Page 14 - Euroil Week 20 2020

EurOil PIPELINES & TRANSPORT EurOil
Greece ratifies deal on EastMed pipe
GREECE
EastMed aims to pump up to 10 bcm per year of gas to Europe from Israel and potentially Cyprus.
GREECE’S parliament on May 14 ratified an agreement with Cyprus, Israel and Italy on build- ing a pipeline to pump East Mediterranean gas to Europe.
The EastMed project aims to deliver up to 10bn cubic metres per year gas from the Levant Basin off Israel and Cyprus to Southeast Europe. The pipeline is expected to stretch for almost 2,000 km and cost $6-7bn to lay.
Turkey, which has been condemned inter- nationally for drilling in Cypriot waters, bitterly opposes the plan. It says it is protecting the eco- nomic interests of the de-facto Turkish Republic of Northern Cyprus.
Greece, Cyprus, Israel and Italy reached an intergovernmental agreement on the project’s implementation on in January. Energean Oil & Gas, which is developing several large gas fields off Israel, also signed a letter of intent (LoI) with Greece’s Public Gas Corp. (DEPA) that month on the supply of 2 bcm per year of gas.
Another source to fill the pipeline is antici- pated to be the Aphrodite field off the coast of Cyprus, where Royal Dutch Shell, Texas-based Noble Energy and Israel’s Delek Group were awarded a 25-year production licence in
November last year.
Voting in favour of the deal were Greece’s rul-
ing New Democratic Party, the opposition Coa- lition of Radical Left (SYRIZA), the centre-left Movement for Change (KINAL) and the right- wing Greek Decision Party. Against were the Communist Party and the left-wing European Realistic Disobedience Front (MeRA25).
Greece is the first of the four participating countries to ratify the agreement. DEPA and Italy’s Edison said at the end of April they were pre-selecting engineering contractors for the four offshore legs of the pipeline, stretching for 1,470 km. But they have not disclosed a time- frame for the selection process.
A final investment decision (FID) on EastMed, which is listed as an EU Project of Common Interest (PCI), is not expected until 2022. Besides Turkish opposition, there are also concerns about whether there is sufficient gas demand in Southeast Europe to justify the pipeline.
Russia began supplying the region with gas via the TurkStream pipeline through Turkey this year, and Greece has plans to expand its LNG import capacity.™
EIB considers loan for Greece- North Macedonia gas link
MACEDONIA
North Macedonia would gain access to Greek LNG.
THE European Investment Bank (EIB) may pro- vide a €25mn ($27mn) loan for the construction of a gas interconnector between Greece and North Macedonia, according to a message pub- lished on its website last week.
The loan, which would need approval from the EIB’s board of directors, would go towards paying for construction of the Greek section of the pipeline, which carries an overall cost of €51mn.
The gas link would enable North Macedonia to access gas supplies arriving in Greece at LNG terminals and the Southern Gas Corridor (SGC) pipelines that provide Europe with gas from Azerbaijan. North Macedonia currently obtains all its gas from Russia, with shipments totalling just under 300mn cubic metres last year, accord- ing to Gazprom data.
The project, backed by Greece’s DESFA and North Macedonia’s MER Skopje, aims to run
a 120-km pipeline between the two countries, capable of flowing 1.75bn cubic metres of gas. It will start at Nea Messimvria in Greece and end near the North Macedonian city of Negotino.
MER Skopje and DESFA signed a memoran- dum on the project in 2016 and went on to form working groups to discuss it. The next stage will be market tests to see whether the plan is feasible.
The pipeline’s total cost is projected at €103mn. The EIB is also considering a €39.6mn loan for its North Macedonian section, accord- ing to the EU’s Energy Community. Other potential financiers include the European Regional Development Fund (ERDF) and the EU’s Western Balkans Investment Framework (WBIF).
Neither Greece and North Macedonia have specified a firm timeframe for taking a final investment decision (FID), laying the pipeline and commissioning it. ™
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Week 20 21•May•2020