With vast reserves of natural gas at stake, regional tensions in the Eastern Mediterranean are heating up.
While the gas reserves in the Eastern Mediterranean have helped cooperation between Israel and Egypt, they have led to more conflict with Turkey and its neighbors.
The Eastern Mediterranean has already become a significant source of natural gas production, but fully developing the region’s gas reserves, as well as finding ways to move that gas to market, has been extremely challenging.
Texas-based Noble Energy and Israel’s Delek Group, the two companies producing gas in Israeli waters, will ship about 64 billion cubic meters of natural gas over the next decade to Egypt’s Dolphinus Holdings.
If the GCC crisis lasts for months or even years, the appeal of more extreme measures could grow over time.
The Eastern Mediterranean has not seen dramatic development to date, but the scale of its reserves could be enormous and potentially alter the energy security and trade outlooks for the different countries in the area.
The Egyptian government, in order to raise revenues, has increased taxes on ships that use the Suez Canal, but the move will likely backfire, as oil-at-sea volumes will find other routes to reach their destinations.
Egypt was facing a future of steep import bills to meet natural gas needs, but that could all change if Eni’s new discovery lives up to the hype.
Optimists believed that development of a the Leviathan natural gas field could mitigate some of the most volatile tensions in the Middle East, improve regional energy security, and even allow Europe to reduce its gas imports from Russia.