As the EU seeks to achieve independence from Russian gas by 2027, it is working on both supply and demand. To tackle demand, its member states have been asked to voluntarily reduce gas consumption by 15% between August 2022 and March 2023, with certain caveats and exemptions. Other options include turning down thermostats, pooling gas demand, joint purchases and greater infrastructure interconnectivity. On the supply side, European imports of US LNG have meanwhile more than doubled from 11.18 million tons in the first half of 2021 to 28.20 million tons for the first half of 2022. As the EU seeks additional supplies, too, from Azerbaijan, Norway and Qatar, the Eastern Mediterranean could also be critical in helping meet Europe’s gas needs, if the opportunity there is properly grasped.

The Eastern Mediterranean has ample reserves that could help Europe’s gas supply diversification efforts. Israel has discovered and developed approximately 1 trillion cubic meters (35.3 trillion cubic feet) of gas, while Cyprus has contingent resources of between 200 billion-400 billion cubic meters. Egypt too has substantial volumes of gas, and, although it produced 6.46 billion cubic feet per day in May and consumes most of this at around 6.09 Bcf/d, Egypt can nonetheless export some volumes, especially during the lower Eastern Mediterranean winter consuming months.

It is noteworthy that for more than two years, Israel’s Leviathan and Tamar gas reservoirs have been supplying significant quantities of natural gas to customers in Jordan and Egypt, with volumes reaching 700 million Bcf/d this summer to Egypt alone. This supply is important, too, from a perspective of collaboration between the countries. However, going forward, this can be enhanced, and it is estimated that Israel, Cyprus and Egypt could jointly supply plus/minus 20 billion cubic meters per year to 25 Bcm/yr to Europe, for a period of 15-20 years from 2027. Substantially smaller volumes could also be exported immediately to the EU via any ullage available at the existing Egyptian LNG facilities at Damietta and/or Idku.

There are a number of options to export gas from the Eastern Mediterranean to Europe:

• In the immediate term, LNG via Egypt is feasible for volumes of between 5 Bcm-10 Bcm/yr depending on ullage at Egyptian facilities, and based on the existing transmission capacity in the Israeli and Egyptian pipelines, as well as the interconnections between them. In the mid to longer term, exporting larger volumes of LNG via Egypt would require a new offshore route to pipe Israeli and Cypriot gas to one or both of Egypt’s LNG facilities and upgrading of liquefaction facilities. This could probably be done in the shortest time span and with the lowest capital expenditure, compared with other export scenarios. This will boost already-positive cooperation currently between Israel and Egypt (mostly on security but also on gas). Strong lobbying by President Abdel Fattah el-Sisi to ensure that Egypt becomes an energy hub will be paramount in promoting the Egyptian LNG option for the region’s gas.
• The East Med Poseidon project, which is being promoted by IGI Poseidon, a joint venture between Italy’s Edison (EDF group) and Greece’s Depa, would require the construction of an approximately 2,000 kilometer pipeline system, mostly offshore, but also partially onshore, up to a final entry point in southeast Italy. This is probably the furthest advanced project in terms of feasibility studies and has received EU support including financial aid of about €35 million for the study.
• A pipeline to Turkey is certainly the shortest direct route into Europe, but years of enmity between Turkey and Israel means that a substantial diplomatic change has to take place and strong guarantees provided to move in this direction, despite President Recep Tayyip Erdogan’s rekindled interest in Israeli gas. This option is potentially the most difficult one politically, not only for Israel and Turkey, but also for Cyprus and Greece, as well as Europe more widely, to agree on replacing reliance on Russia with greater reliance on Turkey. The project is still an interesting one that can benefit from Turkey’s interconnection via the Trans-Anatolian natural gas pipeline and Trans-Adriatic pipeline into Eastern and Central Europe.
• An Israeli floating LNG (FLNG) facility, is an option that has grown in traction over recent months. This would provide a measure of independence from geopolitical hurdles and optimum flexibility of supply (not just to supply gas to Europe but to regional and global consumers as well) and control of the asset. The capital investment required would probably be similar to that of a pipeline to Europe for the same volume of gas, albeit with slightly higher operational expenses due to the liquefaction element. This is an option that has come to the forefront recently as it circumvents all of the hurdles and quagmires that a large-scale Egyptian LNG option or Turkish option could entail. It is also more complex technically than a pipeline to Egypt or Turkey, while FLNG also still represents a niche market.

What’s Needed for Progress

The key players will have to agree on one or two export options and push the government of Israel in particular, but other regional players, too, on what is needed to get matters moving. This includes ensuring that their relevant institutions provide the right backing and platform to enable projects to be financed and reach final investment decisions. Both sellers (Israel and Cyprus) and buyers (Europe) need to support the projects — such as via financing — and work in unison to speed up upstream development and transmission infrastructure to connect the Eastern Med to Europe.

Becoming a gas supplier to the EU would provide Israel and the region with both economic and political benefits. On the economic front, additional exports could represent revenue for the Israeli government of around $1.5 billion per year, while on the political level, this would substantially enhance Israel’s standing with the European bloc, as well as cementing Israel’s regional position in the Eastern Mediterranean based on energy cooperation. For Cyprus, it would finally enable the development of its gas supplies. Both countries would be regarded as stable and reliable suppliers to Europe, providing a much sought-after diversity of gas sources.

To avail of this opportunity, Europe will need to provide clarity about what it wants — something that can be difficult given the EU’s power structure. But unless all the stakeholders act speedily, in a coordinated and professional manner, there is a risk of procrastination to the point that the opportunities offered by the East Mediterranean may be lost forever.

Gina Cohen is an independent consultant to the natural gas industry, based in Israel. Specializing in the Eastern Mediterranean, she has worked with gas exploration companies and major buyers in the region, as well as government institutions. The views expressed in this article are those of the author.