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19 May, 2024
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Is there an energy plan, or isn't there?

Cyprus' quest for natural gas exploitation and strategic planning

Yiannis Ioannou

Yiannis Ioannou

When in 2011 Cyprus discovered natural gas in "Aphrodite," the discussion about geopolitical upgrading was so intense that it led to the creation... of a movie titled "Block 12" and the establishment of specialized studies in oil & gas. Twelve years later, the natural gas confirmed to be located in the seabed of "Aphrodite" has never been extracted. The scenarios regarding pipeline routes remain more of a discussion driven by wishful thinking rather than realistic options. The "circles of choices" concerning whether natural gas would be liquefied in Cyprus, whether it would be transported via a submarine pipeline from Israel to Cyprus, or whether a pipeline from the Eastern Mediterranean would reach Italy, have completed entire shifts while the electricity remains unbearable for the average Cypriot household and the average Cypriot business.

If, 17 years after the discovery of "Aphrodite," we are still discussing natural gas in vague terms during the 2028 election campaign, it would be a tragic failure.

The recent intervention of the CEO of ENI regarding the EastMed pipeline and the inclusion of Turkey was, both officially and symbolically, the final blow to a project that seemingly served the public relations of Netanyahu and various involved companies, rather than realistically implementing an ambitious pipeline. Here, we must clarify something that applies regardless of the actors in the industry: The cost of infrastructure, especially a gas pipeline, is determined not only by market laws (supply, demand, gas price per unit, legislation, environmental studies, etc.) but also by geopolitics. And no one, except for those with a short-sighted vision, excludes Turkey from the equation in the region. However, the inclusion of Turkey in the energy cooperation of the region does not come without certain conditions that it must fulfil. This is well understood by all the companies operating in the Cyprus-Israel-Egypt triangle, as well as the key policy influencers in countries that have been producing and exporting natural gas for decades, such as Cairo and Tel Aviv.

The Republic of Cyprus is facing three realistic choices: Firstly, to decisively and seriously resolve the dispute between "Aphrodite" and "Isaias," which has held hostage the exploitation of its only commercially viable deposit for years. Secondly, to carefully analyze the developments in the Eastern Mediterranean region and the MENA countries, focusing primarily on Syria and the Arab Gas Pipeline, the framework of the "Abraham Accords" post-2020, Turkey (of course), and how natural gas represents a field of cooperation rather than competition, even if "we are not to blame for Turkey's self-exclusion." And finally, to prioritize Cyprus's energy autonomy as a matter of national security. National security means cheaper electricity for households and businesses and alternative options if the island is literally bombed. Both Egypt and Israel took such steps before successfully exporting natural gas, either through pipelines (Arish-Ashkelon) or via LNG or FLNG. Natural gas and its arrival in Cyprus from the deposits within its EEZ or from the Eastern Mediterranean are an integral part of this strategic approach. The major challenge for the Christodoulides administration over the next five years will be whether there will be natural gas in Cyprus by 2028, whether an underwater pipeline from Israel to Vasiliko or, in any case, a solution that will contribute to maximizing hydrocarbon resources for the well-understood interest of Cyprus, economically and geopolitically. If, in the 2028 election campaign, we are still discussing natural gas in vague terms, then 17 years after the discovery of "Aphrodite," we will have tragically failed. And it is important, as early as possible, to ask the question: "Is there indeed a strategy?"

[This article was translated from its Greek original]

Cyprus  |  energy

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