Eastern Mediterranean Natural Gas Culminations

From World Press

By Ioannis Michaletos

The nascent natural gas sector in the Eastern Mediterranean has been making local headlines for quite some time, with great expectations for countries such as Cyprus and Israel to become important players in world energy markets. In the midst of intense geopolitical antagonism in one of the most volatile and important areas in the world, various initiatives are taking place, with ramifications that expand beyond the locale.

The governments of Greece, Cyprus and Israel recently signed an energy accord that further strengthens their ties in respect to joint plans to exploit the natural gas resources of the region, while Turkey strives to become the ultimate destination for the onshore transfer of the commodity. Greek Energy Minister Yannis Maniatis, his Cypriot counterpart Giorgos Lakkotrypis and Israeli Silvan Shalom signed a memorandum that stipulates the three states’ joint cooperation in energy infrastructure and transportation, with a special focus on offshore gas projects, such as the Aphrodite in Cyprus and the Leviathan and Tamar in Israel.

In the meantime, negotiations are underway to resolve the frozen Cyprus issue between the Greek and Turkish sides, and reports suggest that all interested sides have put natural gas on the table. Ankara has proposed a resolution to the problem and withdrawal of its military under the condition that gas be exported to its territory before it is transferred to international markets. The Cypriots and the Israelis have agreed in principle but have not definitely decided on establishing a liquefied natural gas (LNG) terminal in the designated region of Vasiliko in Cyprus. A debate is already underway in Tel Aviv to create its own LNG terminal either in Haifa or in Eilat, for reasons of security and autonomy. In such case, a project in Vasiliko, which would cost up to $6 billion, according to estimates from the local energy ministry, is not possible since the Cypriot reserves, as presently accounted for, are not sufficient to cover the profitability of such a project alone.

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