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Energy Security in the Eastern Mediterranean Prontera / Ruszel: Energy Security in the Eastern Mediterranean Energy Security in the Eastern Mediterranean Andrea Prontera and Mariusz Ruszel Dr. Prontera is assistant professor of international relations in the Department of Political Science, Communication and International Relations, University of Macerata, Italy. His latest book is The New Politics of Energy Security in the European Union and Beyond: States, Markets, Institutions (Routledge, 2017). Dr. Ruszel is assistant professor in the Department of Economics, Rzeszow University of Technology, Poland. he geopolitical significance of the means considering energy trade as a tool Mediterranean Sea region is the for achieving foreign-policy and security result of three factors: its location objectives.3 However, the geopolitics of at the junction of Europe, Asia natural gas is particularly complex. In Tand Africa; its significant international sea contrast to oil, natural gas has physical routes and straits — Gibraltar, Bosphorus, characteristics that make transportation Dardanelles, Suez Canal — and its poten- expensive, whether through pipeline or in tial as a source of oil and natural gas. Re- liquefied form (LNG). This constitutes a cent gas discoveries in the Eastern Medi- significant fraction of the total delivered terranean have only reaffirmed this poten- cost of the gas trade and is an important tial. They have resulted in a set of signifi- component of the sector’s political econ- cant geoeconomic decisions concerning omy.4 Normally, the infrastructure for gas the development of flows and exchanges transportation requires huge investments, a in the form of traded gas. It is emphasized long-term perspective and political stabil- in the literature that the geoeconomy may ity. Owing to these fixed infrastructural connect geopolitical strategy and economic components, the gas sector is particularly policy, but it is usually perceived as the use sensitive to political relationships among of economic policy instruments to imple- countries; gas-development policies are ment geopolitical goals.1 This means the strongly affected by the security context in primacy of geopolitical interests over geo- which they are embedded.5 economic ones and the subordination of economic policy to geopolitics.2 Viewing MONETIZATION OF RESOURCES energy relations through a geopolitical lens Since the end of the 1990s, the hydro- means analyzing them as state relations carbon resources of the Eastern Mediterra- driven by national-security and foreign- nean Sea have greatly increased in impor- policy interests, not economic ones. It also tance. The major gas discoveries off the © 2017, The Authors Middle East Policy © 2017, Middle East Policy Council 145 Prontera and Ruszel.indd 145 8/11/2017 11:34:11 AM Middle East Policy, Vol. XXIV, No. 3, Fall 2017 coast of Israel and Cyprus between 2009 rapprochement, especially after the collapse and 2011 (in the Leviathan and Aphrodite of the Turkish-Israeli alliance in the wake fields) and off the coast of Egypt in 2015 of the 2010 Mavi Marmara incident. In (in the Zohr field) can have a significant the following years, Israel and Greece at- transformative impact on the politics of tempted to upgrade and institutionalize their energy security in the entire region and energy cooperation by including Cyprus, beyond (Table 1). which, after the Aphrodite gas-field discov- Israel, the first country of the region to ery in 2011, was ready to play an important make major gas discoveries, was also the role in regional energy security. The Israeli, first mover in the economic and political Cypriot and Greek energy ministers created game for its monetization, in terms of new joint task forces to evaluate the feasibility export routes and infrastructure projects.6 of several options.8 For exportation, they In July 2010, after the important discovery considered a pipeline (East Med Gas Pipe- in the Leviathan gas field, Prime Minister line) to carry gas from Israel and Cyprus Netanyahu proposed to Greek Prime Minis- to European markets through Greece, and ter Papandreou a pipeline connecting Israel a joint Israeli-Cypriot LNG plant near Vas- and Greece via Cyprus.7 Both governments silikos on the southern coast of the island. saw energy as the cornerstone of a strategic However, other projects were simultaneous- TABLE 1. The Major Gas Discoveries in the Eastern Mediterranean Sea (2000-15). Field Year of Country Estimated Main Shareholders First Gas Name Discovery Reserves (Countries of Production/Planned (bcm) Origin) (as of 2014) Noble Energy (U.S.) Mari-B 2000 Israel 42 2004 Delek Group (Israel) Delek Group (Israel) Tamar 2009 Israel 283 2013 Noble Energy (U.S.) Delek Group (Israel) Leviathan 2010 Israel 510 2017 Noble Energy (U.S.) Noble Energy (U.S.) Aphrodite 2011 Cyprus 200 2017 Delek Group (Israel) Noble Energy (U.S.) Tannin 2012 Israel 34 -- Delek Group (Israel) Noble Energy (U.S.) Karish 2013 Israel 50 -- Delek Group (Israel) Zohr 2015 Egypt 850 ENI (Italy) -- Sources: Authors’ compilation from H. Darbouche, L. El-Katiri and B. Fattouh, East Mediterranean Gas: What Kind of a Game-Changer? (Oxford Institute for Energy Studies, 2012), http://www.oxfordenergy.org/ wpcms/wp-content/uploads/2012/12/NG-71.pdf; U.S. Energy Information Administration (EIA), “Eastern Mediterranean Region, Full Report,” August 15, 2013; and ENI Press Release, “ENI Discovers a Supergiant Gas Field in the Egyptian Offshore, the Largest Ever Found in the Mediterranean Sea,” August 30, 2015. 