avner Oil Exploration, are also joint operators of gasfields in Israel and the three companies have signed an MoU with the Cyprus government to plan an onshore LNG gas terminal.

Already, France’s Total and the Italian-Korean joint venture ENI-Kogas, who are expected to start exploratory drilling in their gasfields within the Cyprus EEZ next year, have already expressed an interest to build a second and third production train at the Cyprus LNG terminal.