- Category: Economy
- Published on Monday, 28 November 2016 12:55
The effort to produce natural gas from the major deposits of Eastern Mediterranean is now well underway, as Eni continues to develop the Zohr field in Egypt, Noble Energy advances Aphrodite in Cyprus and the Leviathan partners in Israel seek potential buyers. At the same time, Cyprus proceeds with its third licensing round, with its result expected to be announced before the end of this year.
Obviously, a crucial issue for the future of Eastern Mediterranean gas is its marketing and the way it is going to be transferred to major markets, like Europe. One of the most promising available solutions is the East Med pipeline, proposed by DEPA, an ambitious, but completely feasible project, which is expected to provide stability and unlock the precious resources of that region in the near future.
East Med is designed to connect the recently discovered gas fields in the Levantine Basin, in the south east Mediterranean, with mainland Greece and is projected to carry 8-14 bcm/y of natural gas to Greece and Europe. Since the end of July 2014, the Project is being developed by the Greek company IGI Poseidon S.A. (50% DEPA – 50% Edison).
The pipeline’s length is estimated to be around 1900 kilometers of which 500km will be onshore in the Peloponnese and Ipeirus. The pipeline consists of three sections: (i) a pipeline from the fields to Cyprus (Vasiliko), (ii) a pipeline connecting Cyprus to Crete, and (iii) a pipeline from Crete to mainland Greece with compressor stations at Cyprus and Crete.
In this manner, East Med will offer an additional diversified supply of natural gas to Greece, Italy (via the IGI Poseidon pipeline) and Europe in general. Therefore, the project is 100% compatible with European energy policy, since Brussels has called for additional sources of natural gas from new producing regions, in order to reduce dependence on Russian supplies that have dominated parts of Europe so far. DEPA’s CEO, Theodoros Kitsakos, recently characterized East Med as “the new model of pipeline that E.U. supports, since it offers diversification of sources, of routing and of markets”.
This is exactly the reason why the Eastern Mediterranean Pipeline has been included in the Projects of Common Interest (PCI) list and the Greek Inter-Ministerial Decision of 3rd June 2014 already included East Med to a fast track legislation procedure for strategic investments. East Med’s importance is further underlined by the fact that it can create a brand new corridor, which will act in a supplemental manner to the Southern Corridor, already underway in Azerbaijan, Turkey and Greece. In this manner, even more gas from new sources can reach Europe and European consumers may enjoy safe and continuous flow, with no political or disruption risk whatsoever.
According to studies that have been carried out, it has been conclusively demonstrated that the East Med project is technically feasible, while, the engineering required is similar to projects already implemented (Medgaz pipeline Algeria – Spain) or ready to be constructed (Galsi pipeline Algeria – Italy). In 2016, the Pre-FEED (Front End Engineering Design) studies about East Med were completed with significant EU funding and their results were particularly promising. According to Dr. Kostas Karayannakos, DEPA’s Executive Director for Gas Supply, Commercial and International Activities, East Med is not only feasible when it comes to cost and technical issues, but also from a tariffs standpoint, keeping in mind today’s natural gas prices.
It should also be noted that the continuous technological progress may further increase the pipeline capacity, improving the economic potential of the project.
In October 2016, IGI Poseidon organized an international seminar about the prospects of the East Med pipeline, with the participation of Greek, Italian and Israeli officials, as well as EU representatives. The participants’ common ground was that East Med is a natural fit for the gas markets of the region and its process must be accelerated through political decisions. The fact that East Med enjoys solid political support from the Greek, Cypriot, Italian and Israeli governments is already established and reaffirmed this year through various statements by officials from those countries. Therefore, the preparations are already underway and the next step is in December, 2016, when Greek, Israeli, Cypriot and European officials are going to meet in Jerusalem to discuss trilateral energy cooperation and mutual gas projects.