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Key messages:
The discovery of sizable natural gas reserves off the coasts of Cyprus, Egypt and Israel over the past decade has revealed a promising resource potential in the Eastern Mediterranean and at the same time challenges in converting part of this potential into exploitable commodities. The discovery of gas resources in the Eastern Mediterranean added a new layer of complexity to a region already marred with decades-old conflicts.
Amid increasingly competitive gas markets the East Mediterranean Gas Forum (EMGF) offers a platform to coordinate efforts among the various players in the region to lower costs and improve regional integration.
Amid increasingly competitive gas markets the East Mediterranean Gas Forum (EMGF) offers a platform to coordinate efforts among the various players in the region to lower costs and improve regional integration.
The author of this paper starts by providing a quick overview of the EMGF, its objectives and internal working mechanisms, and its first efforts to assess– with the aim of improving– prospects for monetization. The author then explores the geopolitical dynamics with a focus on mapping perceptions of threats emanating from various regional actors, as these dynamics have played a role in the establishment and membership of the Forum. In the third and last part, the author focuses on bringing offshore Eastern Mediterranean gas to market.
Key messages:
- The East Mediterranean Gas Forum (EMGF) was announced in 2019 in Cairo. In 2020, it transformed into an international intergovernmental organization based in Cairo that includes Cyprus, Egypt, Greece, Israel, Italy, Jordan and Palestine.
- A series of offshore gas discoveries over the past decade—and the potential for more discoveries to come—have brought attention to the Eastern Mediterranean, despite complicated prospects for monetization.
- Much of the Eastern Mediterranean gas reserves, particularly those off of the Israeli and Cypriot coasts, were discovered in deep waters and are complex and expensive to develop. Insufficient infrastructure, limited local markets and geopolitical tensions add to these challenges.
- The establishment of the EMGF responds to the need for a regionally coordinated effort to unlock the full potential of Eastern Mediterranean offshore gas wealth. Forum members aim to involve the private sector and financial institutions to improve the prospects for profitable exploitation of the gas reserves.
- For a chance to improve the competitiveness of these offshore resources, a collaborative regional approach is needed, geared toward capitalizing on existing infrastructure, creating synergies to bring upstream costs down, and reviewing certain aspects of the regulatory frameworks to help make exports viable. The EMGF offers a platform to coordinate such efforts.
- Local and regional markets represent the most technically logical destination for offshore Eastern Mediterranean gas resources. But regional tensions stand in the way.
- The establishment of the EMGF has a geopolitical dimension fueled in particular by poor or troubled relations between Turkey and its neighbors. While sizable reserves have been developed so far, despite various conflicts in the region, this climate raises a range of risks and complicates prospects for monetization, which could deter investments and affect future exploration activity.