For decades, it seemed that most countries of the Levant, east of the Mediterranean Sea, had little or no share of the Middle East’s abundant energy resources. Israeli’s Prime Minister, Golda Meir popularized this joke,
“Let me tell you the one thing I have against Moses. He took us forty years into the desert in order to bring us to the one place in the Middle East that has no oil!”
Since its inception, Israel was an energy-starved country surrounded by hostile, oil-rich neighbours. This perception changed in 1999 with the discovery of the Noa gas field off the shores of Ashkelon. However, the discovery of more major natural gas fields in Israel since 2009, including Tamar and Leviathan, has transformed Israel from an energy-dependent country into an energy supplier, both domestically and abroad.
Encouraged by the Tamar and Leviathan discoveries, the Republic of Cyprus sped up its exploration efforts along the south-eastern boundaries of its Exclusive Economic Zone (EEZ), which runs close to the location of these Israeli fields. In 2007, Cyprus announced the first offshore licensing round in its EEZ. Four years later, Noble Energy announced the discovery of the Aphrodite gas field in Cyprus southern EEZ.
This gave Cypriot authorities the necessary confidence to grant licenses to other energy companies, which rushed into the region hoping to profit from the looming gas bonanza. The discovery of the Tamar and Leviathan fields in 2009 and 2010 respectively and the Aphrodite field of Cyprus in 2011 has opened an opportunity for Israel and Cyprus, as energy players. Both countries will export some of their gas.
In 2010, during the Cyprus-Israel Business Association in Nicosia, we have witnessed the first use of the term “Energy Triangle”. This concept marked the beginning of increased collaboration between these two states. Energy Ministers of Cyprus and Israel in 2011 announced that they would export some of their gas (as LNG).
This breakthrough agreement could redraw the geopolitical energy landscape in the area. On the one hand, the entrance of these players into the market could reduce traditional Russia’s gas hold on Europe. Currently, Moscow has been supplying almost 40-45% of the EU’s total energy demand. With these two new players, European countries’ dependence on Russian gas would decrease.
On the other hand, Turkey’s Blue Homeland (Mavi Vatan in Turkish) strategy envisages turning Ankara independent in the economic and energetic aspects. Turkey has indeed become the main energy corridor connecting East and West, but Ankara wants to become a major player in the energy field by delivering gas towards Europe.
In 2012, the East Med pipeline was first proposed, including 1,300km of offshore and 600km of onshore pipeline sections. It will transport natural gas from the Levantine Basin in Israel as well as from the gas fields in Cypriot waters to Greece and Italy.
This project would be beneficial for EU’s energy security by diversifying its natural routes and sources. The East Med project is expected to meet some 10-15% of the EU’s projected natural gas needs.
Therefore, in 2013, Regulation 347/2013 designated the construction of this pipeline as a Project of Common Interest for the EU. Furthermore, during the period from 2015 to 2018, the EU Commission spent almost 35€ million as part of a second Connecting Europe Facility grant, which will cover 50% of the engineering and design activities (FEED).
In 2015, the East Med pipeline project received approvals from the Cypriot, Greek, and Italian Governments in 2015, and, two years later, the Energy Ministers of Italy, Greece, Cyprus, and Israel signed a Joint Venture Declaration to confirm their support for the development of the project.
Further steps were taken on 20th March, when Greece, Cyprus, and Israel signed an intergovernmental agreement for the East Med gas pipeline in Tel Aviv. This arrangement was signed in presence of ex US Secretary of State Mike Pompeo, in a sign of support from Washington for the project.
Additionally, in April 2019, the European Commission contributed almost 35€ million to complete the technical studies for the project. Turkey responded this move with the signature of the Maritime Boundary between Ankara and the Government of National Accord of Libya (GNA) This deal re-draws the EEZ and continental shelf zone boundaries within the Eastern Mediterranean.
Nevertheless, in January 2020, Greece, Cyprus and Israel finally signed the accord to construct the East Med pipeline. Its original competition date was scheduled by 2015, but it was delayed to 2027. Furthermore, in January 2020, the Italian Minister of Economic Development reinstated the backing of Italy for the East Med pipeline project.
Additionally, in September 2020, Egypt, Israel, Greece, Cyprus, Italy, and Jordan established the East Mediterranean Gas Forum (EMGF) as an intergovernmental organisation. The Palestinian Authority is also part of the forum and France has applied to join, with the US and the European Union requesting observer status. This platform could fuel Cairo’s interest to become a regional hub and shift the regional energy scenario.
If this project is finally completed, it would support the economic development of Cyprus and Greece by providing a stable market for gas exports. It would also enable the development of gas trading hubs in Greece and Italy.
Israel, in January 2020, began exporting natural gas to Jordan and Egypt from its newly operational Leviathan offshore field, an important milestone for the Israelis. The East Med pipeline will ensure a long-term export channel for Israeli natural gas and would strengthen Israel’s economy and boost its regional standing.
Only time will tell who the winner from this is accrue competition within the East Mediterranean, as all players in the geographic arena play their cards to checkmate their opponents in this energy scramble.