Monday, 27 June 2022

Construction of EastMed Gas Pipeline Becomes Topical Again

ZAGREB, 27 June 2022 - The European Union is trying to slash its gas imports from Russia, and therefore the topic of building the 1,900-kilometre Eastern Mediterranean (EastMed) natural gas pipeline to connect the gas reserves off Israel and Cyprus via Greece and Italy to other EU members is again on the agenda.

Geologist Avraam Zelilidis, a professor at the University of Patras and one of the advocates of this project, has recently told Hina that this project could save the Greeks since the continuation of fuel price hikes might push many citizens into extreme poverty.

For the sake of comparison, Greek companies are the most exposed in the EU to losses and bankruptcy due to the energy crunch, shows an analysis of the European Investment Bank (EIB). In Greece, the EIB’s analysis sees a 27.6% projected increase in the share of firms reporting losses.

Professor Zelilidis told Hina that in his opinion great reserves of natural gas and petroleum are also offshore Greece.

However, so far Greek authorities have seemed reticent about the project. At the first stage of the EastMed project, the EU could cover 10% of its energy needs in this way.

The reasons for reticence seem to be the opposition of Greek shipping companies that currently make a profit on the transport of the imported oil supplies. In addition, there are some environmental fears.

However, the head of the Nicosia-headquartered Isotech Ltd. Research and Consultancy, Xenia Loizidou, has told Hina that every gas pipeline poses a risk to the marine environment but in this case, the issue is no longer environmental but political.

Profesor Zelilidis says that at the later stages this gas pipeline could meet 40% of the EU's needs for gas supplies.

The idea of the EastMed project was supported by the European Commission nine years ago as the Project of Common Interest (PCI).

In 2019, Greece, Cyprus and Israel signed a Tel Aviv agreement on the matter.

The project is being developed by IGI Poseidon, a 50:50 joint venture between the Public Gas Corporation of Greece (DEPA) and Italy's Edison International Holding.

In 2020, Italy confirmed its interest in having a branch of the pipeline passing through its territory.

However, there has been some opposition from Turkey to the project as Ankara complains that the selected pipeline route bypasses the long Turkish coastline to deliver gas from the eastern Mediterranean to Europe. Turkey also alleges that the pipeline project ignores its equal rights over the natural resources in Cypriot territorial waters.

Russia's invasion of Ukraine has made all routes that can reduce dependence on Russian fossil fuels topical again.

New geopolitical and energy market reality

In light of the new geopolitical and energy market reality, on 15 June in Cairo, European Commissioner for Energy Kadri Simson, together with the competent Egyptian and Israeli ministers signed a trilateral Memorandum of Understanding between the EU, Egypt and Israel for the export of natural gas to Europe.

During her participation in the Three Seas Initiative summit meeting in Riga, Commissioner Simson noted that the initial project of the EastMed could be altered, and in this context she mentioned the Aphrodite gas field, the first gas field to be discovered and granted a production license in the eastern Mediterranean Sea, offshore Cyprus.

There is a possibility for the Aphrodite gas field, after it starts operating, to be connected to Egypt and that LNG supplies are then transported to Europe, said Simson in Riga, noting that the construction of the pipeline could take more time. 

Croatia and Cyprus can assist in Europe's energy independence

During his visit to Cyprus in mid-May, Croatian Prime Minister Andrej Plenkovič met with said that President Nicos Anastasiades, who said that Cyprus can help the European Union achieve energy independence. Plenković underscored that the LNG terminal on Krk Island would have a big role in that.

The two officials discussed the energy crisis in the wake of Russia's invasion of Ukraine.

Anastasiades spoke about energy interconnection projects in the eastern Mediterranean, between north Africa and Europe, and about the EastMed gas pipeline which should connect Cyprus with Europe via Greece.

That island state has in recent years discovered significant offshore gas deposits, and the proposed project is still being analyzed to test its economic feasibility, said Anastasiades.

