Wednesday, February 21, 2024
 
 

Turkey lurking, Greece-Cyprus-Israel EastMed political deal coming

Erdogan clogs gas pipeline, investors still sought

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ATHENS – Greece, Cyprus and Israel plan to sign an intergovernmental agreement for the construction of the EastMed natural gas pipeline in Athens on 2 January.

Greek Prime Minister Kyriakos Mitsotakis, Israeli Prime Minister Benjamin Netanyahu and Cyprus President Nikos Anastasiades will sign the agreement for the pipeline that will transport gas from the southeast Mediterranean to Italy and the rest of Europe. Italy is also expected to sign the agreement at a later stage.

Cyprus Natural Hydrocarbons Company CEO Charles Ellinas told New Europe on 24 December that the agreement to be signed on 2 January is an intergovernmental agreement, mainly of a political nature, that will provide the legal framework facilitating eventual construction and operation of the EastMed gas pipeline. However, Ellinas said, implementation of the project requires investors prepared to invest in the project and buyers of the gas in Europe. “Neither of these is in place. This is an expensive project estimated to cost about $7 billion, but most experts consider this to be optimistic, expecting it to be closer to $8-10 billion. With the cost of gas in Israel, before it enters the pipeline, greater than $4.50 per million btu (British Thermal Unit), the price of gas in Europe needs to exceed $8 per million btu before this pipeline becomes commercially viable,” he said.

According to Ellinas, Europe has plentiful supplies of cheap natural gas at prices this pipeline would not be able to compete with. In addition, the European Union will publish by March the European Green Deal pushing towards cleaner energy, away from fossil fuels and with more ambitious climate goals by 2030 which, according to Ellinas, will make new gas projects more challenging.

Turkey-Libya deal heightens East Med tensions

Meanwhile, Turkish President Recep Tayyip Erdogan paid a surprise visit to Tunisia on 25 December to discuss cooperation for a possible ceasefire in neighbouring Libya, Reuters reported. The visit comes after Turkey signed an accord with Libya’s internationally recognised government in November that seeks to create an Exclusive Economic Zone (EEZ) from Turkey’s southern Mediterranean shore to Libya’s northeast coast, casting a shadow over East Med gas. Greece, Cyprus, Israel and Egypt are alarmed by the Turkey-Libya move, calling it illegal and destabilising.

Erdogan said he would go ahead to have energy ships start drilling for oil and gas off Crete with Mitsotakis warning the Turkish leader provocations in the Aegean and East Mediterranean won’t go unanswered.

Asked in the signing of the intergovernmental agreement between Greece, Israel and Cyprus to construct the EastMed pipeline is prompted by the Turkey-Libya deal, Ellinas said, “To a large extent it is. However, the plan to sign such an agreement has been in place since last year.”

He noted, however, Italy, where the pipeline will land if constructed, has been unable to participate because of resistance within the country by communities near to potential landing sites. According to Ellinas, this problem has not yet been overcome, and it is the reason that Italy has not committed to participate at the 2 January meeting.

Erdogan may react in terms of dismissing the agreement, Ellinas said. “But the fact that this is merely an inter-governmental agreement it would not elicit any stronger reactions. With Cyprus, Greece and Turkey members and signatories of Energy Charter, the pipeline cannot be stopped if it ever came to implementation,” he said, adding: “Whoever, has EEZ rights over the seas between Cyprus and Crete can only make environmental objections and may request rerouting of the pipeline, but according to the Energy Charter Treaty cannot stop it.”

US support for Israel, Greece and Cyprus

On 20 December, US President Donald J. Trump signed the EastMed Act to primarily promote security and energy partnerships in the Eastern Mediterranean. Through this Act, otherwise cited as the “Eastern Mediterranean Security and Energy Partnership Act of 2019,” the US commits to continue robust official strategic engagement with Israel, Greece and Cyprus and to actively participate in the trilateral dialogue on energy, maritime security, cybersecurity and protection of critical infrastructure conducted among the three countries.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media

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