The leaders of Cyprus, Greece and Israel plan to sign an agreement January 2 for building an undersea pipeline to bring Israeli and Cypriot natural gas to the European market, the Greek prime minister’s office announced Sunday.
The agreement, which will be signed in Athens by Greek Prime Minister Kyriakos Mitsotakis, Cypriot President Nikos Anastasiades and Prime Minister Benjamin Netanyahu, will be largely symbolic – aimed at helping Cyprus and Greece to confront Turkey over maritime rights.
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The announcement of the pipeline agreement comes on the heels of an agreement signed last week between Turkey and Libya delineating exclusive economic zones in the Mediterranean Sea that awards Turkey the areas where the projected pipeline is slated to run.
The agreement has elicited protests from eastern Mediterranean countries with gas interests, including Egypt. On Monday, Netanyahu said in a letter to the Greek and Cypriot leaders that the “the gas agreement between Turkey and Libya is not legal – we need to respond and sign the gas pipeline agreement.”
As now planned, the pipeline will run across the Mediterranean from Israel’s Levantine Basin offshore gas reserves to the Greek island of Crete and the Greek mainland, and then to Italy. Cyprus, Greece and Israel signed an agreement on the 1,900-kilometer (1,180-mile) pipeline earlier this year in the presence of U.S. Secretary of State Mike Pompeo.
However, the deal will be finalized with Italy’s signature at a later date, Mitsotakis’ office said. In May, Italian Prime Minister Giuseppe Conte expressed opposition to construction of the Poseidon project, the section of the pipeline that would connect Greece with Italy.
If completed, the EastMed pipeline could satisfy about 10% of the European Union’s natural gas needs, reducing its energy dependence on Russia. It would provide a giant market for Israeli gas and encourage more exploration and development
The EU has contributed to the cost of technical studies for the project. However, faces considerable technical and financial obstacles to be realized, not the least due to the low prevailing prices for natural gas in Europe. For it to succeed, the costs of building the pipeline, estimated at as much as $10 billion, would have to be subsidized by the governments involved.
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In related news, Egypt will begin importing natural gas from Israel by mid-January, National Infrastructure, Energy and Water Minister Yuval Steinitz told Israel Radio Sunday. “They will begin in the middle of next month and perhaps even earlier,” he said.
Israeli gas exports to Egypt will gradually reach 7 billion cubic meters, said a senior industry source who was speaking on condition of anonymity.
Steinitz said Egyptian Petroleum Minister Tarek El Molla had spoken to him two days ago and congratulated him on signing export permits for the gas.
Egyptian company Dolphinus Holdings reached a landmark deal last year with the Israeli companies operating the Israeli fields Leviathan and Tamar.
In October, the Israeli companies said they were increasing the amount of natural gas they plan to export to Egypt. One source in the Israeli energy industry estimated the value of gas at $19.5 billion: $14 billion from Leviathan and $5.5 billion from Tamar.
The National Infrastructure, Energy and Water Ministry gave final approval for the start of production at Leviathan field three days ago, after a court lifted a temporary injunction granted over environmental concerns.
A spokesman for Egypt’s Petroleum Ministry said he could not provide any information on the matter.