London-based Energean Energy Company (UK) - the manager of three major natural gas mines in Israel - has just signed a memorandum of understanding (MoU) with Cyfield Energy Group ( Cyberprus) to supply gas to the new power plant in Mari, near the city of Larnaca.
Under the deal, Energean proposed building an undersea gas pipeline, connecting directly from the Karish mine in Israel's exclusive economic zone to the Greek coast.
Energean will be responsible for designing, constructing and operating the entire system, while retaining ownership of the infrastructure.
The project worth about $400 million is awaiting approval from the Israeli and Greek governments. If approved, it would be the first gas pipeline from Israel to Europe, making Cyprus the first EU country to import natural gas from Israel.
Mathios Rigas, CEO of Energean, said the pipeline has a capacity of 1 billion cubic meters of gas per year, enough to meet all gas needs for the Cyfield power plant project, and could share more with other customers on the island.
"We can implement the project within 12 months after it is approved. Energean is willing to self-fund the entire $400 million, but still open the door for future partners, said Mr. Rigas.
Israeli Energy Minister Eli Cohen welcomed the initiative, saying gas exports to Cyprus would strengthen Israel's diplomatic position in the region and Europe, increase stability and generate significant additional revenue for the country.
Mr. Rigas commented that the project not only provides a reliable and sustainable energy supply for Cyprus, but also helps the island escape the "energy isolation" in the EU - where it largely depends on Russian and North African gas supplies.
The Israel- Cyprus pipeline is expected to be a strategic link in the Israel- Cyprus-Greez energy cooperation triangle, contributing to the formation of an East Mediterranean gas connection network to serve Europe.
In addition, Energean is also waiting for approval of another project to transport gas from Israel to Egypt via the Nitzana route, under a 15-year transport contract worth about 4 billion USD. When completed, the system will help Egypt reduce its dependence on imported liquefied natural gas (LNG), while increasing Israel's export capacity in the region.
The current obstacles are only administrative. We believe that governments will soon approve for clear regional benefits, Rigas said, affirming his confidence in the potential of the Eastern Mediterranean as a new gas hub for Europe.
