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East Mediterranean states look to accelerate regional gas cooperation

Energy ministers from across the East Mediterranean met this week to discuss how to accelerate the development of the region’s vast gas resources and to increase cooperation in a bid to pave the way for a “sustainable regional gas market.”

Ministers from Cyprus, Egypt, Greece, Israel, Italy, Jordan and the Palestinian National Authority met in Cairo as part of the East Mediterranean Gas Forum (EMGF), which they founded in January this year.

With tensions high in the politically sensitive region, the forum’s aim is to ensure gas resources in the East Mediterranean can be developed economically and countries can “foster regional energy cooperation.”

The EMGF ministerial meeting Thursday came at a critical time, with Israel set to begin gas exports to Egypt by year-end and Turkey drilling in waters internationally recognized as being part of Cyprus’ Exclusive Economic Zone (EEZ).

The meeting was also attended by US energy secretary Rick Perry and the EU’s director-general for energy, Dominique Ristori, underlining the international interest in having a stable gas market in the East Mediterranean.

According to a communique released following the meeting, ministers discussed ways of cooperation “to develop gas infrastructure to expedite monetization of existing gas reserves, utilize existing infrastructure and develop infrastructure to facilitate the exploitation of future discoveries.”

In a tweet late Thursday, Cypriot energy minister Georgios Lakkotrypis said the founding members of the EMGF had taken “solid steps toward their commitment to collaborate on energy matters in the East Mediterranean.”

According to the communique, ministers also agreed to allow the participation of the private sector in the forum by establishing a “gas industry advisory committee.”

Many of the energy world’s biggest players are active in the East Mediterranean, including international majors ExxonMobil, Shell, Italy’s Eni, France’s Total, the US’ Noble Energy and Qatar Petroleum.

The ministers agreed to convene the next ministerial meeting in Cairo during the second half of January 2020.

Cyprus, Egypt and Israel have made significant gas discoveries in the East Mediterranean in the past decade, but monetizing the reserves has proved problematic.

There has been progress in the past year, with Israel agreeing to begin pipeline exports to Egypt, and Cyprus reaching a provisional deal to pipe gas from its Aphrodite field to Egypt.

A key infrastructure project in the region also has the political backing of Cyprus, Greece, Israel and Italy — the planned 2,100 km EastMed pipeline designed to link the offshore gas resources of both Cyprus and Israel to Greece and Italy by 2025.

The 10 Bcm/year pipeline is being developed by IGI Poseidon, a joint venture between Italy’s Edison and Greece’s DEPA.

Exploration also continues in the region, with expectations of more discoveries offshore Cyprus, Israel and Egypt from new drilling campaigns.

Israel this month also closed its second bidding round as it looks to prove up more gas resources, while Jordan is also looking to kick-start exploration in its onshore blocks.

Lebanon has also moved to begin offshore exploration though it had no presence at Thursday’s meeting in Cairo.

Similarly, there was no representative from Turkey, which has two drillships operating in waters offshore Cyprus.

The US and the EU have warned Turkey to halt its drilling, with Brussels earlier this month moving to suspend all EU-Turkey high-level dialogue and asking the European Investment Bank to review its lending activities in Turkey, notably with regard to sovereign-backed lending.

Further measures against Ankara could follow.

The EU has repeatedly said it considers Turkey’s drilling offshore Cyprus as “illegal” though Turkey says it has the right to drill in the waters offshore Cyprus, describing the areas in question as part of the Turkish and Turkish Cypriot EEZs.

Turkey is not a signatory to the UN Conventional on the Law of the Sea (UNCLOS) and does not recognize the government of Cyprus, its EEZ, its maritime border agreements with Egypt, Israel or Lebanon, or the licenses that Cyprus has awarded to foreign energy companies.
Source: Platts

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