East Med pipeline: Prospects and challenges

The advancement of the proposed East Med pipeline is a priority for the US. The 7 billion dollar bet.

In a highly strategic and symbolic move, the US sent the message that they are “back” in the Eastern Mediterranean and active in every way in the effort to reduce Europe’s energy dependence on Russia, since American foreign secretary, Mike Pompeo, participated in the trilateral summit of Greece, Israel and Cyprus in Jerusalem on March 20.

The topic of the second summit taking place within a three month period was “energy and marine security” and the American foreign secretary’s presence surely provided a certain gravitas to the meeting of Tsipras, Anastasiadis and Netaniahu, while it affirmed that the trilateral model creates a new strategic “canvas” for the region as it is not just about alternative energy sources for Europe, but also about maintaining stability and security in the region during this crucial time.

Mr. Pompeo’s participation in this trilateral summit, at a moment when friction in Turkish-American relations is increased because of the S400 issue, was perhaps the most concrete answer to Turkey, which apart from other threats, had illegally claimed space for military exercises south of Limassol.

American support

Pompeo’s presence obviously held importance. Apart from the traditionally warm relations of the US with Israel, there is also the more pro-Israel policy of the Trump administration, during a symbolic time with the decision to move the American embassy to Jerusalem.

Furthermore, there is the friendly relationship of Trump with Netaniahu and it is certain that the American president wanted to help the Israeli prime minister get reelected. In this sense, it is obvious that Pompeo’s presence was a part of an effort to promote Netaniahu’s image as a “global leader” before the elections.

Moreover, in this phase of US foreign policy, with the issue of withdrawal from Syria being open, with the new “cold war” with Russia and increased antagonizing, but also with difficulties in convincing the rest of their allies for an aggressive policy against Iran, it is obvious that Washington views positively any effort to create defensive alliances compatible to their own goals.

It is also obvious that the US support any effort to reduce European dependence on Russian natural gas, under the condition that American companies will gain ground to cover that gap.

The East Med project

The East Med pipeline, which is one of the most important export projects for Eastern Mediterranean gas, a region at the epicenter of energy developments because of recent years’ discoveries, is planned to cross the Israeli, Cypriot and Greek EEZ, reach Greece and from there connect to Otranto, Italy, through an underwater pipeline. From that point, supplies to Europe will be available. It is an important 7 billion dollar project, with a length of 2,200 km, which faces significant technical challenges because of the great depth and the difficult underwater terrain.

The US support East Med for geostrategic reasons, without excluding alternative ways for exporting natural gas, either through Egypt’s LNG plants or a new LNG plant in Cyprus.

For the US, the pipeline will give a permanent character to Israel’s connection with Europe and at the same time it will ensure a stable supply of the European market with “non Russian” gas. Its quantities, however, will only be enough to cover the needs of South and SE Europe, thus leaving a wide space for American LNG exports that have already commenced.

The strategic pylon of American foreign policy, as expressed by Mr. Pompeo during his speech in a top level energy conference in Houston with the participation of major oil companies and energy ministers from many countries (among them Greece, Israel, Cyprus), considers the use of energy as a means of promoting political goals set by American foreign policy.

Russia and Turkey

Russia is not happy with the project, since it stands against any alternative route that will reduce European energy dependence on the cheaper Russian gas. Russia is invested strategically in the expansion of Turkish Stream to Europe, but also in the nominal continuation of Nord Stream II’s construction, which connects Russia to Germany while bypassing Ukraine as a hub and it widens Europe’s dependence on Russia.

Turkey is also opposed to the pipeline, since it steadily supported the export of SE Mediterranean gas through a pipeline on its own soil. Turkey considers that East Med bypasses it, thus reducing its strategic role as an energy hub. Of course, Turkey’s relations with Cyprus, Israel and Egypt are such that they do not allow any space for cooperation when it comes to hydrocarbon management in the region, while the EU would neither wish to obtain another “energy dependence” through Turkey monopolizing the routes of natural gas from the Caspian region (TANAP), Russia (Turkish Stream), northern Iraq and now the Eastern Mediterranean.

Egypt has not publicly turned against the pipeline and it views this project as antagonistic according to its own ambitions to become an export hub in the Eastern Mediterranean using its existing LNG plants in Idku and Damietta. However, it faces the difficult political decision of Israel becoming dependent on an Arabic country, even a friendly one.

European and Greek interest

The EU has provided 100 million Euros for the project’s viability study and has included it in its strategic projects, while the study is expected to be completed in Autumn, in order to subsequently begin the process of finding investors.

For Greece, the strategic importance of the project is evident, since it offers for the first time the role of a real energy hub that connects Greece with other countries such as Israel, Egypt and Cyprus in an energy, economic and security network in the Eastern Mediterranean.

For Israel, the pipeline is mostly of political significance, as it will connect the country to Europe and despite its great cost, it is an “independent” choice for exporting Israeli gas. For Cyprus, it is also politically important because of Turkey, while Nicosia will be mostly benefited by an LNG plant on its own soil, if new discoveries in its EEZ turn this into a viable project.

Experts claim, of course, that according to steps being taken so far, the chances are that there is enough gas to cover local demand and exports through Egypt’s LNG and probably an LNG plant in Cyprus and East Med.

In any case, Mr. Pompeo’s participation in the trilateral summit of March 20 constitutes a pivotal point for the new, upgraded presence and participation of Greece, Cyprus, Israel and Egypt in the new security architecture formed in the Eastern Mediterranean.

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