It can help Europe's energy diversification, he told a news conference.

Addressing the news conference in Nicosia, Plenković underlined that the LNG terminal on Krk Island would have a significant role in achieving Europe's energy security. Thought is being given currently to increasing its capacity and not just for Croatia but for the needs of countries in Central Europe, he said.

Croatia can become an energy hub in the north Adriatic for gas and oil, said Plenković. He underscored on that occasion that Europe has to find a new, long-term sustainable alternative to Russia's energy products at an affordable price.

For more, check out our politics section.

Thursday, 19 May 2022

PM Says Croatia Can Play Crucial Role In Providing Energy In Europe

ZAGREB, 19 May 2022 - Croatia can be a crucial country for future energy supply to the countries in its neighbourhood that now fully depend on Russian energy sources, Prime Minister Andrej Plenković said on Thursday commenting on the "REPowerEU" plan to rapidly reduce dependence on Russian fossil fuels in Europe.

Plenković told a news conference that the REPowerEU Plan, which the European Commission presented on Wednesday as its response to the hardships and global energy market disruption caused by Russia's invasion of Ukraine, highlights the need to invest in gas and oil pipelines networks.

This is an opportunity for the Croatian companies Plinacro and Janaf, and talks are being conducted with them to see what can be done, said the PM.

Plinacro, a leading Croatian gas transport system operator, and Janaf, which manages the oil transport network, have initial projections of necessary investments, according to Plenković.

The EU has a high degree of understanding for Croatia's crucial role, and the Croatian energy companies "have important roles in the changed energy structure of Europe," he added.

The PM highlighted three aspects of the EC plan: saving energy, diversifying supplies and accelerating the rollout of renewables.

The €300 billion plan consists of schemes for the disbursement of €225 billion in loans and €75 billion through grants.

The investment in gas and oil infrastructure is important to us because they create possibilities for additional investment, enhance our capacity and help Croatia become a strategic country in the diversification of supply routes, said Plenković.

He said that the government was taking necessary steps to fill gas storage capacities, as required by the EU.

For more, check out our politics section.

Thursday, 13 August 2020

Plinacro: Work on Submarine Section of Omisalj-Zlobin Gas Pipeline Nearing End

ZAGREB, Aug 13, 2020 - The gas pipeline operator Plinacro on Thursday announced that work on the submarine leg of the Omisalj-Zlobin gas pipeline, to transport gas from the LNG terminal on Krk Island, was nearing completion.

"Yesterday evening we laid pipes on the bottom of the Tihi Kanal near Omisalj on Krk Island thus completing the most demanding works on the 750-metre-long underwater leg of the Omisalj-Zlobin gas pipeline. This was technically the most complex part of the job of building 16.7 kilometres of gas pipelines... and 120 people were engaged in the works," Plinacro said in a press release.

Plinacro explained that the works started on July 27 and it took one week to lower the pipes into the sea, and on August 11 and 12 the final work to sink the pipes to the sea bottom were completed. The depth of the sea in that part of the Tihi Kanal is as much as 55 metres, which is just one of the indicators of the complexity of the task, Plinacro said.

The company added that the construction works that started in December last year are going according to schedule.

The investment is worth HRK 430 million and the works should be completed by the end of the year and then the LNG terminal should be up and running, Plinacro said.

The Omisalj-Zlobin gas pipeline is being constructed with the support of the European Commission and a grant of €16 million to cover construction costs. The Croatian government in May this year agreed for Plinacro to take a loan of €33.3 million for the project.

The Omisalj-Zlobin pipeline is an essential part of a system to store, gasify and transport liquefied gas, that is, an essential part of the LNG terminal on Krk Island, which will have a capacity of 2.6 million cubic metres of gas a year.

The LNG terminal is one of Croatia's key energy projects and the value of the floating terminal is €233.6 million. The European Commission has allocated €101.4 million in grants for the project. The terminal should be operational as of 1 January 2021.