Jun 16, 2022
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The European Union is trying to “escape” from “Gazprom” in Israel

Pictured: drilling rigs at the Tamar natural gas field in the Mediterranean off the coast of Israel

Pictured: drilling rigs at the Tamar natural gas field in the Mediterranean off the coast of Israel (Photo: AP Photo/Marc Israel Sellem/TASS)

The European Union plans to partially replace Russian gas with supplies from Israel through Egypt and has already launched active activities in this direction.

14 June Prime Minister of Italy Mario Draghi at a joint press conference with an Israeli colleague Oil Bennett said that natural gas supplies from the Eastern Mediterranean could reduce Europe’s dependence on Russia in the energy sector. In turn, Bennett promised that Israel is working to “make its natural gas available to Europe.”

“On the energy front, we will work together to harness the natural gas resources of the Eastern Mediterranean and develop renewable energy sources,” Draghi said.

President of the European Commission Ursula von der Leyenwhich on the same day met with Bennett, announced that in order to increase the supply of natural gas to Europe, “a tripartite energy agreement will be signed between the EU, Israel and Egypt.” She even explained how the Eastern Mediterranean gas supply scheme will work: a gas pipeline will be laid from Israel to Egypt, then this gas will be liquefied in Egypt at existing facilities and transported to Europe by sea.

The very next day after the meeting, the Al Jazeera TV channel reported that the European Union, Israel and Egypt really promptly signed a memorandum of understanding in the field of gas exports from the Jewish state through the Arab Republic to Europe. The agreement is for three years with an automatic extension for another two years.

As for the volumes in question, they have not yet been specified, but according to Israeli media, the country is preparing to double its natural gas production capacity in the coming years due to new production and processing fields, to about 40 billion cubic meters per year.

But that’s not all – now Turkey has decided to join the process. In any case, the head of the Ministry of Energy of the country Fatih Donmez said on June 14 that Ankara would resume exploration of natural gas fields in the Eastern Mediterranean, although its current priority is gas production in the Black Sea.

According to the Turkish minister, gas can be produced in Turkey’s exclusive economic zone in the Mediterranean Sea, and it can be delivered jointly with other countries to Europe.

“It could be Israel and Egypt. If it is economically viable, why not supply gas through Turkey?” Donmez added. Turkish authorities have previously announced plans to negotiate with Israel on the delivery of gas from the Eastern Mediterranean to Europe.

Leading expert of the National Energy Security Fund, lecturer at the Financial University under the Government of the Russian Federation Stanislav Mitrakhovich believes that all these projects of gas supplies from Israel, both through Egypt and through Turkey, may well be implemented. As for whether this will become a replacement for Russia, it is completely impossible, but some of the volumes can really be replaced in this way.

So far, the parties have only signed a memorandum of understanding. In fact, this is only a declaration of intent, which may not be realized. Specific figures were not named, because they understand that these figures will be difficult to confirm in reality.

Gas in the Eastern Mediterranean was discovered ten years ago. There is the Zohr field in Egypt, one of the shareholders of which is Rosneft. There are open deposits on the shelf of Greek Cyprus and Israel. Production volumes there, of course, cannot compete with Russian ones, but if we act on the principle of “chicken by grain”, part of the supplies can be replaced.

It is possible to supply several billion cubic meters of gas from Israel to Egypt, and increase the liquefaction capacity in Egypt itself. Last year, the Egyptians exported about 10 billion cubic meters. gas, mainly to Turkey and China, but some could be diverted to Europe.

I do not rule out that in the future gas from Cyprus can also be brought to Egypt, and then delivered to the EU. The project of deliveries from Cyprus to Europe was called EastMed, but it failed because Turkey was against it. They do not like that Greek Cyprus is showing too much independence. Through Egypt and liquefaction, all this will be easier to organize.

I think if all this is combined, it will be no more than 10 billion cubic meters of gas per year. Russia supplies Europe with about 150 billion cubic meters. That is, it is no match for Russian volumes, but this is how you can slowly bite off pieces from them from different sides.

True, this entire project could become a hostage to instability in the Middle East. Israel is in a state of constant confrontation with its neighbors. In Egypt, not so long ago there were revolutions. But purely technically, the base and resources for liquefaction are there.

If European politicians announce this project as a “salvation” from Russia, it certainly won’t work. But if as a partial replacement for several billion cubic meters, this is quite possible.

“SP”: – And if Turkey also joins this project?

– Turkey is now planning to develop its production in the Black Sea more, although the scale there is debatable. A lot has been announced, Turkey has big ambitions, but in reality, the volumes that were promised may not turn out. However, the Italian company Saipem is already building an underwater gas pipeline at a depth of 2 kilometers from the new field to the Turkish coast. The volume of production is still planned at the level of 3-4 billion cubic meters per year, although some Turkish politicians promise to bring it up to 15-20 km. But this is still doubtful.

As for the Eastern Mediterranean history, Turkey can also be a transport hub. The gas pipeline from Cyprus to Europe can be built through Turkey if the parties agree politically. Although this just looks rather problematic, given the Northern Cyprus and other disagreements. But purely theoretically, instead of sending Israeli or Cypriot gas to Egypt and liquefying it there, it is possible to build a pipeline to Turkey, and from there to Europe.

Turkey already has the TAP-TANAP pipeline system, which goes to Europe, of course, Turkey would like to expand it and become a hub through which the gas of all neighbors flows. Although just for the neighbors, for the same Cyprus, the liquefaction option in Egypt is more interesting, so as not to depend on Ankara. That is, economically it would be easier to develop this project with Turkey, but politically – with Egypt.

In terms of exports, over the past ten years, Egypt and Israel have indeed developed their own production, which is still using it for their own purposes, and LNG capacities in Egypt, which are used for export. How this story will develop further, time will tell.

“SP”: – And how long will it take to start supplying gas from the Eastern Mediterranean to Europe?

– If we talk about pipeline supplies from Turkey, there is no agreement yet. But it usually takes a couple of years to build a gas pipeline, and you need to be guided by this. As for deliveries from Israel to Egypt, everything is simpler there. There is already a gas pipeline there, since at one time Egypt supplied gas to Israel, and not vice versa. I think all this can be launched within one year.

So all this can be done quite quickly, another thing is that we will talk about small volumes.

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