EU Energy Ministers Discuss Energy Diversification Options
The recent events in Crimea have reminded Europe of the pressing need to diversify the sources of supply. The EU net imports of natural gas are expected to remain stable and then slightly increase to reach about 340-350 bcm by 2025-2030, thus its need to find new sources of energy including in the form of LNG and from various geographical markets such as the Caspian region, the Middle East, Norway and the Eastern Mediterranean.
Cyprus’ Minister of Energy George Lakkotrypis met with his peers, the Energy Ministers of the EU, in Athens on 15 and 16 May for an informal meeting to discuss energy efficiency, energy security and energy infrastructures. The EU’s goal to strengthen energy security has triggered measures to accelerate the completion of the internal market by 2014, end the isolation of Member States from Europe’s continental energy networks by 2015, moderate demand through energy efficiency measures, develop indigenous resources and sustain efforts for diversification.
Eastern Mediterranean gas could be, if not a solution at least an option of diversification for Europe. Israel and Cyprus have both made discoveries off their shores in their respective Exclusive Economic Zones while Lebanon is in the process of launching its first offshore licensing round in the hope to encounter substantial amounts of hydrocarbon.
In the meeting, Lakkotrypis updated the group on the recent developments in Cyprus’ natural gas explorations and reaffirmed the island’s national strategy to build an onshore LNG terminal that would allow Cyprus the flexibility to reach future export markets. Cyprus’ Aphrodite field in Block 12 of its EEZ has an estimated gross mean resources of 5 Tcf. More exploratory drilling will be conducted by major oil and gas companies such as Total and ENI/KOGAS in 2014-2015.
Israel’s Leviathan and Tamar fields hold respectively 19 and 10 Tcf in gross mean resources. Israel has taken a decision in principle to export approximately 40% of its proven reserves but has not yet formulated its export strategy in terms of the chosen routes to reach potential customers.
The Eastern Mediterranean proven reserves could play a role in Europe’s quest to diversify its sources of supply. Europe’s need to increase its energy security could lead increased investments to achieve this purpose. For Cyprus, the benefits are beyond economic, as they could also translate in improved peace prospects for the divided island. While all peace talks have failed in the path, the gas factor brings new hopes to the island. .
Karen Ayat is an analyst focused on energy geopolitics. Email Karen on ayat_karen@hotmail.com. Follow her on Twitter: @karenayat