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Scramble For Gas In Eastern Med Begins To Overheat

Richard Wachman, Arab News

LONDON: Tensions are building in the eastern Mediterranean as the dash for gas is fraying tempers in a region of significant geopolitical tension already.

Gas exploration and development in the energy-rich Levant Basin and adjacent areas has raised fresh issues as countries scramble to make discoveries, sometimes in disputed waters.

In recent days, Egypt has delivered strong words to Turkey and warned Istanbul to step back from explorations near Cyprus where it negotiated concessions wth the Greek Cypriots in 2013.

Last month, Israel described as “very provocative” a Lebanese offshore oil and gas exploration tender in disputed territory on the countries’ maritime border, and said it was a mistake for international firms to participate, according to Reuters.

Elsewhere, a US-backed initiative to build an undersea natural gas pipeline between Israel and Turkey has run into the sand as Turkish President Tayyip Erdogan escalates his public denunciations of the Jewish state. The pipeline in question would have conveyed gas from Israel’s

Leviathan gas field — still under development — to Turkey for export to Europe.

Leviathan is no small find, but it is worthless unless Israel can get the gas to export markets. Its own energy needs are largely taken care of by its Tamar field 80 kilometers from Haifa.

Egypt’s massive Zohr gas field faces no such problem as it can depend on sales to its huge domestic market. Israel is too small. It must export the gas overseas to justify a commercial outlay on Leviathan running into billions.

Greek Cyprus has a similar problem. It has discovered the Aphrodite field off its south coast, but its home market is tiny and so it, too would be reliant on exports.

Pipeline construction is expensive and both Israel and Cyprus lack any meaningful infrastructure. So, the big question is how to get gas to consumers in Europe where governments fret about being over-reliant on Russian gas.

Only Egypt looks to have a clear run. For a start, it has substantive liquified natural gas (LNG) terminals, a captive consumer market and — crucially — Zohr is already delivering, following a development push spearheaded by ENI of Italy that has also involved infrastructure investment.

Zohr mean Egypt no longer needs to buy in expensive foreign gas, and could make the country a net exporterone day — making it one of the biggest energy success stories in the Middle East for years.

Challenges faced by Israel and Cyprus also turn on geopolitics and longstanding animosity with neighboring states.

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