ITGI pipeline could transport Mediterranean gas through Greece

The ITGI pipeline's Director of International Activities recently delivered some good news for the pipeline project, which earlier was not selected to transport Caspian supplies to Europe, that the pipeline is in the running to carry eastern Mediterranean gas through Greece.

"By 2018 - 2019, gas from east Med may find its way to Greece and through Greece to the rest of Europe, providing diversification and security of supply as well diversification of routes," ITGI's Director of International Activities Dimitris Manolis told the media at a recent energy conference in Vienna.

"The new fields in eastern Mediterranean – Tamar, Leviathan and Block 12 – are three of the (world's) top five largest discoveries of the decade."

As Western Europe continuously seeks to reduce its dependency on Russia, pipeline projects such as ITGI are of great interest.

Expected to be completed by 2015, the ITGI (also known as TGI or IGI) is an upgrade and extension of existing gas connections.  The project also has an estimated pricetag of €1.25 billion (US$ 1.6 billion).

Earlier this year, the Nabucco West pipeline and the TAP project, both rivals to ITGI, were picked as favoured possible routes to carry Caspian gas from the Shah Deniz II fields, highlighting the political and geological factors that underline the costly development of new pipelines. The decision left the ITGI project to explore other opportunities.

"[The project] remains open to export natural gas from Shah Deniz II, however, due to the latest selection choices by Shah Deniz II we are forced to consider in parallel alternative sources of gas," Manolis said.

Manolis noted DEPA, Texas-based Noble Energy, Israel's Delek Group and the Cypriot government had looked at whether an option for ITGI is to transport gas from new fields in the eastern Mediterranean, which have proven reserves of around 940 billion m³; enough to meet Europe's gas demands for over 18 months.

Contested waters

The waters between Israel, Cyprus and Greece are among the deepest in the Mediterranean Sea, and come filled with political difficulties as well.

"Despite technical difficulties, the construction and operation of such a pipeline is [possible]," Manolis commented, adding that technical feasibility had been proven on earlier projects with similar characteristics, such as the Medgaz pipeline between Algeria and Span and the Galsi pipeline between Tunisia and Italy.

The two governments of Israel and Cyprus generally work well, as evidenced joint exploration agreements. However, experts say deeper regional conflicts will impact on developing Israel and Cyprus's gas fields.

A technically easier option proposed by analysts consists of a pipeline from Cyprus to Turkey, but political disputes over the division of Cyprus have so far prevented joint development. The Turkish government insists any Cypriot gas revenues would have to be shared with Turkish-speaking northern Cyprus.

The politics have entangled the entire region. Turkey does not recognise the Republic of Cyprus, which in turn along with the EU does not recognise northern Cyprus. Additionally, the Lebanese government has said that some of Leviathan's gas may be in its waters, a claim which Israel refutes.

ITGI could also become the European leg of the Gazprom-backed South Stream project, which plans to transport up to 63 billion m³ of gas to central and south Europe, bypassing countries such as Ukraine.

Edited from various sources by Cecilia Rehn.

Read the article online at: https://www.worldpipelines.com/business-news/12092012/itgi_pipeline_could_transport_mediterranean_gas_through_greece/