ECONOMY

DEPA, Energean sign letter of intent to supply EastMed with gas

depa-energean-sign-letter-of-intent-to-supply-eastmed-with-gas

Greece’s gas distribution network DEPA and Greek refiner Energean Oil & Gas signed a letter of intent which envisages the supply of two billion cubic metres of gas a year via the Eastern Mediterranean pipeline, just hours before an intergovernmental agreement for the support of the pipeline is signed by Greece, Cyprus and Israel in Athens.

Greek Energy Minister Kostis Hatzidakis said the letter lays the foundations for the natural gas project and is a “milestone” for the sustainability of the pipeline.

“It is a project often described as a pipe dream by many analysts who considered it impossible to accomplish. I am sorry to disappoint them. This pipeline may be a dream for some and a nightmare for others, but today we set the basis for its implementation,” he said after the signing of the letter of intent.

The letter was signed a few hours before the official signing of an intergovernmental agreement for the support of the pipeline in the presence of Greek Prime Minister Kyriakos Mitsotakis, Israeli Prime Minister Benjamin Netanyahu and Cypriot President Nicos Anastasiades.

The EastMed pipeline is expected to have an initial transport capacity of 10 billion cubic meters of gas annually, from the fields in the east Mediterranean to Europe via Crete and central Greece.

Hatzidakis said that the remaining 8.0 billion cubic metres (beyond the 2.0 billion envisaged in the agreement between DEPA and Energean) could be found in other fields.

Constantinos Xifaras, DEPA's CEO, said the agreement is helping the company to become more international and announced that the final investment decision will be reached in two years.

He said that according to preliminary surveys the project is sustainable, with lower costs, adding that the project will help both the wider region and Greece's role in east Mediterranean and the Balkans.

Energean's CEO, Mathios Rigas, said that the project create a way-out for natural gas in the East Mediterranean that raises supply and competition and expressed the hope for successful outcome in drillings to be made in Greece.

The EastMed pipeline will have a length of approximately 1,900 km.