The Malta Energy Conference opened this afternoon with Energy Minister Konrad Mizzi emphasising Malta’s potential as a gas supply hub linking gas fields in North Africa to Europe

The conference is being held at the Intercontinental Hotel in St Julians, but is actually co-hosted by Malta, Cyprus and the European Commission. Cyprus is itself seeking to become a gas hub, following the discovery of sizeable oil and gas reserves in the seas between Cyprus and the Levant, as well as in nearby Egypt.

Dr Mizzi and his Cypriot counterpart Yiorgos Lakkotrypis opened the conference, and both focused on emphasising their countries’ potential as energy hubs. A short promotional video aired before the opening of the conference also promoted Malta as “the energy hub to watch,”

Malta’s energy minister noted that the country occupied a strategic position right in the middle of Mediterranean shipping routes, and argued that the EU needed to strive to diversify its energy sources. The Mediterranean, he said, was crucial to do so, stating that “opportunity was staring us in the eyes,” due to the significant resources that were still untapped.

He said that the presence of such a powerful group at the conference – attendees include Energy Commissioner Günther Oettinger and EU energy ministers – showed how seriously the EU treated the security of gas supply.

Dr Mizzi observed that the Commission’s Energy Security Strategy called for greater cooperation and for the setting up of a gas hub in the southern Mediterranean. The strategy was published in the wake of the political crisis in Ukraine, through which the lion’s share of Russian gas flows into Europe.

The minister subsequently announced that Malta was seeking a new partnership to “fast-track the development of this exciting source” of energy, adding that Malta’s small size offered an advantage as it could get things going quickly.

Dr Mizzi, who is spearheading Malta’s shift to using natural gas for energy generation, also emphasised the importance of natural gas as an energy source, stating that it was the natural choice for a transitional fuel to power Europe through the 21st century.

In his own address, Mr Lakkotrypis emphasised that significant gas resources have already been discovered in Cypriot waters and in the immediate vicinity, and that he was optimistic about further discoveries since exploration activity was set to intensify.

Both Dr Mizzi and Mr Lakkotrypis stressed, in their address, that action should not be delayed.

“Europe is confronted with a choice: act now or get left behind. Globalisation means that capital flows faster than ever before, and if we do not seize the moment, someone else will,” Dr Mizzi maintained.

His Cypriot counterpart similarly said that the “harsh reality” was that Europe had to act now. Drawing on the ongoing World Cup to make a football reference, he said that people should not position themselves where the ball is now, but where it is heading.

Greek energy minister Yiannis Maniatis also contributed to the debate when the floor was opened to conference participants, and he called on Europe to take initiative, and not serve as passive spectators. His country stands to benefit from projected pipelines linking gas fields in the east to Europe, including a planned pipeline which would link Israeli and Cypriot gas fields to Greece.

Mediterranean gas hub ‘on our agenda’

Energy Commissioner Günther Oettinger delivered the closing address in today’s session – the conference actually concludes tomorrow – and he stressed that the EU had a “vital interest” in the Mediterranean region.

He noted that it was particularly significant that the conference was being organised by Malta and Cyprus, describing both countries as bridges in the Mediterranean.

Mr Oettinger stressed that recent discoveries of natural gas resources in North Africa and in the Eastern Mediterranean presented a good opportunity for cooperation, since Europe was seeking to diversify its energy supply while the countries in the region were seeking to develop their own economies.

“It can be a win-win situation,” the Commissioner emphasised.

Mr Oettinger noted that at present, the EU imports 53% of the energy it consumes, and was dependent on imports for 90% of the crude oil and 66% of the natural gas it required. The EU’s energy bill presently exceeded €1 billion a day, and accounted for over a fifth of the bloc’s total imports.

He said that joining up existing “energy islands” was a priority, stating that it would increase the EU’s flexibility in energy policy.

The Commissioner also pointed out that energy cooperation and regional security were at the roots of the EU, recalling how the bloc started out as the European Coal and Steel Community over 60 years ago.

“ Energy policy has brought Europe closer together,” he maintained, adding that cooperation on energy provided greater security, greater investment certainty for businesses, and ultimately significant benefits for member states and people alike.

Diversification, not independence

The first session of the conference, which was moderated by Dr Mizzi, focused on the outlook for gas in the southern and eastern Mediterranean countries.

Bruno Lescoeur, CEO of Italian energy company Edison, emphasised that Europe faced a huge challenge ahead when it comes to energy, since its domestic resources were running out fast.

He noted that due to the size of its own resources, Russia is likely to remain Europe’s largest supplier of natural gas – by far – well into the future, but also noted that the Mediterranean could be the future for energy, with potential development of new sources across the region.

Mr Lescoeur also maintained that a new gas pipeline between Algeria and Italy was a possibility. One such pipeline, known as GALSI, has been proposed, although the project has hit a number of setbacks.

A political crisis – that involving Russia and Ukraine – may have spurred the EU to pay a greater attention to energy policy, but according to Georgetown University (US) professor Brenda Shaffer, an expert on energy and foreign policy, politics did not necessarily thwart projects that were economically important.

She noted that the Baku-Tbilisi-Ceyhan oil pipeline, which links Azerbaijani oil fields to the Mediterranean via Georgia and Turkey, had originally been deemed unworkable by many, but is now a major source of oil for the Mediterranean region.

Leonhard Birnbaum, a member of the board of management for E.ON, stressed that European efforts must not be about securing energy independence, but about the diversification of energy sources.

“Independence is not feasible, and not even desirable,” he insisted, arguing that cooperation created a common interest that left everyone involved better off.

But Mr Birnbaum pointed out that at energy policy was, in part, about how well one competed with others, and said that it was clear that in this regard, Europe was losing out to the US and starting to lose its advantage in Asia.

He also argued that as the EU strives to build an integrated energy market, it would be beneficial to include Turkey within it – irrespective of whether the country joins the EU or not.

Treating Turkey – which is set to host a significant part of a pipeline linking gas fields in Azerbaijan and nearby regions to Europe – as a mere transit country, he said, would not be beneficial in the long run, as the country was set to become a sizable energy consumer.

The next speaker was a vice-president of Azerbaijani state energy company SOCAR – which is one of the members of the consortium developing a new gas-fired power station in Malta, and which is a major shareholder in the planned pipelines linking Azerbaijani oil fields to Europe.

Vitaliy Baylarbayov emphasised that the pipelines – the Trans-Anatolian Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP) – would also serve to connect southern European markets that are still isolated from each other.

Mr Baylarbayov also stressed that while Azerbaijan could choose to sell gas on the open market, it has instead focused on exporting the majority of its resources to Europe.