{"id":555539,"date":"2021-11-17T04:00:31","date_gmt":"2021-11-17T04:00:31","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/a-shot-in-the-arm-for-our-energy-hub-ambitions\/"},"modified":"2021-11-17T04:00:31","modified_gmt":"2021-11-17T04:00:31","slug":"a-shot-in-the-arm-for-our-energy-hub-ambitions","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/a-shot-in-the-arm-for-our-energy-hub-ambitions\/","title":{"rendered":"A shot in the arm for our energy hub ambitions?"},"content":{"rendered":"

<\/a> A flurry of regional and international energy news out yesterday could give Egypt a chance to boost its regional energy hub ambitions.<\/strong> An Israel-UAE pipeline agreement that looked to threaten Egypt\u2019s position as a regional energy player and eat into the Suez Canal\u2019s importance as a vital shipping route for fuel appears under threat. And Russia\u2019s long-planned Nordstream gas pipeline to Europe just received the cold shoulder from Berlin, potentially leaving Europe searching for new sources of gas.<\/p>\n

Tel Aviv wants to back out of the UAE pipeline agreement over \u201cenvironmental risks,\u201d<\/strong> Israeli Energy Minister Karine Elharrar said in a radio interview, Bloomberg<\/a> reports. The agreement, signed in October of last year, is one of the biggest to emerge from the normalization of ties<\/a> between Israel and the UAE. The agreement would have seen oil brought from the Gulf to Israel via a \u201cland bridge\u201d and then shipped out to Europe from Israel\u2019s coast on the Mediterranean. Politicians and environmental groups have voiced their opposition to the agreement, saying that the influx of tankers and crude oil was an ecological risk to nearby corals. Elharrar, who is one of the main voices of opposition, said there was a high chance the agreement would be canceled, saying \u201cthere\u2019s no advantage for the state.\u201d UAE Energy Minister Suhail al-Mazrouei declined to comment to Reuters<\/a>.<\/p>\n

Why is this good news for Egypt? Plans for the pipeline would have allowed the oil to entirely bypass the Suez Canal<\/strong> before being shipped to Western countries, potentially depriving us from a source of revenue. Nearly 66% of oil sent from the GCC to western countries is shipped through the Suez Canal or the Sumed pipeline linking Alexandria to the Red Sea.<\/p>\n

Meanwhile, Germany just said \u201cthanks, but no thanks\u201d to its only lifeline amid Europe\u2019s energy crisis: <\/strong>Berlin \u201ctemporarily suspended\u201d certification of the Nord Stream 2 pipeline due to a technicality in German law that required the pipeline\u2019s owners to set up an operating subsidiary before moving forward, Germany\u2019s energy regulator said in a press release<\/a>. The Russia-backed Nord Stream 2 project created a German subsidiary to own and operate the German section of the pipeline, but still needs to \u201cmeet the requirements of the Energy Industry Act for an independent transport network operator.\u201d The project has four months to meet the requirements and achieve certification.<\/p>\n

What does this mean exactly? It\u2019s gonna be a cold winter\u2026 <\/strong>EU officials had already been hesitant about the proposed project, saying they \u201cwant a break<\/a>\u201d from the bloc\u2019s energy dependence on Russia. Nonetheless, the Kremlin had been putting pressure on Germany to get the Nord 2 project certified and have a base to transport natural gas throughout Europe, with rumors<\/a> that Russia had been withholding gas to twist their arm. While Russian President Vladimir Putin had promised to increase gas supply to Germany and Austria amid pressure from the International Energy Agency<\/a> (IEA), there have been only limited increases since then. Germany\u2019s move is \u201clikely to increase fears that Russian flows will remain at relatively low,\u201d writes the Financial Times<\/a>.<\/p>\n

\u2026but maybe we can lend a hand: <\/strong>The East Mediterranean is swimming in natural gas and the recently-ratified East Mediterranean Gas Forum<\/a> brought together Egypt, Cyprus, Greece, Israel, Italy, Jordan and Palestine to coordinate project exploration. Cairo currently houses the headquarters of the forum. Meanwhile, Egypt continues to be a net exporter of natural gas and LNG and the revival of the Damietta liquefied natural gas plant online earlier in the year was expected<\/a> to boost Egyptian natgas supplies to Europe.<\/p>\n

There are definitely prospects in the long run: <\/strong>Earlier this year, Egypt and Israel agreed to build a pipeline<\/a> that will connect Israel\u2019s offshore Leviathan gas field to Egypt\u2019s liquefaction plants in the aim of providing natural gas to Europe. Meanwhile, Egypt also has a planned pipeline<\/a> in the works that will connect Cyprus\u2019 Aphrodite natural gas field to Egypt. The pipeline will allow Cyprus to export its gas to Europe via Egypt\u2019s liquefaction facilities, and is currently expected to be operational in 2024 or 2025.<\/p>\n

Is the window for natgas narrowing as oil prices balance out? <\/strong>The IEA predicts that \u201ca reprieve from the price rally could be on the horizon\u201d as the US and Mexico ramp up oil production. The sentiment echoes Allianz Chief Economist Mohamed El Erian who said this week that he doesn\u2019t see oil prices breaking the USD 100 mark. The comments come as Brent and US crude surged past USD 80 per barrel in recent weeks, thanks to post-pandemic demand outstrippng supply. Bloomberg<\/a> and CNBC<\/a> have the story.<\/p>\n

ALSO- Updates on the Egypt-Lebanon pipeline: <\/strong>Egypt is expected to begin exporting 60-65 mn cbf \/ d of natural gas to Lebanon by early next year through the Arab Gas Pipeline, Oil Minister Tarek El Molla said in a conference in Dubai yesterday, reports Reuters<\/a>. This is a bit of a shift, with El Molla saying that the pipeline would be operational by the end of this year<\/a>. The project is currently undergoing due diligence, El Molla added. The pipeline connects Egypt to Lebanon via Jordan and Syria and will be used to feed a power plant in the north of the country.<\/p>\n

\n

Your top infrastructure stories for the week:<\/strong><\/p>\n