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19-09-2018 12:01

Remarks by the Minister of Energy, Mr Y. Lakkotrypis, at the signing of the agreement between Cyprus and Egypt for the submarine natural gas pipeline

On the occasion of the signing of the Intergovernmental Agreement, between the Republic of Cyprus and the Arab Republic of Egypt, concerning a direct submarine natural gas pipeline, I welcome to Cyprus my good friend, Egypt’s Minister of Petroleum and Mineral Resources, Mr Tarek El Molla, as well as his associates. I also extend a warm welcome, on behalf of the Government of Cyprus, to the Head of the International Relations and Enlargement Unit, of the Directorate-General for Energy of the European Commission, Mrs Anne-Charlotte Bournoville, and, of course, to the representatives of our partners in the “Aphrodite” natural gas field, the consortium of Noble Energy, Shell and Delek.

Today’s signing is an important milestone, not only for Cyprus but also the entire Eastern Mediterranean region. It constitutes, for Cyprus, another crucial step towards its goal to efficiently exploit the underwater wealth in its Exclusive Economic Zone (EEZ), and specifically gas from “Aphrodite”, for the benefit of all Cypriots. In addition, it reinforces the joint efforts by the countries in the Eastern Mediterranean to establish the synergies required for attracting the multibillion infrastructure investments for hydrocarbons production and transport.

The Pipeline Intergovernmental Agreement we are signing in a few minutes is, in fact, the first of its kind in our shared region, reaffirming once more the close traditional ties between Cyprus and Egypt, and establishing, in the most formal way, our two nations’ strategic partnership in the energy sector. Crucially, both the Agreement and the planned pipeline it concerns, have the full support and backing of the EU. After all, we are essentially talking about a European pipeline, intended to transport Cypriot natural gas to Egypt for reexport to Europe in the form of liquified natural gas (LNG).

The Agreement itself aims to promote the transport of natural gas from Cyprus to Egypt by safeguarding the secure and timely development, construction and operation of a direct submarine pipeline across our respective EEZs. To this end, a joint monitoring committee will be established within the next 30 days, consisting of representatives from the energy ministries and regulatory Authorities of the two countries. Moreover, Cyprus and Egypt are now committed to establishing and maintaining the necessary and favourable conditions for the project’s implementation, including the timely issuance of permits, whilst complying at all times with international treaties and rule of law and, of course, the EU’s environmental and safety standards and practices. For the latter, appropriate external emergency response plans must be prepared and tested regularly.

Respecting fully the sovereign rights of all our neighbours in the Eastern Mediterranean, has always been at the forefront of the energy cooperation between Cyprus and Egypt. To be able to exploit the region’s hydrocarbon discoveries safely and without dispute or conflicts and to ensure that its potential of becoming a new source of energy for the EU is fulfilled to the maximum, East Med countries need to work together, acting in accordance with international law and, more specifically, the UN’s 1982 Convention on the Law of the Sea. The resulting geopolitical alignment of interests is the only way, we feel, to build trust and strengthen relationships, both essential elements for regional stability and, consequently, legal and investment certainty.

Within this framework, Cyprus and Egypt have been working closely together for more than fifteen years. Inter alia, we signed in 2003 the Delimitation of the Exclusive Economic Zone, in 2013 a Framework Agreement concerning the development of cross-median line hydrocarbon resources and in 2015 a Memorandum of Understanding concerning cooperation in the hydrocarbons sector. Additionally, a Risk Diversion Agreement was signed in 2016, laying the groundwork for today’s Intergovernmental Agreement and aimed at facilitating the transport and sale of natural gas from the “Aphrodite” field through Egypt, by securing ownership and destination.

As such, I would like to thank Minister El Molla and his associates, including the officers of the Egyptian Natural Gas Company, for their close cooperation and constructive approach during our talks on drafting and finalizing the Pipeline’s Intergovernmental Agreement. I also wish to express my gratitude to the European Commission for their guidance and to the members of the Ministry of Energy, Industry, Commerce and Tourism, the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Agriculture, Natural Resources and Environment, the Law Office of the Republic of Cyprus and the Cyprus Hydrocarbons Company, for all their hard work.

Once build, we are confident that the direct submarine natural gas pipeline crossing the Cypriot and Egyptian EEZs, will be beneficial to all parties involved. Ultimately, through reexports of “Aphrodite” gas in the form of LNG, the pipeline will allow for the transport of the first molecules of East Med gas to the EU, thus contributing to the Union’s much sought-after security of supply and diversification of sources and routes.