Transporting natural gas to Turkey from Israel and Cyprus seems to be under current market conditions the most viable option, but not without geopolitical risks, experts said on Monday at a conference titled ‘The Future of Eastern Mediterranean Gas’.
The conference, the fourth in a series on energy in the eastern Mediterranean, was organised by the Prio Cyprus Centre, in collaboration with the Atlantic Council, the Friedrich-Ebert-Stiftung in Cyprus and Istituto Affari Internazionali and Strata Insight.
Charles Ellinas, non-resident senior fellow with the Atlantic Council, said that in the long term the transport of natural gas through a floating LNG (FLNG) plant is a serious option, since options such as exporting gas to Europe through Egypt, through the mooted East Med pipeline or through Turkey, seem not to be viable because of low prices internationally.
On Turkish-Israeli rapprochement, he said it paved the way for gas exports from Israel’s Leviathan gas field to Turkey and that talks are currently underway to that end.
According to Ellinas, this would place Cyprus in a strong position as a gas pipeline would have to pass through its Exclusive Economic Zone (EEZ). It could also affect development of the Aphrodite reservoir which could join the project, but that would require a solution of the Cyprus problem.
Ellinas pointed out that although any gas from Israel to Turkey has to pass through Cyprus’ EEZ, Cyprus may not be able to halt such a project even if it disagrees.
He said also that a deal could open the way for exports from Leviathan to Turkey and that could make Leviathan’s development commercially viable.
Energy companies Noble and Delek, he added, have been pursuing this project since 2014 and if it succeeds Turkey may become the key for exporting eastern Med gas.
But this is not without risks, given that Turkish-Israeli relations could again deteriorate in the event of another flare-up in the Gaza Strip.
As far as Cyprus is concerned, Ellinas noted that possible exports to Turkey require a solution to the Cyprus problem, noting however that exports from Cyprus to Europe via Turkey are commercially prohibitive.
On Egypt’s role, Sohbet Karbuz, of the Mediterranean Observatory for Energy, said that whereas the country is currently a net gas importer, by 2022 it is expected to become a net exporter, as newly discovered reservoirs come on tap.
Given these developments, he said, there is not much room for Egyptian imports of Israeli and perhaps Cypriot gas.