Page 7 - MEOG Week 36 2022

MEOG COMMENTARY MEOG

3,000-metre-deep water; seismic activity in the did not escape notice in Brussels. Israel, Egypt
region; and competing territorial claims over and the EU signed a memorandum of under-
multiple portions of the proposed route. standing (MoU) on co-operation in gas supplies
Under such circumstances, it is hardly sur- in June of this year.
prising that Israel has been willing to explore
another alternative for moving its gas to the Egyptian option for Cyprus?
European market. That alternative is Egypt, Could Cyprus try to follow a similar strategy?
which has shown itself eager to work with neigh- Perhaps. It could not do exactly the same as Israel
bouring states on this front – and which is spe- has done because it has no overland pipeline
cifically pursuing co-operation with Israel in the connections to the North African country, but it
gas sector. The two countries have stepped up could pursue underwater connections via local
trade on this front over the last couple of years, pipelines or even tie-backs.
and as a result Israel has been able to increase After all, the distances involved would not be
the volume of gas it delivers to Egypt. It has also large. Two of the fields discovered thus far off-
gained access to Idku and Damietta LNG plants shore Cyprus, Glaucus and Aphrodite, are less
– a boon for Egypt, which is hopeful of becoming than 100 km away from Zohr, Egypt’s largest gas
a regional gas liquefaction hub of sorts. deposit, with reserves of 30 trillion cubic feet
(850 bcm). In turn, Zohr is connected to Egypt’s
Israel’s Egyptian strategy domestic gas networks and to the gas liquefac-
This has been a sensible strategy for Israel vis-à- tion plants, meaning that a link to Zohr would
vis the European market because it has created allow Cyprus to send gas to Europe as LNG.
synergies with existing infrastructure that was Even better, this kind of link could be estab-
already capable of exporting gas to Europe. lished far more quickly and cheaply than a large-
In other words, Israel benefited from work- scale system such as EastMed. It would have a
ing with Egypt because it did not need to build lower capacity, but it might be able to make up
its own export facilities from scratch or build for that with speed – and speed may be a more
its own relationships with European custom- important consideration to the EU at a time
ers from the ground up; instead, it could bene- when Russian gas supplies are drying up and
fit from the LNG plants and customer ties that prices are climbing.
Egypt already had in place. At the same time, Some questions would remain, such as how
Egypt also benefited from working with Israel rapidly Cyprus might actually be able to launch
because it gained a new source of feedstock for gas production. Even so, these questions might
its LNG plants, which had been sitting idle for seem easier to answer if the parties involved
some time, and the opportunity to portray itself knew that they had a fast, easy and cheap way to
as a reliable supplier. move Cypriot gas to market in Europe – through
Meanwhile, the benefits of this arrangement Egypt.™

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