EU switched on to Med power talks

By David Cronin

Date: 20/11/03

INTEGRATING the EU's energy market with those of its 12 Mediterranean partners will be the focus of a two-day policy pow-wow in Rome at the start of next month.

Ministers attending the Euro-Mediterranean Energy Forum are due to consider a blueprint drawn up by EU officials for giving a greater impetus to energy and gas cooperation.

As the meeting is the first since the power shortages which left parts of Europe and north America in darkness, plenty of attention is likely to be paid to security of energy supplies and the role which Euro-Mediterranean liaison can play in that regard.

Ministers will be examining how a year-old European Investment Bank (EIB) fund can be used to spark developments in the energy field.

Unveiled in October 2002, the Facility for Euro-Mediterranean Investment and Partnership (FEMIP) is scheduled to channel some €8-10 billion in EIB loans to north Africa and the Middle East over a five-year period.

Like so much in the region, the pace of progress is partly being held hostage by the Israeli-Palestinian conflict.

At a meeting in Brussels in July, a joint energy programme for Israel and the Palestinian Authority was agreed.

Its components include the development of a gas interconnection scheme between Gaza and Ashkelon, and an electricity network between Gaza and Netivot.

Furthermore, an accord on setting up an Israel-Palestinian Authority office to support energy cooperation was reached.

Nobody, however, is holding their breath about the prospect of achieving tangible results in an area marred by political violence and in which mobility is severely restricted.

An EU Council of Ministers' paper prepared for the 1-2 December gathering states simply that the plan is to develop the cooperation further by the end of November, if political conditions permit.

Better results are expected for the three "Maghreb" countries. Algeria, Morocco and Tunisia have already signalled their intention to work with the European Commission on achieving an integrated EU-north African electricity market.

At present, trade between the Maghreb and western Europe is quite modest.

It only began in 1997 after an interconnection deal was sealed between Spain and Morocco.

By the end of 2001, this interconnector was running at just 26% of its capacity.

Yet the trade was given a boost in 2001, when Moroccan company ONE agreed to carry electricity from Algerian giant Sonelgaz via its electricity transmission grid.

In order to consolidate on those developments, ministers are likely to concur in Rome that it is necessary to improve the infrastructure through which energy is carried from north Africa to Europe.

Plans have been drafted, for example, for doubling the capacity of the underwater line between Morocco and Spain from 700 to 1,400 mega-watts.

The ministers are also due to assess the environmental hazards associated with energy supplies.

These were dramatically illustrated in November last year, when the Prestige tanker sank some 200km off the north-western Spanish coast, wreaking immense ecological havoc.

The Mediterranean is at particular risk from Prestige-like calamities.

Even though it amounts to just 1% of the world's total sea area, it accounts for around 25% of the world's oil sea trade.

Much of it is destined for Europe as roughly 90% of all oil and oil by-products arriving in the continent are brought by sea.

While new rules on tanker design are intended to avert disasters in the future, the ministers are likely to discuss alternative ways of transporting the world's oil.

One proposal on the table is to relocate up to 20% of oil now transported by sea to pipelines between north Africa, the Middle East, the Black Sea and Caspian Sea regions, on the one hand, and an enlarged EU on the other.

A Euro-Mediterranean Ministerial Conference on Energy will be held in Rome on 1-2 December 2003. The focus of the meeting will be integration of the European Union's energy market with those of its 12 Mediterranean partners.