Ministry of Energy director-general Shaul Meridor met Wednesday with his counterparts from Cyprus and Greece to discuss potential cooperation opportunities in the energy sector. The session was a follow-up to a meeting held in the Cypriot capital of Nicosia.
The topics of discussion included the potential of natural gas in the Middle East, the possibility of exporting from the Israeli and Cypriot reservoirs, a natural gas pipeline to Greece, renewable energy, fuel alternatives, the integration of natural gas into public transportation, and the laying of a pipe to channel electricity between Israel and Europe.
Israel and Cyprus have a love-hate relationship when it comes to natural gas. Both countries have reservoirs that depend on export contracts for development. And both countries are competing to export gas to Egypt. They may publicly mull constructing shared infrastructure for gas export, but the possibility may be unfeasibly complicated.
Furthermore, Israel can prevent Cyprus from exporting its Aphrodite gas to Egypt and Cyprus can prevent Israel from exporting its Leviathan stock to Turkey.
Because Israel demanded from Cyprus to participate in the approval process for the development of Aphrodite on the claim that part of the reservoir encroaches on its territory. Meanwhile, Israel refuses to sign a unitization agreement between the states to formally delineate the developments of natural gas and oil reserves shared by the pair which delays the development of the reservoir.
It is certainly possible Israel is delaying its signature to prevent Delek and Noble from exporting gas from Cyprus to Egypt before Israel begins exporting. For its part, Cyprus will not approve a gas pipeline from Israel to Turkey which crosses its economic waters.
The three officials also mulled the export of gas from Israel and Cyprus to Greece. A pipeline from Israel to Greece would need to be at least 1,100 kilometers long and pass through waters up to 3,000 meters deep a complicated and expensive option. And Greece only consumes a small portion of natural gas (some 2.7 BCM annually), making the pipelines an financially unsound proposition.
To reach the next profitable market say, Italy, with its 70 BCM per year would require laying down another 600 kilometers of piping, with more than 100 kilometers passing through the Adriatic Sea, which makes it not much of an option.
In terms of electricity, the three parties discussed a potential submarine power cable to connect the countries. The Ministry of Energy estimates such a project would cost €1.5 million. The plan calls for a cable stretching from Hadera to Vasilikos in Cyprus and from there to Crete and Athens. The Ministry of Energy hopes the cable would reinforce the energy security of Israel and allow for a future electricity trade between the nations.
In November 2014, the European Union agreed to fund an exploration of the project to the tune of €1.32 million. Yet even this project seems unfeasible. The evidence is simple since a memorandum of understanding was signed four years ago, in March 2012, the project has not proceeded in the slightest.
One reason could be that a submarine power cable of 1,520 kilometers (329 kilometers between Israel and Cyprus, 879 kilometers between Cyprus and Crete, and 310 kilometers from Crete to Athens) supplying 2,000 megawatts is a complicated venture which is bound to incur losses of electricity.
Meridor said Wednesday: “The cooperation between the three countries is part of a strategic step in the energy markets, which will have both short term and long term effects. Israel’s geographic location necessitates the maintenance of good ties with its neighbors across the sea, and it will create a new platform for joint ventures.”
Published by Globes [online], Israel business news - www.globes-online.com - on April 20, 2016
© Copyright of Globes Publisher Itonut (1983) Ltd. 2016