Natural gas: The prospects for Greek FSRUs from the EU-Israel-Egypt MoU

The MoU signed in Cairo between the European Commission and Israel and Egypt has paved the way for alternative natural gas supply sources for the Greek and Balkan markets.

The Memorandum enables the export of Israeli gas through LNG terminals in Egypt, namely Shell’s Idku with a capacity of 10 billion cubic meters. and ENI’s Damietta with a capacity of 7 billion sq.m. annually.

The MoU is very significant as the 27 have agreed on the REPowerEU strategic plan for divesting from Russian gas by 2027, since it provides an alternative source natural gas.

FSRUs

The prospects to the Greek energy companies to conclude LNG supply agreements are now open given the excellent energy link Greece has cultivated with Israel and Egypt.

Four FSRUs are currently under development, two in Alexandroupolis, one in Corinth and one in Thessaloniki. One in Alexandroupolis and that of Corinth are expected to be up and running in 2023 and the other two gradually by 2025.

The specific LNG infrastructures will be able to transfer quantities of the order of 22.5 billion cubic meters to the Balkan countries and even to Ukraine. Therefore the Greek FSRU will need LNG shipment to cater to the needs of these markets and to amortize investments.

Energean

The EU – Israel – Egypt agreement, however, holds additional interest for Greece.

Energean is one of the natural gas producers operating in the Israeli offshore concessions.

The Greek company that is listed on the Tel Aviv and London stock exchanges has signed an MoU with Egyptian EGAS for the supply of quantities of billions sq.m. of natural gas, annually, from the Israeli deposits it is exploiting. Energean is also in the process of a large project through which it recently discovered the Athena exploration well and located the region the company calls the Olympus Area which could contain 58 bcm of gas.

The “Olympus Area” is expected to be used to supply the gas hub that the company is interested in using in Cyprus, creating an additional route of gas from the East Mediterranean to Europe and to the Greek market.