Egypt, Greece and Cyprus Pledge Energy Cooperation

Posted: November 11, 2014 in Free Trade, Technology and Energy

SOURCE: http://www.naturalgaseurope.com/egypt-greece-and-cyprus-pledge-energy-cooperation

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Egypt, Greece and Cyprus Pledge Energy Cooperation

November 10th, 2014

Egyptian President Abdel-Fattah al-Sissi welcomed Greek Prime Minister Antonis Samaras and Cypriot President Nicos Anastasiades in Cairo on Saturday 8 November. Egypt, Greece and Cyprus announced the beginning of a tripartite cooperation by the signing of the Cairo Declaration which includes mentions of the Cyprus’ problem and Turkey’s recent intervention in the island’s EEZ.

The three countries expressed their wish for a fair, just and comprehension settlement for the division of the island. They also stressed on the importance of applying the principles of UNCLOS in the delimitation of Exclusive Economic Zones pledging to accelerate the process that would lead to the final definition of their respective maritime zones. Turkey’s recent actions in Cyprus’ EZZ was also condemned: The three countries urged Turkey to terminate all seismic exploration within the maritime zone of Cyprus and to avoid similar activities in the future. According to the text of the declaration: “We recognize that the discovery of important hydrocarbon reserves in the Eastern Mediterranean can serve as a catalyst for regional cooperation. We stress that this cooperation would be better served through the adherence by the countries of the region to well established principles of international Law. In this respect, we emphasize the universal character of the UN Convention on the Law of the Sea (UNCLOS), and decide to proceed expeditiously with our negotiations on the delimitation of our maritime zones, where this is not yet done.”

The meeting and the declaration that followed reveal that the three countries are envisaging a close partnership in the years to come. The Eastern Mediterranean is undergoing major changes as the discovery of natural gas promises to turn the interested parties into net natural gas exporters. The opportunity is significant as it could bring not only natural gas independence for the countries concerned but it would also lift the economy.

The role of Egypt is unfolding and it is likely that Cairo will be playing a strategic part in Eastern Mediterranean gas developments. The mismanagement of Egypt’s gas resources, the declining production and the growing consumption are putting a strain on the country’s energy outlook. Egypt would benefit from pipeline imports of natural gas from its immediate neighbours. The energy crisis that Egypt is undergoing prompted the signing of a contract between Höegh LNG Holdings and EGAS for a floating storage and regasification unit (FSRU) that would permit LNG imports.

Egypt’s appeal is not only for its potential to become a nearby customer. It could also serve as an export route. It is currently engaged in serious talks with Israel to import gas from its neighbour’s largest fields. Israel could use Egypt’s unused export terminals to reach export markets.

Whilst the meeting between Greece, Cyprus and Egypt gives hopes of future regional cooperation, caution is required: a pending maritime border dispute between Lebanon and Israel is yet to be resolved, Turkey still opposes Cyprus’ exploitation of its maritime zones and a solution for the division of Cyprus must be achieved.

The full declaration can be accessed here: http://www.moi.gov.cy/moi/pio/pio.nsf/All/C9E12F410347FB37C2257D8A004CF2C5?OpenDocument

Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. She reads International Relations and Contemporary War at King’s College London focusing on Natural Resources and Conflict. She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat

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