Page 5 - DMEA Week 43 2022

DMEA COMMENTARY DMEA

The MoU laid the groundwork for EGAS to Gaza Marine has certain advantages now that
begin talks with PIF and CCC, and those talks it did not have when it was first discovered. It
appear to have borne some fruit. El-Molla cer- has the advantage of proximity to existing infra-
tainly seem to be optimistic. Earlier this week, structure – namely, to the Ashkelon-Arish pipe-
he was reported to be in talks with PA Prime line and to LNG plants in Egypt. The former was
Minister Muhammad Shtayyeh and the Israeli originally built to carry Egyptian gas to Israel,
government with the goal of striking a deal on but it only carried out this function from 2008
Gaza Marine – presumably with EGAS taking to 2012. In 2020, the pipeline began operating in
the lead on the project. the reverse direction, carrying gas from Israel’s
As of press time, the parties had not yet Tamar field to Egypt.
announced any agreement or said publicly when Meanwhile, some of the gas flowing through Will Europe’s
they might come to a conclusion. Egyptian offi- the Ashkelon-Arish link has been delivered to
cials appear to remain optimistic, though, that Egypt’s Idku and Damietta LNG plants. Those increased
the chances for pushing the project forward are plants have spare production capacity and have need and new
better than ever because European gas markets processed Israeli gas into LNG for export to
are in turmoil. Europe. Presumably they could do the same for infrastructure
Their position is based on the fact that Euro- gas from Gaza Marine – and with relative ease,
pean energy security has deteriorated signif- since the Ashkelon-Arish pipe actually passes help tip the
icantly since the beginning of 2022 due to the through the Gaza offshore zone.
Russia-Ukraine war and the subsequent dis- balance in favour
ruption to Russian oil and gas deliveries. That Have enough things changed? of development
disruption has left many – perhaps even most But will Europe’s increased need, changing geo-
– European countries scrambling to ensure political conditions and new infrastructure be this time?
their fuel and energy supplies and lock down enough to tip the balance in favour of develop-
new sources of production. Under these condi- ment this time?
tions, Gaza’s relatively close proximity to Europe It is not clear yet. To a significant extent, the
makes it an attractive candidate. answer to the question is likely to depend heavily
In other words, Egypt’s optimism about Gaza on Hamas. After all, Egypt and Israel are nego-
is based on the contention that conditions are tiating with the PA, but in practice officials in
different this time. It is premised on the fact Ramallah have had little sway over matters in
that Europe’s need for alternative gas supplies is Gaza since 2007. And while Hamas did sign a
strong enough to overcome the political obsta- reconciliation deal with Fatah, the main faction
cles that has helped keep the Gaza Marine pro- within the PA, in mid-October, it remains to be
ject in limbo for more than 20 years. It presumes seen whether the document has any concrete
that the EU wants gas more than the Israelis, the impact. (Previous reconciliation pledges have
PA and Hamas want to remain at odds. had little effect.)
So for now, even though El-Molla remains
Egyptian infrastructure optimistic about the possibility of opening up
In a way, it is true that conditions are different an Egyptian corridor for gas from Gaza, he will
this time. have to continue waiting for a while longer. ™

The Gaza Marine field contains about 28 bcm of gas (Image: CCC)

Week 43 27•October•2022 www. NEWSBASE .com P5