25. May 2017
Eyes on Europe

What’s next for the Eastern Mediterranean natural gas?

WHAT’S NEXT FOR THE EASTERN MEDITERRANEAN NATURAL GAS?

 

The discovery of natural gas reserves in Tamar (2009) and Leviathan (2010) in Israel, and in Aphrodite gas field (2011) in Cyprus raised questions about the feasibility of so-called “peace pipelines”. Some argue that through energy cooperation political impasses could be overcome. However there is little evidence that suggests that it would be the case from a the Eastern Mediterranean energy prospect, at least in the near future.

 

If the Eastern Mediterranean Region distinguishes itself from the Levant or the Middle East (Leigh, M., 2014), it is however still bound to the geopolitical implications of its location. Syrian War and the instability of neighboring countries aside, the Cyprus question remains  one of the most important concern influencing future prospects of the natural gas exploitation in the region.

Although generally geopolitics are avoided to be treated under the International Relations theories (Gokmen, 2010), every country is constrained by its geographical realities, which in turn bear an impact on the inter-state relations and politics of the respective country (Gokmen, 2010). While the commercial and monetary interests regarding the exploitation of the energy resources can influence the foreign policy decisions of countries to a certain extent, the reverse is also true. Indeed, according to neorealists, the energy companies are held by and primarily oriented towards national interests (Winrow, 2016), sometimes to the of commercial interests themselves. A case in point would be Russian energy company Gazprom, whose commercial activities are highly influenced by Russian foreign policy.

 

The Options to Monetize Eastern Mediterranean Gas

 

A natural alliance was formed between Israel, the Republic of Cyprus and Greece following the gas discoveries in the region. But, most importantly, the incentive for such cooperation was the troubled relationship of the three states with Turkey which claims a prominent regional role. In that context, two projects were proposed with the support of the European Commission. They have indeed be recognized as part of the projects of common interest (PCI), namely energy projects increasing the competitiveness of the EU’s energy market and helping the diversification of EU’s energy suppliers in order to ensure energy security of the European Union (European Commission). The first project planned is the Euro Asia interconnector, an underwater electricity cable that passes from Israel to Greece through Cyprus. The second project is a pipeline from offshore Cyprus to Greece, however due to the depth of the sea the costs of this project remain relatively high compared to other options in spite of the EU financial support (Winrow, 2016; Stergiou, 2016). On the other hand, an LNG (liquefied natural gas) facility in Vasilikos in Cyprus was foreseen by the companies invested in the Aphrodite gas field. Nevertheless, in 2013 it was discovered that the natural gas in the reservoir was only 1/3 of the forecasts, which was not sufficient enough to invest in an LNG plant not covering Israeli gas as well (Stergiou, 2016). Furthermore Leviathan partners (Noble Energy and Delek Drilling) also considered exporting options by LNG facilities, however a deal foreseen on that matter with the Australian Woodside Petroleum was canceled due to regulatory and tax issues in Israel (Winrow, 2016). The exploitation the Leviathan and Tamar gas fields and its potentialities of by American Noble Energy and the Israeli Delek Drilling extremely suffered from the incident.

However, on the 13th of October the Israeli Energy Minister Yuval Steinitz met the Turkish Energy Minister Berat Albayrak. During the meeting Ankara also expressed their will to realize humanitarian projects in Gaza to which Steinitz responded, “Israel welcomes any involvement of Turkey in improving lives of ordinary people in Gaza. We will do our best in order to enable this” (Israel Hayom, October 2016). While keeping energy cooperation options open with Jordan, Egypt, Cyprus and Greece, Steinitz underlined that, nonetheless, “the Turkish option is very important” (Times of Israel, October 2016). In the meantime, Isreal also struck a deal on its natural gas with the Jordanian government in October, which however rose protests by the Jordanians over Amman’s decision to import Israeli gas (Israel Hayom).

 

What about Cyprus?

 

As far as Cyprus is concerned the aformentioned envisaged energy cooperation deals face one major difficulty. The island is divided in two since 1974 in the aftermath of a Greek Cypriot coup d’état attempting a so-called “enosis” (reunion) with Greece where Turkish Cypriots’ right to self-determination was not considered. In 1974 Turkish military forces entered the island which was then followed by the declaration of independence of the Turkish Republic of Northern Cyprus (TRNC) in 1983. Today, although the Turkish Republic of Northern Cyprus possesses all other conditions for statehood such as territory, population, and governmental authority, it lacks international recognition except from the Turkey (Stergiou, 2016).

 

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On the grounds of the 1960 Constitution of Cyprus, both Turkey and the Turkish Republic of Northern Cyprus contend that the two Cypriot communities have their equal rights to exploit the resources of island. On the other side of the border the southern Republic of Cyprus refuses hitherto to give its consent to the contemplated pipeline from the Leviathan gas region to Turkey which will, indeed, have to pass through the Exclusive Economic Zone (EEZ) of the Cypriot Island. Israel refrains to bypass the consent of the Republic of Cyprus and, in any case, the present war in Syria does not permit the envisioned pipeline to go through the EEZ of Syria.

 

In order to reach a settlement of the « Cyprus situation’ » real progresses have to be made by the two Cypriot communities but also by the other parties concerned. The efficient exploitation of resources is in the interests of the whole region in additition to being a true financial opportunity for Nicosia which in 2013 underwent a tough financial crisis. In this context and is political obstacles can be overcome, Turkey is likely to become the future energy hub. As the former Energy Minister of Turkey Yildiz stated, Turkey is the “centre of energy geopolitics between Caspian region, Middle East and Europe” (Winrow, 2016).

 

Cansu Oguz, International Relations MA Graduate