Israel believes that further amounts of gas in the East Med are yet to be found and launched the 2nd offshore bid round last November.
There is political will from Israel, Cyprus, Greece and Italy to proceed with the construction of the EastMed natural gas pipeline, Israel’s Orit Ganor, Director of the Natural Gas International Trade, Ministry of Energy, told New Europe.
“The four countries support the promotion of the EastMed pipeline project,” she said on the sidelines of the Athens Energy Forum on January 28. Ganor added that the intergovernmental agreement (IGA) would be signed in the coming months. “There’s no exact date. It’s EU bureaucracy, but I guess in the next two, three months, we’ll know,” she said.
Asked if there were enough gas volumes to make the EastMed pipeline feasible, Ganor said, “We believe that further amounts of gas in the area are yet to be found. That’s the reason why Israel has launched the 2nd offshore bid round last November. You know, there is a question in science: What came first the egg or the chicken? Infrastructure or discoveries? Naturally countries promote export options in order to facilitate exploration activities in the area, that in turn may increase the feasibility of the project”.
She said that at the end the project would depend on the commercial viability of the project. “It’s not up to us,” she said.
Regarding the main Israeli field that could supply the EastMed pipeline, Ganor said, “From Israel, the main field is Leviathan, of course, with 500 bcm (billion cubic metres), it’s a major capacity.” But she added that the commercial viability of the project would also depend on gas findings in Cyprus and Greece.
The European Union and the United States see the newly discovered hydrocarbon reserves in the East Mediterranean as a way to boost Europe’s energy security and reduce the EU’s reliance on Russian gas.
American Ambassador to Greece, Geoffrey Pyatt, told the Athens Energy Forum on January 28 that the US strongly supports the trilateral dialogue between Greece, Israel and Cyprus. “The United States believes that geopolitical competition has returned to the Eastern Med, and in that context, we are looking for friends and partners.
This trilateral is a very important manifestation of that, and we see the EastMed pipeline as a strategically significant project,” Pyatt said, adding that’s why his counterpart in Jerusalem, Ambassador David Friedman, participated in the last meeting of the Ministers in Israel, and expressed Washington’s strong support for the project. “Whether the EastMed pipeline is ever going to be constructed, that’s going to be a function of markets, it’s going to be determined by commercial demand,” Pyatt said.
He reiterated Greek Energy and Environment Minister George Stathakis’ earlier comments at the Athens Energy Forum that there are already multiple levels of conversation going on — some involving those three countries, but the Cairo energy forum was also significant and it shows how all of the players of the neighbourhood are thinking about how the energy picture of the future will look different from what it is today.
“I think importantly for me they are looking at Europe as the logical destination for that energy, and if you are trying to get energy from the East Med to Europe, whether you are doing it as LNG (liquefied natural gas) that is liquefied in Alexandria or you are doing it on a pipeline, Greece is the closest and most economical place to introduce that energy into European markets,” Pyatt explained.
Israel, Cyprus, Greece and Italy reached an agreement to build the EastMed pipeline in November. Last month, Eastern Mediterranean countries agreed to create a regional gas market in an effort to transform their part of the Mediterranean into a major energy hub. Egypt, Cyprus, Greece, Italy, Israel, Jordan, and the Palestinian Territories founded on January 14 a forum to ensure supply and demand, cut infrastructure costs and offer competitive prices.
The EastMed pipeline, however, still needs to secure buyers in Europe for its gas and companies prepared to invest in it.