Page 7 - DMEA Week 02 2020

DMEA COMMENTARY DMEA
 New sources of European energy supply will undermine that influence.
Europe’s dependence on Russia for energy has already been curbed slightly in recent years by rapidly growing exports of natural gas from the US. But that still leaves Europe, which lacks significant gas resources of its own, heavily dependent on imports from Russia and other countries, including Norway and Qatar. The EU considers EastMed vital to energy security and has fast-tracked its permitting process.
The project also seems to be fuelling further energy diplomacy in the region: last weekend, foreign ministers from Egypt, Greece and Cyprus discussed other new projects in Cairo, and on January 7, US Secretary of State Mike Pompeo travelled to Cyprus.
It is clear that all those involved are seeking to send the message that things are on the move in the Eastern Mediterranean — but the question is what exactly?
The Greek state television channel ERT con- sistently refers to the EastMed project as a “pro- tective shield against Turkish provocations.”
Such statements make clear that, from Ath- ens’ point of view, the pipeline is a response to recent rapprochements between Turkey and the internationally recognised government in Libya.
Greece, Cyprus and Turkey have been argu- ing over gas reserves in the eastern Mediterra- nean for years. In late 2019, Turkey and Libya signed a treaty defining a shared economic zone tailored to their own needs – simply dividing up most of the eastern Aegean Sea between them.
That put waters east of the Greek island of Crete under Turkish control, and that is pre- cisely where the EastMed pipeline is set to run.
The Italian position
That Italian representatives did not attend the EastMed contract signing in Athens is seen by many as a setback, too. According to Greek media, Rome’s absence is directly related to differences of opinion within the Italian
government.
Though Italy has assured Greece it will con-
tinue to support the project, Italian Minister of Economic Development Stefano Patuanelli said Rome would also have to build a second under- water pipeline on its own in order to draw gas from the Greek port of Igoumenitsa.
Doubts about profitability
The EastMed pipeline will be the longest under- water pipeline in the world, one Athens-based paper wrote. Meanwhile, the business-friendly paper Phileleftheros called the agreement “historic.”
Although Greece, Cyprus and Israel have the political will to sign a deal on a gas pipeline in the eastern Mediterranean, the question has to be asked whether the project is worth the money. The EastMed pipeline is primarily important for geopolitical reasons, but at a cost of €6bn its likely profitability has been questioned.
Although Greece, Cyprus and Israel are all politically on board, that does not mean they have the funds to finance the pipeline’s construc- tion, and EU funds for the project are unlikely, as the bloc has moved away from investment in fossil fuel projects in favour of green alternatives.
Private investors will be looked to as poten- tial sources of finance. An eastern Mediterra- nean pipeline is also unlikely to attract investors owing to a glut of gas on the international mar- ket, and the attraction of turning to imports of liquid natural gas (LNG), which is a more flexi- ble alternative.
However, there seems to be no shortage of new pipeline projects. On January 8, Rus- sian President Vladimir Putin and his Turkish counterpart, Recep Tayyip Erdogan, opened the TurkStream pipeline that runs through the Black Sea.
The project is designed to deliver Russian gas to Europe. It remains to be seen whether EastMed and TurkStream will complement each other or compete. ™
“ insistence that
the deal contains legal loopholes has mobilised activists
Armouti’s
Proposed route of EastMed (Image: DEPA)
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