ALTHOUGH the EastMed pipeline to carry gas from the eastern Mediterranean to Greece and Italy had been dismissed by industry experts as something of a pipe-dream, an agreement was signed in Nicosia on Tuesday to pursue the project. A memorandum of understanding was signed by Cyprus, Greece, Israel and Italy committing to the construction of the pipeline.
A joint statement issued after the meeting, said the four countries “confirmed our intention to cooperate in enabling and enhancing the development and implementation of the EastMed Pipeline Project, as a viable and strategic option and an infrastructure of special interest for gas producing states and the EU.”
It added: “We also expressed our willingness to cooperate in order to facilitate the necessary studies, the permits, the construction and the operation of the project.”
This is a step forward, even though nothing is certain. For instance, the necessary studies could show that the project is not financially viable. At an estimated cost of €6 billion and the price of natural gas at very low levels the construction of a 2,000km pipe might not make financial sense for any investors, even if part of the amount would be funded by the EU under the Connecting European Facility programme. The fact that the European Commission’s deputy director of energy was present suggested that the project interests the EU. Much will depend on the feasibility studies.
That the project is being discussed is a success for the Anastasiades government, even if the Stavros Malas election camp dismissed the signing of the memorandum as “an electoral communication trick”.
The Akel parliamentary spokesman Giorgos Loucaides said President Anastasiades was trying to gain electoral advantage “through hyperbole and misinformation”. It is difficult, however, to support this claim. Why would the Italian and Israeli governments decide to engage in Anastasiades’ ‘electoral communication tricks’?
This seems a bit far-fetched but so was the government’s suggestion that the project was on the cards. Nothing is certain before a feasibility study is completed by experts. Even then, companies would have to be willing to undertake such a costly project which is also far from certain. What is important now, is that the four countries have agreed to explore the viability of the project. Whether an inter-governmental agreement on the project will be signed in 2018 remains to be seen as it is subject to a host of conditions, the most important being financial viability.