Message from Cairo about the gas pipeline with Greece amidst the Ukrainian crisis

And while the drums of war… are banging away in Ukraine with EU member states – including Athens – worrying about the security of their citizens’ energy supply, a message about the importance of alternative sources of gas supply, was sent yesterday from Cairo.

According to information, on the first day of the annual EGYPS 2022 event, Egyptian Oil Minister Tarek El Molla spoke about energy cooperation with Greece. In the presence of President Abdel Fattah al-Sisi, 2,000 delegates from 65 countries and executives of the world’s major oil giants, the minister spoke, among other things, about the memoranda of understanding signed last autumn with Greece for the construction of energy infrastructure. According to Tarek El Molla, the agreement paves the way for the construction of an underwater gas pipeline between Egypt and Greece.

Competent diplomatic sources emphasize the importance of the relevant intervention of the Minister of Oil, claiming that it is a message of the importance that Cairo gives to the development of the pipeline. It is recalled that this MoU was signed last November in Cairo between Tarek El Molla and the Minister of Environment and Energy Costas Skrekas. This project, in conjunction with the other co-operation agreement signed last October on the two countries’ submarine electricity interconnection, is a first-class opportunity for Athens to take on the role of securing another alternative source of EU energy supply. In fact, the cable project – the preparatory procedures for the studies – is running faster than the respective IPTO and EETC managers.

The energy cooperation between Greece and Egypt also includes the supply of liquefied natural gas LNG, with DEPA Commerce, as reported, already moving in this direction.

Horrific scenarios

Greece, like other European countries, does not hide its concern for the security of their energy supply in the event of a conflict between Russia and Ukraine.

The majority of Russian gas pipelines, from where Europe meets 1/3 of its energy needs, cross Ukrainian territory. Extreme scenarios do not preclude Moscow from closing the valves, causing energy suffocation for European households and businesses. The energy crisis combined with the events in Ukraine have shown the absence of alternative gas sources that will reduce dependence on Gazprom.

“Athens-Cairo cooperation is a first-class opportunity to develop a new energy corridor for Europe,” comment officials in diplomacy and the energy market. Egypt has significant discoveries of natural gas deposits, while the development of photovoltaic parks in the country provides the possibility of transferring “green” electricity through a submarine cable that will reach our country.

EU countries as well as Athens have developed scenarios for dealing with possible disruptions in gas supply.

At the same time there are very dark scenarios floating around concerning the course of energy prices in the event of a war in Ukraine. Crude oil is already moving towards $ 100 a barrel, while estimates for natural gas show prices even above 180 euros / MWh.

A common assessment of market participants is that the trends of de-escalation of energy prices in Europe are being halted with adverse effects on the finances of households and businesses.