Page 6 - AfrElec Week 36

AfrElec COMMENTARY AfrElec

Egypt’s East Med ambitions

Egypt has stepped up efforts to expand energy ties with nearby states,
despite the hazardous geopolitical environment

EGYPT EGYPT has stepped up efforts to expand energy the bed of the Mediterranean from Aphrodite,
ties with other countries in the Eastern Mediter- a field discovered offshore Cyprus in 2011, to
WHAT: ranean and Middle East over the last few weeks, Egypt’s northern coast. It would transport gas
Egypt is looking to via talks with Cyprus, Greece, Jordan and Iraq. from Aphrodite to the Idku and Damietta gas
establish new electricity, If these initiatives succeed, they could help liquefaction plants, which could then export it
gas and oil links with the country achieve its ambition of becoming a to Europe or other markets in the form of LNG.
countries in Africa and regional energy trading hub. However, the time- The Idku LNG plant is owned by Royal
Europe line for the various projects under discussion Dutch Shell (UK/Netherlands, 35.5%), Petronas
may be affected by the increasing complexity of (Malaysia, 35.5%), Egyptian Natural Gas Hold-
WHY: the geopolitical environment in the East Med ing Co. (EGAS, 12%), Egyptian General Petro-
Talks with potential region. leum Corp. (EGPC, 12%) and Total (France,
customers are taking 5%). The Damietta facility, meanwhile, is divided
place at a time of rising Africa and Europe between by Union Fenosa Gas, a joint venture
tensions Earlier this week, Ayman Soliman, the CEO between Naturgy (Spain) and Eni (Italy), with
of Egypt’s sovereign wealth fund, said that his 80%; EGAS, with 10%, and EGPC, with 10%.
WHAT NEXT: country had begun discussions with potential Egypt and Cyprus have said they see the pipe-
Territorial disputes in the customers on its plan to export low-cost electric line project as part of a wider effort to promote
Eastern Mediterranean power to other countries in Africa and Europe. bilateral and regional energy co-operation. Dur-
and conflict in Libya may “We are in talks with European infrastructure ing a virtual meeting last week, Egyptian Petro-
alter the timeline for investors, advisers and energy traders to assess leum and Mineral Resources Minister Tariq
projects without derailing the viability and appetite” for Egyptian electric- El Mulla and Cypriot Energy Minister Natasa
them completely ity, he told Bloomberg in an interview published Pilides noted that their countries were also
September 7. Egypt is capable of producing more working together within the framework of the
than enough electricity to satisfy its own needs, EastMed Gas Forum (EMGF).
and it could export its surplus to Europe via a
subsea transmission line to Cyprus and Greece, Jordan and Iraq
he noted. The talks between Egypt and Cyprus followed
The parties have already agreed to lay this closely on the heels of a tripartite meeting
cable, which will be known as the EuroAfrica between Egypt, Jordan and Iraq. At that meeting,
line, at a cost of €2.5bn for the first stage. It is due the parties agreed to work together on intercon-
to be commissioned in late 2023 and will have an nectivity in the fields of oil and electricity as well
initial capacity of 1,000 MW. as education, agricultural greenhouses and seed
But Egypt is not just looking north. “We are production.
identifying the relevant players in Africa to part- Following discussions in Amman, Egyp-
ner or work with, and we are in talks with some tian Electricity Minister Mohamed Shaker that
sovereign funds,” Soliman told Bloomberg. He the three countries had proposed establishing
did not name any of the countries in question, a 1,000-MW interconnector “to support the
but he did emphasise that Egypt was keen to exchange of electrical power and take advantage
maximise the use of its renewable energy capac- of the different peak times.” For his part, El Mulla
ity, which has been estimated at 50,000 MW. said that Egypt was interested in opening up a
“We have a competitive sustainable advan- route to transport Iraqi crude oil to Egypt and
tage in exporting electricity to Europe, the Mid- Jordan.
dle East and Africa,” he remarked. “We are keen Details on the latter proposal are scarce, but
to tap industrial economies that are power-hun- it can be assumed that the pipeline under dis-
gry and environmentally conscious.” cussion would be an extension of the planned
Basra-Aqaba pipeline, which would have a
Cyprus throughput capacity of 1mn barrels per day
Meanwhile, Egypt’s ambitions go beyond elec- (bpd). Preliminary work on the $5bn conduit
tricity. Soliman was speaking just days after is thought to be nearing completion, and Iraq’s
Arab News quoted a source inside the Egyptian Ministry of Oil (MoO) is expected to announce
government as saying that Cairo had intensified contract winners by the end of the year.
talks with Cypriot officials on preparations for If all of these projects come to fruition, Egypt
the construction of a joint natural gas pipeline. will truly become a regional energy hub. It will be
The pipeline in question would run across in a position to export electricity to both Europe

P6 www. NEWSBASE .com Week 36 10•September•2020