CLOSE
Loading...
12° Nicosia,
25 September, 2022
 
Home  /  News

Op-ed: A new impetus for gas in the Eastern Mediterranean?

'Several resources in the Eastern Mediterranean could be unlocked such as in Israel and in Cyprus'

Opinion

Opinion

by Nikos Tsafos

The war in Ukraine has upended Europe’s energy security. Continuing to rely on Russian energy is no longer tolerable, even if the relationship cannot be severed overnight. As Europe looks for alternative suppliers, the Eastern Mediterranean acquires a new strategic significance. During a crisis, proposals that have been stuck for years can suddenly proceed quickly. Could something similar happen now?

In response to Russia’s war, the European Commission wants to cut Europe’s dependence on Russian natural gas. One element of the plan is to cut the overall demand for gas, something that will make a difference in 2030, but not in 2022. The other is securing non-Russian supplies. In 2022, says the Commission, the European Union should try to import an additional 60 billion cubic meters of gas, helping to offset the 155 billion cubic meters of Russian imports in 2021. This is an opening for suppliers.

It is hard to boost supplies from the Eastern Mediterranean right away. The only way to reach Europe is through the liquefied natural gas (LNG) facilities in Egypt. Additional gas could be exported if Egypt and Israel can pump more from existing fields, especially after a pipeline upgrade allows increased exports from Israel to Egypt in 2023. But the real question is whether the crisis will enable new projects.

Several resources in the Eastern Mediterranean could be unlocked. In Israel, the Leviathan field could double its capacity. In Cyprus, the Aphrodite field remains undeveloped. Two discoveries in Cyprus, Glaucus and Calypso, require more drilling to confirm their resource potential. There are, in other words, identified prospective resources that could be developed under the right circumstances.

A crisis can be an opportunity, but a sense of urgency does not mean that all options are equal. Success depends on three factors. First, a proposal must be technically mature. It takes preparation to do a major project. Second, political support is essential. Prices for gas are high, but everyone understands today’s prices are unsustainable. Public finance will be needed. And third, a project must face obstacles that can be overcome – political expediency can solve some problems but not others.

A ranking of outcomes is possible. Sending gas from Aphrodite to Egypt is the most technically and commercially mature proposal. If Europe relaxed its restrictions on financing fossil fuels, this gas could be in Europe in a few years. This proposal must find a solution on how to share revenues within Cyprus—not a simple task. And this idea must be compatible with Europe’s climate agenda. Demonstrating this to Brussels will be essential to getting support.

The proposal to build a floating LNG facility at Leviathan in Israel could also get a boost, although it is not clear if public support will be available for it. Even so, Leviathan will still have more gas to sell. Sooner or later, Leviathan will re-examine its pipeline options.

A proposed pipeline to Turkey looks more compelling now than in the past. But the discussions for that pipeline were generally held at the political level. It is not clear if the technical work is advanced enough for the project to proceed quickly. Turkey’s energy priorities are also in flux. The country has wanted this pipeline, but will it make sacrifices to advance it? Will other parties cooperate or oppose the pipeline? Is Israel ready for a deal with Turkey? This remains a project of some complexity.

The same can be said of the EastMed pipeline. It still faces many hurdles. The pipeline enjoys political support but has struggled to make commercial and technical progress. It is hardly a shovel-ready project. It is also a bigger, multi-year commitment for Europe and harder to align with its climate agenda, at least without a plan for how this pipeline might evolve over time. The project’s chances have improved a bit. But success is still highly uncertain.

Russia’s war in Ukraine is reshuffling the energy cards. The Eastern Mediterranean could help Europe. But the region can only contribute to energy security if it focuses on technically mature projects, where political expediency can break long-held impasses, and where energy security imperatives can align with the long-term objectives of reducing emissions. Only a few ideas fit these parameters. Today their prospects look better than they did a month ago. But there is still work to do.

Nikos Tsafos (@ntsafos) is the James R. Schlesinger Chair in Energy and Geopolitics at the Center for Strategic and International Studies (CSIS).

TAGS
Cyprus  |  LNG  |  Europe  |  eastmed

News: Latest Articles

X