Greece is trying to see how it could be viewed as a transportation hub and a services center

Monday, January 24, 2011

By Paul Taylor


ATHENS: Greece has begun exploratory talks with Israel about cooperation on transporting recently discovered offshore Israeli natural gas to markets in Europe, Investment Minister Harris Pamboukis said.

Pamboukis told Reuters he discussed the idea on a visit to Israel last week to build ties between the eastern Mediterranean states following an ice-breaking trip to Athens last year by Israeli Prime Minister Benjamin Netanyahu.

“The Israelis have found big quantities of offshore gas in the Mediterranean. We are trying to see how Greece could be seen as a transportation hub and a services center, since it is on a natural road to the Balkans and Europe,” he said in a weekend interview.

Pamboukis stressed he had held only exploratory discussions on transporting gas from the Leviathan field, whose discovery was announced last month, containing an estimated 16 trillion cubic feet (450 billion cubic meters) of natural gas.

Relations between the two countries were frosty for a long period because of Greece’s strong support for the Palestinians and close ties with Arab states.

However, ties have warmed partly as a result of a chill between Israel and its traditional strategic partner Turkey, Greece’s neighbor and historic rival.

Israel is already reported to be discussing potential cooperation on liquefied natural gas with Cyprus, a close ally of Greece.

Cyprus has angered Turkey by prospecting for offshore gas in Cypriot territorial waters between the island and Israel.

Pamboukis said he had been appointed Greece’s coordinator for relations with the Jewish state as well as for seeking strategic investments from China, Qatar and France.

Greece needs foreign investors to help spur its economy, which shrank by over 4 percent in 2010, as it implements a draconian austerity plan agreed with the EU and the International Monetary Fund and last May in return for a bailout to save the country from bankruptcy.

Foreign direct investment shrank from 6.9 billion euros (around $9.37 billion) in 2006 to 4.5 billion in 2009, Investment Ministry figures show.

Greece was ranked 83rd of 133 states in the World Economic Forum’s competitiveness survey for 2010-11, with respondents citing bureaucracy as the main hurdle to doing business.

Parliament passed a “fast track” law in November to cut red tape for priority investments in tourism, energy, transport, health and telecommunications in a country long shackled by a web of regulations, corruption and combative unions.

A Qatari consortium dropped plans last October to build a 3.5 billion euro energy hub in Greece, dousing prospects that the cash-rich emirate would invest up to $5 billion in sectors from banking and real estate to energy and telecommunications.

Pamboukis said he was talking to Qatar about possible investment in a project worth estimated to be worth between 5 billion and 7 billion euros to develop Hellenikon, the former Athens international airport – a prime site on the city’s coastal southern fringe.

“I don’t hide that we are speaking with Qatar about this and they are showing support, but we have not yet got into the stage of studying whether it will be profitable,” he said.

The development was likely to include a technology park, a university campus and possibly a financial center in addition to hotels, a marina and a large green space he said would be almost as big as London’s Hyde Park.

Pamboukis said China was considering creating a regional fund for investment in southeast Europe under the China Development Bank.

Chinese companies were eyeing investments in the Aegean port of Thessaloniki, and in Greek railways, both slated for privatization, but this would be done by competitive tender under European Union rules, he added.