Al Ahram Weekly
Ioannis Kotoulas
Wednesday 22 Feb 2023
Egypt is becoming Europe’s energy lifeline as a result of its major advantages as a global energy provider.
New realities are forming on the map of global geopolitics and energy cooperation, and Egypt’s new and increasing role is becoming more and more evident.
As Eastern Europe and the Black Sea have become areas of instability, the Mediterranean is emerging as a reliable new region for energy procurement towards the EU. If one looks at the emerging map of energy flows, the pattern of a new orientation from south to north that substitutes for the previous east to west direction is clear.
Egypt has four major advantages as an energy provider in the global energy market.
First, the country has huge natural gas deposits that form the bulk of its energy exports towards the EU. After achieving self-sufficiency in natural gas in 2018, Egypt has made great strides in a short time to emerge as a main energy provider by developing its export dynamics and diplomatic synergies.
Second, it is located in a highly strategic location to the immediate south of the EU and connected to it across the calm Mediterranean Sea.
Third, it has advanced infrastructure facilities for transporting and processing natural gas that include a network of 7,000 km of pipelines, a distribution network of 31,000 km, and 29 gas-treatment plants as well as two liquified natural gas (LNG) facilities in the Idku and Damietta plants. This is a specific advantage that other gas-exporting North African states do not enjoy.
Fourth and equally importantly, it enjoys a stable political environment that has been secured by the government of President Abdel-Fattah Al-Sisi. This promotes international cooperation across three continents by bridging Europe, Asia, and Africa. All this means in essence that Egypt is becoming Europe’s energy lifeline.
If we examine Egypt’s energy potential more closely additional conclusions also emerge.
Egyptian LNG production has been steadily increasing, and in 2022 the country boosted its LNG exports by 14 per cent to reach eight million tons. Ninety per cent of this was delivered to EU markets, according to data presented by Minister of Petroleum and Mineral Resources Tarek Al-Molla in November.
In 2021, seven million tons of LNG was exported, 80 per cent of it to the EU. The data clearly show that Egypt is keeping its side of the bargain by increasing energy exports to an EU that is under severe energy stress. Not only that, but Egypt’s energy exports could increase even more when aided by the four structural factors analysed above.
During the recent Egypt Petroleum Show (EGYPS 2023), held between 13 and 15 February, Al-Molla announced that the country expects to produce 7.5 million tons of LNG in 2023, as its plants have been operating at less than their capacity. They have spare capacity that can further increase the amount of LNG exported towards the EU, Al-Molla said, and EU Commissioner for Energy Kadri Simson reaffirmed Egypt’s importance in addressing EU needs.
In the context of Egypt’s role as an essential energy provider for the EU, Greece’s importance has also been rising. Greece is the closest-lying EU state to Egypt and a valuable diplomatic partner. As the EU continues to face an important energy crisis, the cooperation of these two countries is more essential than ever.
Greece, with its Revithoussa LNG Terminal, is now a key European transit route and a country facilitating energy flows from the southern Mediterranean to mainland Europe. It is developing its own National Natural Gas Transmission System with new compressor stations that will allow for larger energy flows from the south to the north.
Greek grid operator DESFA is investing one billion euros to expand its network capacity by 2032, thus enabling Greece to quadruple its gas-export capacity. As a result, Greece will be able to handle 8.5 billion cubic metres of gas (bcm) annually by 2025, becoming a European gas hub that works in close cooperation with Egypt as the main gas exporter in the Mediterranean.
Greece, owing to its geographical position and its overlapping membership of the EU and the East Mediterranean Gas Forum (EMGF), can function both as a transit country for Egyptian energy exports and as a valuable diplomatic partner in the EU.
Effective cooperation on gas exports will benefit millions of customers in both Europe and Egypt and reduce prices in various related products and services, thereby easing the economic crisis that all states are going through during this internationally unstable period.
Egypt with its ever-increasing LNG exports is already the focal state assisting the EU during the present energy crisis. This is a fact that should be borne in mind in European decision-making circles, in order to develop new synergies of cooperation based on mutual respect and identical interests.
*The writer is a lecturer in geopolitics at the University of Athens in Greece.
* A version of this article appears in print in the 23 February, 2023 edition of Al-Ahram Weekly
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