To solve its energy crisis, Europe should invest in EastMed, says El Molla: Gas from Eastern Mediterranean countries could help tame Europe’s energy crisis — provided that development partners like the European Bank for Reconstruction and Development (EBRD) and European Investment Bank (EIB) help fund the drilling, Reuters reports Oil Minister Tarek El Molla as saying.

What El Molla said: “If we need to secure the energy quickly … I think we need to incentivise these companies, the countries, the developers, by securing them funds,” the minister said during the East Mediterranean Gas Forum in Nicosia. El Molla emphasized that he wasn’t talking about commercial loans but “concessionary funds with easy access and relaxed terms.”

The EIB and EBRD have axed loans to oil and gas projects as part of climate change goals and now face pressure to reverse course given the cut-off of Russian natural gas to the continent.

El Molla’s argument: Hydrocarbons are a key part of the green transition. “If you are not going to talk about hydrocarbons, how are we going to accelerate these projects?” El Molla said. Gas development could go ahead in parallel with “important efforts” to create a “green corridor” that would see the Eastern Mediterranean region supply Europe with green hydrogen and electricity from renewables, he added.

But even with concessional funding, developing EastMed gas infrastructure is a long game, according to an article this weekend in The Economist. Egypt’s LNG facilities — which process natural gas from Israel for re-export to Europe — can serve only 2% of the continent’s energy demand when running at full capacity, it suggests. Local demand is also on the rise, cutting into the amount of gas that can be sent for export. “Expanding capacity will take years,” according to the newspaper.

Our LNG exports could hit USD 1 bn per month by January: That’s the government’s current target, Finance Minister Mohamed Maait said in a statement over the weekend. LNG exports have averaged USD 600 mn per month in revenues during the last quarter of the 2021-2022 fiscal year, he said.

BACKGROUND: As Russia pulls its oil and gas from European markets amid the fallout from the Ukraine war, the Egyptian government has redoubled efforts to position the country as a regional energy hub serving the continent. Egypt is a founding member of the EMGF, which brings together countries in the region to coordinate energy policy and develop the region’s gas reserves.The Oil Ministry has placed particular emphasis on building stronger ties with Israel, in June signing a nine-year agreement in June with the country to increase gas exports to the EU through our LNG facilities.

ALSO IN EASTMED ENERGY- Cyprus and Greece have broken ground on the EuroAsia Interconnector, according to Reuters. The EU-funded subsea cable will have capacity to transmit an annual 2 GW of electricity generated by natural gas and renewables from Cyprus and Israel,. The 2 GW EuroAfrica Interconnector, which adds Egypt to the grid, is expected to start commissioning (an industry term for entering the final stages of pre-launch testing) this December.