The agreement between the European Union, Israel and Egypt in Cairo on Wednesday could pave the way for natural gas exports from these countries to reach Europe.
The Memorandum of Understanding calls for Brussels and the two Middle East countries to work on a “stable supply” of gas to the European Union. It also encourages European companies to invest in fuel exploration and development in Israel and Egypt.
The agreement is not legally binding, but may prove an important step in realizing the long-discussed potential of the Eastern Mediterranean as an important energy supplier in industrialized Europe.
European Commission President Ursula von der Leyen visited Israel on Tuesday and Egypt on Wednesday to put natural gas on the agenda.
“We are beginning to take full advantage of the potential of the EU-Egypt relationship,” Von der Leyen said Wednesday.
Since Russia’s entry into Ukraine, Ms. Von der Leyen has led block scrambling to reduce Russia’s dependence on fuel and find alternative sources. The quest has become even more urgent after Russia’s state-owned gas company Gazprom recently cut off supplies to Poland and Bulgaria, reducing its flow to Germany.
Israel and Egypt meet the bill. They are conveniently located around Europe, and oil companies have recently made extensive discoveries of natural gas off the coast of both countries.
Washington has long sought to encourage cooperation on gas in the region. We believe that energy ties help to solidify peace between former enemies like Egypt and Israel. The European Union has the potential to step up this effort.
From the perspective of a major energy company, the region is slowly transitioning from a geopolitically dangerous area to a promising source of natural gas. Betting that this momentum will continue, in 2020 American oil company Chevron acquired Noble Energy, an American company that discovered most of Israel’s gas, for about $ 4 billion.
The Italian company Eni has developed a huge gas discovery off the coast of Egypt.
Gas has also been found off the coast of Cyprus, and commercial quantities of fuel may be used in other countries in the region, including Lebanon and Syria.
The first increase in exports will probably be brought about by two liquefied natural gas facilities on the Mediterranean coast of Egypt. Gas from Israel is either poured into these cooling plants or used to provide household fuel to release more gas for shipping to Egypt, which is already a substantial exporter. There is a possibility that
Pipelines to Europe have also been considered for a long time, but so far, potentially high costs and geopolitical tensions have opposed the construction of pipelines.
The agreement refers to developing plans for the efficient use of infrastructure for transporting gas to the European Union. Egypt also aims to serve as a “regional hub” for natural gas exports and trade.
The European Union has argued that there is a time limit on gas initiatives, in line with climate change ambitions. According to the agreement, fuel will “play an important role in terms of energy consumption and power generation” in the European Union until 2030. Later, the agreement states that climate concerns will reduce its use.
