Greece external relations briefing: The Ukrainian crisis and the Greek energy diplomacy

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Weekly Briefing, Vol. 50. No. 4 (GR) April 2022

 

The Ukrainian crisis and the Greek energy diplomacy

 

 

 

Summary

The briefing presents the current developments in Greek energy diplomacy, following the Russian invasion of Ukraine. Countries in the Eastern Mediterranean region are developing projects to supply with energy North Europe. Greece is a key player for their implementation. Among others, the cooperation in energy sector may offer a window of opportunity for changing the region’s geopolitical balances and establishing stability in the Southeastern region.

 

Introduction

The Russian invasion of Ukraine has accelerated inflation and rise energy prices. These events have put pression to the EU countries for urgently decreasing their energy dependence from Russia. The Greek government during the last months has initiated numerous bilateral and trilateral high-official talks on the energy sector. In addition, due to the country’s geopolitical position, Greece can play a key role to the current energy crisis and offer alternative solutions to the European states. Deepening of cooperation between Greece, Cyprus and Israel, as well as Greece, Cyprus and Egypt is currently under discussion and projects such as the the EuroAsia and EuroAfrica interconnectors have been accelerated.  Greek-Italian cooperation and the implementation of EastMed pipeline has also been recently discussed, despite previous hesitations from the Italian side.

Following the recent decision of Gazprom to halt energy gas supplies to Poland and Bulgaria, EU states need to speed up their plans of energy alternatives. Greece’s energy diplomacy currently works at its peak and is expected to continue efforts not only for energy autonomy, but for participating and delivering energy projects for supplying northeastern and western states of Europe in the near future.

 

Background

Energy diplomacy is a high priority of the country during the last decade. The current Russian invasion of Ukraine and the urgent need of the country to reduce the dependence from Russia in the energy sector, has brought the issue at the top of the agenda of the government. Energy strategies of the government are mostly related to the sectors of natural gas and oil pipelines, electricity grids, liquefied natural gas (LNG) storage stations and Renewable Energy Sources (RES).

The main goal of the international energy relations of the country is to ensure energy security, diversification of sources and competitiveness of prices as well as becoming an energy transit hub from east to west and from south to north. In order to achieve these goals many bilateral, trilateral and quadrilateral cooperation have been established, mainly with countries of Eastern Mediterranean, were the Greek-Cypriot cooperation works as the cornerstone. Another major component to the country’s energy relations is the EU policies, including the Trans-Anatolian Pipeline (TANAP), the Trans Adriatic Pipeline (TAP) and the South Caucasus Pipeline Expansion (SCPX), transporting natural gas from the Caspian Sea to the European market (Southern Italy) via Georgia, Turkey, Greece and Albania (1).

 

Latest events in the energy sector

One of the most important projects that is currently under discussion and is pursued by the Greek government is the EuroAfrica Interconnector, which is 2,000MW capacity electricity interconnector between Greece, Cyprus and Egypt. The EuroAfrica Interconnector comprises a subsea DC cable and HVDC onshore converter stations at each connection point. The project has a total length of 1670kms and it is estimated to be concluded in 2023 (2).

Greece has close relations with Egypt the past decade and has proceed to the finalization of numerous cooperation agreements. Most recently, on 3rd March, the Greek PM K. Mitsotakis and the President of Egypt Abdel Fattah El-Sisi, along with the team included in the project of the EuroAfrica Interconnector had a teleconference. The President of the European Investment Bank, Werner Hoyer, also attended the meeting. During the meeting both parties discussed the importance of the project and ways to move forward.

Furthermore, on 14 April 2022, Kostas Skrekas, the Greek Environment and Energy Minister, had a meeting with Sabah Mashali, chairman of the Egyptian Electricity Transmission Co. And Ahmed Saeed, the representative of Egypt’s electricity and renewable energy sources ministry, in Athens. The Greek Minister stated that electricity interconnection between Egypt and Greece, will reinforce national energy security by protecting the country from imported crises and simultaneously will boost the country’s geopolitical role in the Southeast Europe and Eastern Mediterranean region. In addition, the two sides discussed about the prospects of adding the project to the list of EU Projects of Common Interest, since it will elevate the energy autonomy of the Union (3). The project of EuroAfrica Interconnector was expected to be discussed also in May and PM Mitsotakis initially was planning to organize the visit of the President Abdel El-Sisi in Athens for this purpose. However, the meeting will be delayed due to the scheduled visit of Mitsotakis in Washington and his meeting with the US President Joe Biden, on 16th May.

