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    In the eastern Mediterranean there is gas for Europe, but "it is complicated".

    June 20, 2022 - CE Noticias Financieras


      Since 2010, the Eastern Mediterranean has become a focus of interest for the energy market after significant reserves of natural gas (some three trillion cubic meters of gas) and oil (some 1.7 billion barrels) were discovered in the waters around Egypt, Gaza, Israel, Lebanon and Cyprus.

      These discoveries have had important geopolitical repercussions, which now, with the Ukrainian crisis and the European need to seek suppliers outside Russia, are becoming more relevant.

      On the one hand, it is a volume of gas that makes it possible to cover the energy needs of the countries that produce it and to export a large surplus. It is very close to Europe, a voracious consumer of natural gas, and relations between producers and end consumers are relatively good.

      But on the other hand, its exploitation requires the coordination of territories and countries at odds with each other, while the investments needed to bring the gas to Europe may not compensate given the large but limited nature of the fields.

      In 2020, the Eastern Mediterranean Gas Forum was created, bringing together Egypt, Palestine, Israel (one of the few bodies where both are represented), Lebanon, Cyprus, Jordan, Italy, Greece and France.

      The European countries are present because it is companies from those countries (mainly ENI and Total) that explore or operate a large part of the fields.

      At the time, the discovery led to an escalation of tensions between Greece and Turkey over Ankara's studies and drilling in the disputed Cypriot waters, where the most important deposits of this gas are located.

      Part of this volume, which has yet to be exploited, would correspond to the waters of the Turkish Republic of Northern Cyprus, the Cypriot territory recognized as independent by Turkey but not by the international community or the United Nations.

      Plans for a gas pipeline linking the gas fields of Israel and Cyprus with Greece, where it would enter the EU energy flow, are underway, although there are doubts about the project due to the political tensions it generates with Turkey and its economic viability in the medium and long term.

      The plan announced in 2020 is to build an underwater gas pipeline, at great depth, to terminals in Greece, from where it would be distributed to the rest of the EU. But the cost could be very high for a resource that only has reserves equivalent to four years of EU consumption.

      For its part, Egypt already had a significant gas reserve in the Western Desert and the Nile Delta and sufficient infrastructure for its exploitation and export, such as liquefaction plants and gas pipelines.

      With the discovery of gas in the Mediterranean, its production, by global companies such as Italy's ENI, has been boosted.

      Israel, whose gas volume does not seem to merit the construction of its own plants to be able to export it, has also sought cooperation with Egypt to transfer its gas surplus there and be able to take it to world markets.

      Gas pipeline installations between the two countries were already active and energy exchanges have been constant, while political relations are close, which facilitates linkage.

      Lebanon, for its part, has a large part of its territorial waters within the area where these deposits have been found, although it has not yet had any luck in finding resources that can be exploited.

      A call for licenses opened last November for oil and gas exploration in eight offshore blocks, the first round of which had awarded another two plots to France's TotalEnergies, ends today.

      However, the French company and its partners only found "traces of gas confirming the presence of a hydrocarbon system" in one of the blocks, but could not find any "reserves".

      Experts doubt that, even if there were gas resources off the Lebanese coast, they will be found in the near future because of the difficulties to explore in the midst of the severe economic crisis in the country, which severely limits economic transactions and the use of services such as electricity.

      Israel sent a floating gas platform ten days ago to an area disputed by Lebanon, which as a result has decided to accelerate negotiations that began in 2020 to delimit its maritime border with its southern neighbor in the hope of being able to explore in its southern waters.

      In fact, just yesterday Lebanese President Michel Aoun conveyed to the U.S. mediator who is assisting in the maritime delimitation between the two countries, which do not maintain diplomatic relations, the plan proposed by Washington to settle the dispute.


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