In April of 2017, the Energy Minsters of Israel, Cyprus, Italy, Greece and the European Commissioner unveiled plans for a natural gas pipeline that will travel from the Eastern Mediterranean to Europe. This project, known as the EastMed Gas Pipeline, is logistically and financially ambitious, and not without a complex background rooted in regional politics.
Europe has long been hopeful of creating alternative energy options, as it currently imports more than half of all its consumer energy. Nearly 35 percent of the EU’s gas imports come from Russia (it’s oil imports are closer to 90 percent), A reliance which has long influenced political relations between the two. This heavy import dependence is exacerbated by the region’s 20 percent increase in energy demand over the last twenty years, while regional production has fallen nearly 6 percent in the last ten years.
Initially, a series of large-scale gas deposit discoveries off the coast of Israel and Cyprus in 2009 and 2011, offered potential for new energy security options and improved regional cooperation. But political and logistical roadblocks stopped these projects from taking off. While Cyprus found enough gas reserves to satisfy its domestic market for more than a century, it lacks an export outlet to sell the remainder. Israel, which found enough gas reserves to make it energy independent for 40 years, must also find a way to pursue credible export routes and a critical mass of buyers in order to begin full-scale production, lest its resources go to waste.
This is where Greece and Italy have entered, to transform a rough idea of change into a clear shift towards regional energy independence. The EU is providing limited support of the EastMed pipeline project, as the endeavor has been categorized a project of common interest (PCI). Linking the reserves from Israel and Cyprus to Greece and Italy will drive competition within the EU market, increase energy integration, diversify resources, and help Europe meet its renewable goals, all of which are requirements of a PCI.
Although it will be co-financed by the European Union, it will not foot the entire bill. So far, private companies like Greek gas company IGI-Poseidon are involved, but no concrete action will take place until suitable profits margins can be secured. This is a difficult task in the gas market, which has constantly fluctuating prices. Price estimates for the project have been high, and some call them optomistic. To reach Greece, the EastMed Pipeline is expected to cost $5.4 billion, and $6.4 billion to reach Italy. Although it has been classified as technically viable, the project will be challenging, especially as pipelines pass from Cyprus to Crete and go through uneven terrain and extreme water-depths. These obstacles present future challenges should repairs be necessary.
Of course, a pipeline from Israel and Cyrus directly into Europe is not the only project on the books. In fact, while Israel pursues an additional gas pipeline with Turkey, Egypt’s large-scale discovery of gas deposits in 2015 has attracted the attention of both Cyprus and Israel. Egypt is currently the only country in the region that could export gas independently to Europe, thanks to its already existing export infrastructure. Cyprus, Israel and Egypt hosted their fifth trilateral Summit in Cyprus in November 2017, to discuss a range of issues, including their potential energy collaborations.
The addition of Egypt into this energy interconnection could offer a funneling of resources from Cyprus and Israel into Egypt, where gas could be liquefied and exported directly to Europe. However, regional politics will continue to play a large role in the feasibility of these collaborations. Regardless, in order for Europe to move towards true energy independence from Russia, the region will need to bolster its energy diplomacy, and support more common interest projects that bind the region together through positive methods, like energy resource investment and distribution.