In gentle of Russia’s invasion of Ukraine and EU’s renewed effort to chop reliance on Russia, the East Mediterranean may play an elevated function in Europe’s vitality safety as a number of sources within the area could possibly be unlocked, together with fields in Cyprus and Israel.
“One of the key areas they want to bring forward, should bring forward is around Cyprus but also off Israel as well. They look very significant finds. And, of course, all western nations at the moment are scrambling around for alternative sources and all of them are chasing the same sources so the cost of that will be going up,” Justin Urquhart Stewart, co-founder of Regionally in London, advised New Europe by telephone on March 16. “But it’s fascinating to see how quickly the attitude towards different types of power production have changed. So, moving away from A: another supplier not Russia for oil or gas and B: actually carrying your own exploration and see what you can find,” he added.
But provided that the timelines set by Europe to grow to be unbiased from Russian fuel are quick, by 2027, solely initiatives that may ramp up shortly can profit, Charles Ellinas, senior fellow on the Atlantic Council’s Global Energy Center, advised New Europe on March 17. “For example, Israel’s already developed gas fields, Leviathan and Tamar. Cyprus gas fields, Aphrodite and Glafkos, would take a few years to develop, by which time it could be too late. Unless of course Europe changes policy and promotes natural gas use in the longer term. However, right now that looks unlikely. Europe has re-emphasized its determination to accelerate energy transition. And within that, it is aiming to reduce gas use by 30% by 2030 and to zero by 2050. Not a message to encourage investment in new long-term fossil fuel projects,” Ellinas stated.
Given the short-term timelines, Egypt’s current services are the best choice, he stated. Egypt is already exporting liquified pure fuel (LNG) to Europe and plans to extend exports this 12 months. But portions are comparatively small – 2 billion cubic meters final 12 months and possibly a little bit bit extra this 12 months, Ellinas stated, noting that, in help of this, Israel has already elevated its export capability to Egypt to about 11 billion cubic meters via the offshore East Mediterranean Gas (EMG) Pipeline and thru Jordan liberating extra Egyptian fuel for LNG exports.
According to Ellinas, an choice could be to develop its two LNG vegetation at Idku and Damietta by including extra liquefaction trains, however this could require at the least three years. “Given that Asian LNG markets are nonetheless rising, this can be a chance. If it occurs, it will present a chance to unlock Cyprus’ fuel fields and the second section improvement of Leviathan.
The EastMed fuel pipeline or a pipeline from Israel via Turkey to Europe, that has made the headlines just lately, are each troublesome as a result of they would wish 5 years to assemble and 20 years of operation and exports to justify costly investments,” he stated, including that Europe’s said insurance policies to move away from fuel prior to later and dedication to renewables make this troublesome. “Investors need certainty and that is lacking,” he stated.
Kurt Volker, former US Ambassador to NATO and senior worldwide advisor at BGR Group, advised New Europe by telephone on March 18 Russia’s invasion in Ukraine has prompted Europe to drastically scale back its reliance on Russian vitality provides. “I think it’s a game changer. The Germans have not officially called off Nord Stream 2. At least not yet. But I think there is a movement now to dramatically reduce supplies from Russia to Europe. The British said they are going to stop importing Russian oil and gas by the end of the year. The EU has not given a date, but I think there is pressure to significantly reduce at least,” Volker stated.
Everyone will want different vitality provides, Johannes Benigni, chairman of research agency JBC Group, advised New Europe by telephone on March 17. “I would definitely consider natural gas in whatever shape or form to be the energy of the future. Why do I say that? It has even less to do with Europe. The matter is a pure mathematical function. Two thirds if not more of Asia of energy requirement is coming from coal. You want to decarbonize the world and you manage to reduce that coal content and switch it against gas, you are reducing CO2 emissions by half,” Benigni stated.
“It’s a massive problem. We need content of energy and is easiest if we do it with a lower carbon fossil fuel. That’s why I would say that gas has a future. The problem is pipeline. Pipeline requires trust. The future of European supply means we will have pipelines with Russia, but everyone is going to build now LNG Re-gas stations. Why? Because nobody wants to say, ‘Well, we’re dependent on Russia’. So, what will happen is they will build Re-gas stations, nobody will use it, everyone is going to still use the pipelines,” Benigni argued.
“But when it comes to the Eastern Med market, we know that political stability there is not a given and so you have the same or equal situation like in the Middle East. Meaning in the Arab Persian Gulf,” he stated. The chairman of research agency JBC Group defined that within the Persian Gulf the most cost effective chance to offer fuel could be a pipeline across the Gulf. But he pointed that every one the international locations choose to construct LNG services as a result of they don’t need to be depending on one another. “So, I therefore believe the more flexibility you can offer the better it is. If I had gas, I would build an LNG facility because it’s going work because at the end of the day demand for gas in the next 30 years is going to be so strong because the overarching objective will be to decarbonize the world and gas is the only solution,” Benigni argued.
Turning to renewables within the East Mediterranean, Ellinas stated that’s the place the way forward for East Med vitality is. “Maximize use of renewables, supported by storage and electrical interconnections, and use of regional gas resources during energy transition as back-up to renewable intermittency. The potential is huge and given Europe’s lead, the East Med should follow,” Ellinas stated, noting that with the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) as keen companions, funding alternatives could be forthcoming.