Another important project that is a priority for the Greek government is the EuroAsia Interconnector. The project is a leading European Project of Common Interest (PCI), connecting the national electricity grids of Greece, Cyprus and Israel via a 1,208 km subsea HVDC cable. The project is expected to be concluded in 2025 (4). On the 11th April 2022, the Energy Ministers of Greece, Cyprus and Israel held a trilateral meeting in Jerusalem in order to discuss about the perspectives on the sector of energy and the deepening of the cooperation of the three countries. Specifically, during the meeting the Ministers referred to the EuroAsia Interconnector, as well as the EastMed natural gas pipeline. Moreover, the three parties examined the possibility of transporting LNG with ships from the region of Eastern Mediterranean to Europe, by using the liquefaction gas facilities of Egypt. Further, the Ministers examined the possibility of the creation of an LNG terminal in Cyprus in order to better use the reserves of natural gas in the region (5).

As already mentioned, the EastMed is also a project that has recently been discussed among high-level officials. The project concerns the creation of a natural gas pipeline, which will transport East Mediterranean gas from Levantine Basin to Greece via Cyprus and then through Poseidon and IGB pipelines into Italy and other states in Europe. In 2020 the leaders of Greece, Cyprus and Israel signed the accord of EastMed in Athens. However, in January 2022 the US withdrew the support to the project, due practical reasons of high cost, as well as geopolitical reasons, since the project excluded Turkey and was closely tied with tensions in the region.

Due to the ongoing war in Ukraine, concepts of materializing the project of EastMed have been revived. Despite the previous hesitation of Italy for participating to the project, in the beginning of April the Italian parliament called the PM of Italy Mario Draghi to examine the prospects related to the construction of the pipeline. The text published by the Italian Parliament argued that the implementation of EastMed will benefit the country as it will strengthen its energy position in case of new regional crises, as well as Italy’s presence in the Mediterranean region. It should be mentioned that the Greek-Italian energy cooperation is already developing harmoniously due to the operation of the TAP pipeline through which Europe is supplied with natural gas from Azerbaijan. Thus, recent events in the Italian parliament may open the way for deepening the cooperation between the two countries (6).

Despite the later events, the position of the US on the implementation of the EastMed has not yet changed. Ambassador Victoria Nuland, Under Secretary of State for Political Affairs, has recently stated in Kathimerini newspaper that “We do not have to wait ten years and spend billions of dollars, we have to transport gas now” meaning that the EastMed is not a solution according to the US at the moment. Instead, she noted that the US favor the transfer of LNG under a scheme of cooperation between Greece, Israel, Egypt, Cyprus, as well as Turkey and stressed that the region has the potential to become the energy engine for Northern Europe. Nuland also stated that “Greece not only provides options for everyone, but also has the opportunity to become part of the solution for the future” (7). The Greek Minister of Foreign Affairs Nikos Dendias during the Delphi Economic Forum VII, held in 6-9 April, referred to the comment of Victoria Nuland and explained that the Ambassador did not actually say that the project is dead but rather that is not useful at the current moment. Dendias stressed that the project is “alive and kicking” (8). The expected visits of the Italian PM Mario Draghi in 10th May and of the Greek PM Mitsotakis in 16th May in Washington will contain in the agenda discussions on energy security and energy projects, possibly including the EastMed pipeline prospects.

On 12 April PM Mitsotakis announced the start of research aimed at the exploitation of natural gas deposits in the Ionian and southwestern Crete. It is estimated that the largest potential deposit is located west and southwest of Crete. The research will be run by a three-member consortium comprising Total Energies, ExxonMobil and ELPE (9). Of course, it is not expected to directly bring results. The project is more likely to have future outcomes, which may be beneficial for the country since the war in Ukraine continues, as well as its future consequences. However, on 21 April, the company Total Energies, following research in Western and Southwestern Crete announced its decision to withdraw from the two blocks in Crete (10).

 

Conclusion

It is evident that the Greek government has set as its top priority the acceleration of participating and implementing projects in the energy sector. At the center of the current energy developments lie the projects of EuroAfrica and EuroAsia interconnectors, as well as other initiatives, such as the EastMed pipeline. Further developments are expected in the near future concerning the gas and electricity supply of Greece and other European countries from the region of Eastern Mediterranean.

 

 

References