Egypt, Greece, Cyprus Pledge More Energy Cooperation

Posted by Joseph R. Fonseca November 9, 2014

Egypt, facing its worst power crisis in decades, on Saturday pledged greater energy cooperation with Greece and Cyprus, a diplomatic move that opened up the possibility of progress in talks to import natural gas from Cyprus.

Cypriot President Nicos Anastasiades said in Cairo that the three countries "discussed boosting cooperation in the field of energy, with the belief that the discovery of hydrocarbons in the eastern Mediterranean can contribute to supporting regional cooperation for stability and prosperity."

The meeting in Cairo between Anastasiades, Egyptian President Abdelfattah al-Sisi and Greek Prime Minister Antonis Samaras demonstrated deepening ties between the three states, who are challenging Turkey's efforts to chart gas deposits in areas of the east Mediterrean claimed by Cyprus.

The emerging alliance fits Egypt's interests well. Its relations with Turkey quickly soured last year after Sisi toppled President Mohamed Mursi of the Muslim Brotherhood, an Islamist movement supported by Turkey's government.

Egypt badly needs natural gas imports. It has been unable to clinch attractive import deals with allies like Russia and Algeria at least partly because it lacks re-gasification technology needed to import liquefied natural gas (LNG).

BG Egypt, a subsidiary of global energy company BG, said last month it was in talks to import natural gas from Cyprus using BG's existing pipeline infrastructure, meaning re-gasification would not be needed.

No details about BG Egypt's talks with Cyprus Hydrocarbons (CHC) were announced by the leaders at a joint news conference.

But the leaders said they would work to strengthen cooperation on a number of issues, including a solution to Cyprus' decades-old partition along the ethnic lines of its Greek and Turkish Cypriot populations.

That split has implications for gas reserves that Cyprus, a European Union member, is keen to develop to the south of the Mediterranean island.

Turkey does not recognise Cyprus, and has reportedly dispatched a ship to collect seismic data in the disputed waters -- a precursor for possible gas exploration.

The Cairo meeting came a day after Greece urged Turkey to stop harassing Cyprus while it looks to exploit offshore natural gas fields, wading into the island's dispute.