Increased Activity in the East Med Gas Sector
The East Mediterranean natural gas sector has been a riddle with continuous changes in plans by all players both state and corporate for quite some time. A set of new initiatives has shed more light into the activities, particularly those involving a potential new axis that will encompass Bulgaria, Greece, Cyprus and Israel.
The Bulgarian Energy Minister Vassil Shtonov paid a visit to Athens on the 12th of September and meet with his Greek counterpart Ioannis Maniatis in order to set up a concrete agenda on gas cooperation via interrelating gas projects.
The common points touched upon (and agreed on in principle) include further reliance on LNG imports in order to secure energy security in the region in light of the Ukrainian crisis and the long term perspectives of the EU. Moreover, key aspects of the two countries bilateral cooperation was characterized by an adherence to the Interconnector Greece-Bulgaria (IGB) in combination with an FSRU facility nearby that will be linked to the East Med gas reserves via either a pipeline or by LNG carriers.
Concurrently in Cyprus and during the proceedings of the 2nd East Mediterranean Gas Conference, the former president of the hydrocarbon agency of the country, Charles Ellinas, pointed out that there are decreasing opportunities for the construction of an LNG terminal on the island due to softening prices worldwide and in the EU in particular.
That brings about the prospect of a pipeline stretching all the way from Israel into the Balkans. By coincidence or not the Israeli side through its foreign minister Avigdor Lieberman supported that view by stating in favor of the "East Med gas pipeline" that will aim to supply Greek and Balkan markets with an interconnection to Italy through the long-term plan of the IGI-Poseidon link in the Ionian Sea.
More interestingly and in parallel the Cypriot government and the Egyptian one concluded an agreement on their bordering Exclusive Economic Zones (EEZ) that potentially pave the wave for an uninterrupted construction of an underwater pipeline along with joint ventures for more gas discoveries in the East Mediterranean sea region.
In overall it has also to be pointed out that Israel has recently struck a long-term deal with Jordan for the export of gas worth 15 billion USD and Cyprus has also signed a memorandum of understanding with Amman.
Thus it is not clear yet, which direction the gas will follow since the amounts, although significant they are not able to meet the demand in both directions, while still the option for a pipeline into mainland Turkey stands in the table. What be expected though is more hard bargaining behind the curtains and between a wide range of actors and in a very crucial moment for the stability of the whole region which is in the limelight because of terrorism, civil wars and political upheaval.