Greece, Israel and Cyprus have signed an agreement to build a pipeline that has the potential to supply Europe with 4% of its annual gas needs by the mid-2020s. Cypriot President Nicos Anastasiades, Israeli Prime Minister Benjamin Netanyahu and Greek Prime Minister Kyriakos Mistotakis attended the signing ceremony for the natural gas pipeline on 2 January.
The proposed eastern Mediterranean (EastMed) pipeline will connect recently-discovered gas fields in the eastern Mediterranean basin with European markets through Cyprus, Greece and Italy. The pipeline, which would stretch for 1,181 miles and initially carry 10 billion cubic metres (bcm) of gas annually, is being developed by IGI Poseidon, a joint-venture between DEPA, Greece’s state-owned supplier, and Edison. Reports suggest Italy is poised to sign the agreement at a later date.
The EastMed pipeline agreement follows recent tensions in the region after Turkey signed an agreement with Libya mapping out maritime borders in the area. The controversial move between the two countries creates a ‘corridor’ of maritime boundaries, potentially paving the way for oil and gas exploration.
DEPA signed a letter of intent (LOI) along with Energean Oil & Gas for the potential sale and purchase of two billion cubic metres of natural gas per year from Energean’s fields in offshore Israel. In a statement, DEPA CEO Konstantinos Xifaras said: “With the agreement we have signed today – the first agreement for the commercial use of the EastMed pipeline – we are taking a decisive step for the project’s commercial viability and its realisation.
“With the present LOI, DEPA expresses its intention to buy 2 bcm of gas, which corresponds to 20% of EastMed’s initial capacity. Thus, a major producer of East Mediterranean gas (Energean) and a key distributor of gas in South East Europe (DEPA) are joining forces to ensure the success of the pipeline.”
“This agreement with EPA is an important development in the context of the EastMed pipeline project,” added Energean CEO Mathios Rigas, “which now has not only the support of governments and the EU, but is also attracting commercial interest from buyers and sellers of gas in the region.
“The EastMed pipeline provides Energean with another monetisation route for its strategy to fully utilise the Energean Power FPSO that has an 8 BCM/y capacity and further allows us to continue the exploration and development of our 9 licenses offshore Israel.
“We are very pleased to have signed the LOI with DEPA, which is the first commercial agreement for the EastMed pipeline, and look forward to further assisting the development of the project, which will substantially benefit the economies, the security of supply and the consumers of the Eastern Mediterranean and Europe.”
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