Page 5 - AfrOil Week 36

AfrOil COMMENTARY AfrOil

“We have a competitive sustainable advantage be in a position to export electricity to both
in exporting electricity to Europe, the Middle Europe and Africa, and it will give Cyprus a
East and Africa,” he remarked. “We are keen to means of converting its as-yet undeveloped gas
tap industrial economies that are power-hungry resources into LNG that can be sold anywhere
and environmentally conscious.” in the world. It will also be able to provide Iraq
with another means of delivering its oil to the
Cyprus Mediterranean market. At the same time, it can
Meanwhile, Egypt’s ambitions go beyond elec- continue to push forward with the development
tricity. Soliman was speaking just days after of its own energy resources, including offshore
Arab News quoted a source inside the Egyptian gas fields such as Zohr and solar farms such as
government as saying that Cairo had intensified the 1,650-MW Benban facility.
talks with Cypriot officials on preparations for
the construction of a joint natural gas pipeline. Greece, Libya and other hazards
The pipeline in question would run across Nevertheless, the country will be operating in
the bed of the Mediterranean from Aphrodite, a complex geopolitical environment. Tensions
a field discovered offshore Cyprus in 2011, to have risen in the region since last year, when
Egypt’s northern coast. It would transport gas Turkey and Libya signed a maritime agreement
from Aphrodite to the Idku and Damietta gas outlining their territorial claims in the Eastern
liquefaction plants, which could then export it Mediterranean. The document has drawn a
to Europe or other markets in the form of LNG. sharply negative response from Greece, which
The Idku LNG plant is owned by Royal has different ideas about where the boundary
Dutch Shell (UK/Netherlands, 35.5%), Petro- lines should be drawn. It has also exacerbated
nas (Malaysia, 35.5%), Egyptian Natural Gas long-standing disputes between Cyprus and
Holding Co. (EGAS, 12%), Egyptian Gen- Turkey, especially now that the latter has begun
eral Petroleum Corp. (EGPC, 12%) and Total collecting seismic data in waters near the former.
Additionally, it has inspired Greece and
(France, 5%). The Damietta facility, meanwhile, That document, which was signed in early “
is divided between by Union Fenosa Gas, a Egypt to draw up their own maritime accord. Egypt is already
joint venture between Naturgy (Spain) and Eni at odds with
(Italy), with 80%; EGAS, with 10%, and EGPC, August, pits both countries against Turkey, as
with 10%. it outlines territorial claims that contradict the Turkey in Libya,
Egypt and Cyprus have said they see the 2019 maritime agreement.
pipeline project as part of a wider effort to pro- At the same time, Egypt is already at odds which remains
mote bilateral and regional energy co-operation. with Turkey in Libya, which remains mired
During a virtual meeting last week, Egyptian in civil conflict. Ankara has supported Libya’s mired in civil
Petroleum and Mineral Resources Minister Government of National Accord (GNA), based conflict
Tariq El Mulla and Cypriot Energy Minister in Tripoli and recognised by the UN, and has
Natasa Pilides noted that their countries were provided military support in the form of both
also working together within the framework of troops and materiel. Meanwhile, Cairo is back-
the EastMed Gas Forum (EMGF). ing the rival Libyan National Army (LNA),
headed by Khalifa Haftar, and has said it may
Jordan and Iraq send some of its own soldiers into the country.
The talks between Egypt and Cyprus followed If these conflicts heat up, Egypt will be hard-
a tripartite meeting between Egypt, Jordan and pressed to achieve its aims. It may have to delay
Iraq. At that meeting, the parties agreed to work work on planned undersea pipelines and trans-
together on interconnectivity in the fields of oil mission cables if Turkey actively contests its
and electricity as well as education, agricultural right to operate in disputed territory. Likewise, it
greenhouses and seed production. may have to divert funds and resources to Libya
Following discussions in Amman, Egyp- if the conflict in the country heats up.
tian Electricity Minister Mohamed Shaker that Meanwhile, there are other factors at work,
the three countries had proposed establishing according to Ian Simm, principal advisor at con-
a 1,000-MW interconnector “to support the sultancy IGM Energy. Speaking to AfrOil about
exchange of electrical power and take advan- the planned pipeline for gas from Aphrodite,
tage of the different peak times.” For his part, El Simm commented: “The timing of the pipeline
Mulla said that Egypt was interested in opening announcement is curious, given that construc-
up a route to transport Iraqi crude oil to Egypt tion work began in July on Cyprus’ Cynergy
and Jordan. FSRU [floating storage and regasification unit]
Details on the latter proposal are scarce, but and LNG terminal. However, it supports Cai-
it can be assumed that the pipeline under dis- ro’s ambitions of becoming an energy hub and
cussion would be an extension of the planned would provide Cyprus with access to the Egyp-
Basra-Aqaba pipeline, which would have a tian market and beyond. Perhaps the thinking in
throughput capacity of 1mn barrels per day Nicosia is that the two projects offer diversified
(bpd). Preliminary work on the $5bn conduit sales opportunities, with Cynergy also capable
is thought to be nearing completion, and Iraq’s of receiving LNG cargoes. While the pipeline
Ministry of Oil (MoO) is expected to announce is expected to take gas solely from Aphrodite,
contract winners by the end of the year. Cyprus also has 3-5tn cubic feet [85-142bn cubic
If all of these projects come to fruition, Egypt metres] of gas reserves at Calypso and another
will truly become a regional energy hub. It will 5-8 tcf [142-227 bcm] at Glaucus.” ™

Week 36 09•September•2020 www. NEWSBASE .com P5