The
European Union and Egypt have signed a Memorandum of Understanding (MoU) for a
strategic partnership on energy.
Egypt’s
Electricity and Renewable Energy Minister Mohamed Shaker, Petroleum and Mineral
Resources Minister Tarek al-Molla, and EU Climate Action and Energy
Commissioner Miguel Arias Cañete signed the MoU during the latter’s official
visit to Egypt on April 23.
Cyprus
Natural Hydrocarbons Company CEO Charles Ellinas reminded that the Egyptian
government approved in August 2017 a new gas law liberalising and opening its
natural gas sector to private investors. “This has the potential to turn Egypt
into a regional gas hub and open the way to develop and export the East Med’s
natural gas resources,” Ellinas told New Europe, adding that Egypt has an ideal
location, with the Suez canal connecting Asia and East Africa to Europe, while
facilitating the transportation of oil, products and liquefied natural gas
(LNG), with a real potential to become the region’s energy hub. “Without a hub,
the East Med will struggle to export its gas,” he said, noting that
long-distance pipelines face commercial challenges and lack of flexibility
regarding the destination.
“Israeli
and Cypriot gas finds, and potential gas reservoirs off Lebanon, could create a
gas hub right on Europe’s doorstep. But trying to figure out how best to
develop this gas is fraught with commercial and geopolitical challenges,”
Ellinas said.
According
to the European Commission, the visit was a key part of the external dimension
of the Energy Union, a political priority of the Juncker Commission. Cañete was
accompanied by an EU delegation including Dominique Ristori, the Director
General of the Directorate-General for Energy within the European Commission.
“The EU and
Egypt are strategic partners on energy,” Cañete said ahead of his visit, adding
that the potential for even closer energy cooperation between the EU and Egypt
is enormous.
“Egypt can
lead the way of the clean energy transition in the Eastern Mediterranean and
thus contribute to the Paris climate goals and worldwide decarbonisation
effort. Likewise, Egypt is becoming an important gas and electricity hub that
can provide energy security for the EU and for the entire region. There is much
to gain in terms of access to new sources of energy and market opportunities,
for European and Egyptian citizens and businesses alike,” Cañete said, adding
that the EU stands ready to support Egypt in its energy market reforms and to
boost sustainable energy investment.
During his
stay in Egypt, Cañete visited the Zohr onshore gas processing facilities where
he praised the efforts made to implement the giant Zohr offshore gas field
project, discovered by Italian energy major ENI.
Ellinas
told New Europe that Egypt is well on the way to self-sufficiency by the end of
2018 and LNG exports by 2019, due to Zohr and other newly developed gas-fields,
and its use of existing low-cost liquefaction plants at Idku and Damietta, with
most of the LNG destined for Europe through existing contracts.
“Whatever
happens with gas from Israel and Cyprus, which is commercially challenged,
Egypt has the potential to go it alone in terms of gas exports by 2019,”
Ellinas said. He noted, however, that a major discovery in Cyprus’ Block 10 by
US energy major ExxonMobil later this year could alter the gas balance and
associated geopolitics in the region.
https://www.neweurope.eu/article/capitalizing-zohr-eu-egypt-sign-mou-strategic-energy-cooperation/