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    EU signs agreement to buy natural gas from Israel through Egypt


    June 16, 2022 - CE Noticias Financieras

     

      With the Russian invasion of Ukraine turning into a war of attrition and the need to drastically reduce energy dependence on Russia, the European Union (EU) has reached an unprecedented agreement with Israel and Egypt whereby it will receive Israeli natural gas through the Arab country.

      On the sidelines of the Eastern Mediterranean Gas Forum (EMGF) meeting in Cairo, European Energy Commissioner Kadri Simson, Israeli Energy Minister Karine Elharrar and Egyptian Minister of Petroleum and Natural Resources Tarek El-Molla signed a memorandum of understanding that seeks alternatives to Russian supplies.

      "This agreement will contribute to our energy security. There is a war on European soil and we are in the midst of complete diversification of Russia's energy sources to others that can be relied upon. And you can be trusted," said European Commission President Ursula Von der Leyen in the Egyptian capital.

      Hours earlier and during her visit to Jerusalem, the European leader accused Moscow of "blackmail" in all matters concerning the supply of fossil fuels. "We will work on the stable supply of natural gas to the EU from the Eastern Mediterranean region," she said adding on the other hand that they are "building an infrastructure suitable for renewable energy, the energy of the future."

      Historic agreement

      "This is a statement to those who see in our region only negative forces and conflicts. This historic agreement shows us that we are paving a new path of cooperation, solidarity and stability. We are changing the way we are seen in the region," said Elharrar. Noting that this is the first time her country will export natural gas to Europe and citing other gas agreements, the Israeli minister commented that "tiny Israel becomes a significant player in the global energy market."

      With no pipeline between Israel and the EU, Egypt plays a vital role as it will receive Israeli gas, via the pipeline between the Ashkelon coast and the Sinai, and liquefy it before it is shipped to the Old Continent. The signing also reflects the energy partnership between Israel and the first Arab country with which it signed peace in 1979.

      The agreement, which is valid for three years and will be automatically renewed for another two years, also states that the EU will encourage companies from its 27 member countries to participate in tenders for natural gas exploration in the economic waters of Israel and Egypt.

      Two weeks ago, Elharrar announced the resumption of gas exploration on its territory in the Mediterranean rectifying the intention to freeze it for a year that it had justified with the aim of focusing on green electricity.

      New strategic Israeli resource

      From importing gas, Israel has become a regional power in this field thanks to the discovery of large fields in the last decade. A strategic energy, economic and diplomatic trump card that has helped it to forge a solid alliance with Greece and Cyprus, resulting for example in the agreement for the construction of the EastMed gas pipeline, to sell to Egypt and Jordan and to contribute to the Turkish President, Recep Tayyip Erdogan, unexpectedly deciding a few months ago to promote a rapprochement after more than ten years of bad relations and strong accusations.

      The crisis unleashed because of the war in Ukraine, which this Tuesday is 112 days old, has served as a reminder, in case it was necessary, of the enormous dependence on Russia, which supplies 40% of the gas and 25% of the oil consumed by the EU. The ultimate goal of Brussels is not to be dependent on the Kremlin as soon as possible, so they would like the process of supplying Israeli natural gas to be accelerated, perhaps so that it can become a reality as early as next winter.

      We are surprised that the energy issue played a central role in Von der Leyen's visit to Israel where she met with President Isaac Herzog, Prime Minister Naftali Bennett and Foreign Minister Yair Lapid.

      Citing the global effects of the war in Ukraine, Bennett stressed the importance of finding avenues for cooperation between the EU and Israel in fields such as energy and food security. "In recent years, Israel has moved from being a gas importing country to a gas exporting one. We are currently working to produce more natural gas from Israel's economic waters," he announced.

      Shortly before, Bennett held a meeting in Jerusalem with Italian Prime Minister Mario Draghi in which, according to the official statement, "they discussed ways of the consequences of the war in Ukraine and how to deal with the global food crisis and possible collaborations in the field of energy, especially in light of the potential to export natural gas to Europe through Egypt."

      On Wednesday, Bennett retweeted the announcement of the agreement made by Von der Leyen and praised the cooperation with Egypt and the EU which, he notes, "contributes to global energy security and a more sustainable future and significantly strengthens Israel's economy and its relations with countries around the world."

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