‘Cooperation on gas critical to regional stability'

By
June 10, 2013 19:38

Natural gas finds in Eastern Mediterranean must be used to leverage regional cooperation on energy sources, experts stress.




Tamar natural gas rig.

Tamar natural gas rig 370. (photo credit:Albatross)

With Jordanians suffering electricity shortages due to the ongoing influx of Syrian refugees and Lebanon’s capital city facing occasional 24- hour power outages, the natural gas finds in the Eastern Mediterranean must be used to leverage regional cooperation on energy sources, experts stressed at a conference last week.

“If the Lebanese have gas, if we have gas, if the Palestinians have gas opposite the Gaza shore, is it smart, is it profitable to lay three different pipelines?” asked Dr. Oded Eran, a senior research associate at the Institute for National Security Studies. “In my opinion it is not.”

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Eran was speaking at the “Natural Gas in the Eastern Mediterranean – Economic Impacts and Strategic Implications” conference in Tel Aviv on Thursday, which was sponsored by the Institute for National Security Studies, Friedrich Ebert Stiftung, the Macro Center for Political Studies, the Israeli European Policy Network and the German Marshall Fund of the United States.

Academics and government officials from the region and abroad addressed the potential impact that the area’s gas finds may have on Israel and its neighbors, as well as the larger international market.


Eran and other experts advocated a collaborative approach on developing the resources for a greater benefit – even if such an approach meant crossing traditional barriers.

Gas from Israel’s 282 billion cubic meter Tamar reservoir is already flowing, while its neighboring 535 b.cu.m. Leviathan basin is set to come online within a few years.

More exploration is occurring in various blocks of Israel’s Exclusive Economic Zone, and the same goes for that of Cyprus, where substantial finds have already been discovered in the Aphrodite reservoir. Development of Gaza’s Marine natural gas field has yet to occur, and exploration in Lebanon’s possible offshore reserves is just beginning.

“In my opinion we have an opportunity for shared usage,” Eran said. “We have opportunity to share the energy resources and infrastructure.

We’re not speaking to those who run the government in Gaza today, but it does not necessarily have to be direct dialogue.”

A shared transport pipeline for these three entities could be the most efficient and economically beneficial way to transport the gas, and a foreign company could play a role as a mediator between the various players, according to Eran. Transmission from Israel’s Leviathan field alone is expected to cost about $4.5 billion, he stressed.

“There are days in Lebanon in which there are only four hours of electricity,” Eran said, noting that the country’s electricity capabilities are considered to be the worst in the world by the World Economic Forum.

“Lebanon and Israel now share a common interest.”

Another neighbor of Israel is without its own natural gas but is in critical need for the resource, according to Eran.

With around a million refugees entering Jordan from Syria in the past year alone, increased energy and water – which is dependent on energy – supplies are needed.

“These people are not returning to the places where they came from very quickly,” Eran said of the refugee situation.

“From a strategic perspective it is in our best interest for Jordan to be able to sustain itself without these million new people in the country causing the situation to deteriorate,” he continued. “Jordan has to be connected to gas production within Israel.”

As the Israeli government continues to develop an export policy, the country must consider at what price it truly becomes more worthwhile to export to China and Europe over its neighbors, Eran explained.

“There is a window of opportunity that is today and tomorrow, but it is not going to be open for that long,” he said.

Echoing some of Eran’s opinions, Noble Energy’s Director of Corporate Affairs Bini Zomer said that exporting to and cooperating with Israel’s neighbors on gas will be crucial.

“Today Noble Energy and our partners have the opportunity to strengthen ties by selling gas from Israel to Jordan, by selling gas to Egypt,” Zomer explained.

Other strong possibilities, he added, include selling gas to Turkey’s “vast and growing market,” as well as partnering with Cyprus to make the area “become a LNG [liquefied natural gas] hub.” But before any such collaborations can go forward, the Israeli government must solidify its export policy and ensure stable market opportunities, he stressed.

Looking at the region’s discoveries from a more global perspective, Charlies Ellinas, CEO of Cyprus Hydrocarbons, emphasized a need “to pursue the Eastern Mediterranean gas corridor more vigorously.”

“If we combine Cyprus, Israel and Lebanon’s resources we can actually supply as much as 50 percent of Europe’s additional gas needs by 2025,” Ellinas said.

Leonidas Kioussis, a European Union Commission representative, agreed that for the next decade or two, until Europe can develop its renewable energy resources, there will be an increasing need for natural gas imports. By 2015, he said, “a substantial gap will emerge between demand and supply.” The EU is therefore looking at the Eastern Mediterranean with “fascination” and “hope,” albeit also with “uncertainty,” he added.

Though not one of the conference’s speakers, Gidon Bromberg – Israeli director for the Friends of the Earth–Middle East NGO – attended sessions on Thursday morning out of his organization’s interest in developing regional ties over natural resources, particularly water.

“There are some real winwins possible beyond the economic windfalls when we look at the issue from the regional perspective of energy, water, environment and security,” Bromberg said, noting that the Israeli public must be involved in making such decisions.

As far as Jordan goes, Bromberg added that the need to sell the country natural gas was clear.

“Israel is already an important supplier of emergency water needs for Jordan,” he said. “The energy needs are just as critical and it’s in Israel’s interest to indeed look from a regional perspective.”

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