Francis PerrinSenior Fellow at the OCP Policy Center in Rabat, Morocco, and Senior Research Fellow at the French Institute for International and Strategic Affairs
"The discovery of natural gas deposits has made the Eastern Mediterranean a new energy-producing region at the gates of Europe."
The Eastern Mediterranean, a New Natural Gas Region
Lying at the crossroads of three continents, the Mediterranean Basin is both environmentally fragile and rich in energy resources, be they renewables, such as the wind and the sun, or fossil fuels buried underground. In this article, Francis Perrin, a geopolitical expert, provides his analysis of the impact of current and planned natural gas production projects in the Eastern Mediterranean.
The discovery of natural gas deposits has made the Eastern Mediterranean a new energy-producing region at the gates of Europe, Africa and the Middle East, after thousands of years of history and political turmoil among civilizations.
Natural gas production began off the coast of Egypt, and then more recently spread to Israel. Two deposits have been discovered off the coast of Cyprus and yet another offshoreRefers to sea-based oil exploration and production operations, as in "offshore license" or "offshore drilling". from Gaza. Exploration will soon begin in two blocks in Lebanese waters, where the outlook appears promising. As a result, the Levant is emerging as a new natural gas region, that is, a zone containing significant proven reserves and destined to supply international markets. Will this be the source of new troubles or, on the contrary, a step toward cooperation and peace? It seems likely that the answer is both...
The pessimistic perspective cannot be ignored: war in Syria, the conflict between Israel and Palestine, the “apple of discord” (Cyprus) between Turkey and Greece, and tensions between Israel and Lebanon already foul the air, which could become even worse with the smell of gas. Nevertheless, so far the obvious political risks have not hindered the new economic developments, because the countries have a mutual interest in developing the natural gas fields. If they do not, they will all lose.
Egypt, which at the beginning of the decade was still a net exporter of natural gas, needs the resources from its enormous Zohr natural gas field to meet domestic demand. Israel is seeking to improve its energy independenceThe ability of a country or region to meet all its energy needs without having to import primary or final energy. with help from its Leviathan and Tamar gas fields. Lebanon has to finance its reconstruction. And, with its promising Aphrodite gas field, Cyprus, a member of the European Union (E.U.), can play a role in the “Energy Union” policy pursued by the European Commission to reduce the bloc’s dependence on Russia.
These aspirations are all converging in an era of budding cooperation. This is perceptible in the gas pipelinePipeline used to transport gas over a long distance, either on land or on the seabed. project between Israel, Cyprus, Greece and Italy under negotiation and to which the E.U. could contribute financing. As another example, Egypt has signed two contracts with Israel to import natural gas and is currently in negotiations with Cyprus, while waiting for Zohr and other projects to gather steam.
Russia and Turkey
Along with the E.U. and the unavoidable United States, two other major powers are following the events closely.
Russia, the main supplier of Europe, could be worried about new competition. But the strategy of Gazprom, its big public energy utility, is to try to ensure a degree of control over the projects in the area by acquiring equity interests. In the case of Zohr, the Egyptian gas field which went into production in December 2017, the Russian petroleum company Rosneft bought a 30% stake in a consortiumA consortium is an association of individuals, companies, organizations, governments ... with the Italian group ENI, which holds a 60% interest, and BP, which owns the remaining 10%.
Turkey is well aware of its key geographical position. Its offshore natural gas potential may be more limited, but the country is at the center of a vast network of gas pipelines, some already in operation and some in the planning stage. There is Turkish Stream (or Turkstream), which Russia wishes to substitute for the direct gas pipeline originally planned for southern Europe. Another pipeline, bringing natural gas to Europe from the Caspian Sea via Azerbaijan and Georgia, will also cross Turkey. There are pipeline projects as well in Iran and Iraq, for when the two countries have gained a better footing in the international markets. Besides the pipelines, there is another means to transport natural gas: by liquefying it. Liquefied natural gas (LNG)LNG is composed almost entirely of methane. Liquefying the gas reduces its initial volume by a factor of around 600... can be shipped in tankersVessel used to transport bulk liquids in huge tanks. The best-known tankers are oil tankers, which carry crude oil. ; this is a more flexible means of transportation, without the restrictions of a fixed route.
Lastly, let us not forget two other big Mediterranean oil and gas producers: Algeria and Libya. Libya, which produces more oil than gas, has an immediate priority to increase its oil production and exports, in a highly unstable political and security situation. Algeria must take care – rather like Egypt – that its rapidly growing domestic energy consumption, particularly of electricityForm of energy resulting from the movement of charged particles (electrons) through a conductor... , does not gradually weaken its ability to export natural gas. To this end, the country has committed to a large-scale renewable energyEnergy sources that are naturally replenished so quickly that they can be considered inexhaustible on a human time scale... development program and has not ruled out tapping shale gasShale gas is found in deeply buried clayey sedimentary rock that is both the source rock and the reservoir for the gas... resources in the Sahara.
Francis Perrin, a graduate of the Institut des Sciences Politiques and the Faculté de Sciences Economiques in Grenoble, is a specialist in energy geopolitics and has directed and collaborated with many specialized journals in the oil and gas sector. He is a Senior Fellow at the OCP Policy Center in Rabat, Morocco, and Senior Research Fellow at the French Institute for International and Strategic Affairs (IRIS).