146 Prontera and Ruszel.indd 146 8/11/2017 11:34:11 AM Prontera / Ruszel: Energy Security in the Eastern Mediterranean TABLE 2. Cooperative Projects for the Monetization of the Eastern Mediterranean Gas Resources (2011-14). Projects States Involved Gas Capacity Estimated Cost Estimated Year of (* Main (bcm/year) (USD billion) Operation (as of Supporter) 2014) LNG Plant Cyprus* and Israel 7-14 10-15 2020 Israel-Cyprus- Pipeline 30-40 17-20 Post 2020 Greece* Israel-Cyprus- Pipeline 5-11 5-10 2023-2025 Turkey* Pipeline Israel-Turkey* 5-11 5-10 2023-2025 Sources: Authors’ compilation from European Parliament, “The Prospect of Eastern Mediterranean Gas Pro- duction: An Alternative Energy Suppliers for the EU?” DG External Policies, Policy Department, April 2014. ly evaluated by each government accord- resources, a pipeline to Greece presented ing to its own energy-security agenda and many problems.10 The demand in Europe national interests. These projects included was far from certain, with growth expected an LNG plant or a floating liquefied natural- to remain sluggish at best until 2020. The gas (FLNG) plant in Israel, an Israel-Cy- European gas market presented so many prus-Turkey pipeline and an Israel-Turkey uncertainties in the medium to long term pipeline. From 2011 to 2014, various that committing new resources to it would competitive options were under consider- have been a risky undertaking, especially ation for the monetization of gas resources. when considered against the other avail- They required varying levels of cooperation able options, such as LNG facilities to from two or more countries, had different reach the more profitable Asian markets. price tags, and enjoyed different degrees of The expected cost of around $17-20 billion political support (see Table 2). was another weakness of the East Med Gas DEPA, the Greek state-owned natural- Pipeline project. From a political stand- gas company, and the Greek Ministry of point, Cyprus and Israel also appreciated Energy strongly supported the East Med the flexibility offered by the LNG solu- Gas Pipeline.9 For Greece, already in- tion. This was especially true for Israel; a volved in the development of the Southern pipeline would have linked the majority of Gas Corridor, the prospect of becoming its export gas to a single route that would a transit country for gas from the Eastern have to cross parts of the Eastern Medi- Mediterranean had both economic and terranean Sea, where claims by Turkey political appeal. The project was perceived overlapped with the Cypriot and Greek to have the potential to improve the coun- Exclusive Economic Zones (EEZs). try’s position vis-à-vis the EU. However, For these reasons, Israel was evaluat- for Cyprus, Israel, and the energy compa- ing the possibility of building an LNG or nies involved in the development of gas a FLNG facility, while, at the end of 2012, 147 Prontera and Ruszel.indd 147 8/11/2017 11:34:11 AM Middle East Policy, Vol. XXIV, No. 3, Fall 2017 Cyprus had decided to build an LNG plant a pipeline from the Leviathan field was a with an initial capacity of almost 7 billion useful counterbalance to Cypriot-Israeli cubic meters per year (bcm/year).11 The relations. The project would also have terminal, which would be built in Vassi- supplied additional gas for the growing likos, would allow Cypriot gas to reach the Turkish domestic demand. For the energy European and Asian markets. For the LNG- companies involved in the development of plant project to remain economically vi- the Israeli gas fields, a pipeline to Turkey able, Cyprus needed both financial support could have proved more profitable than from Israel (estimated at $10-15 billion) Cyprus’s proposed LNG plant. A Turk- and Israeli gas, since the Cypriot resources ish pipeline would have involved lower alone would not be sufficient to justify the direct costs and served a lucrative market. cost of an LNG export facility.12 For the Several Turkish firms showed an interest in energy companies involved, Noble Energy financing this project at an estimated cost and the Delek Group, a joint Israeli-Cypriot of $5 billion, significantly lower than the LNG facility offered several economic estimated $15 billion for the LNG plant.14 advantages: the proximity of the Leviathan However, although the project would and Aphrodite fields to each other, and mean a rapprochement between Israel and the fact that an LNG solution would not Turkey, the political obstacles were numer- restrict exports to any particular market.
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