Israel and Cyprus plan to share Aphrodite’s gas field, let’s talk first
Israel and Cyprus have reached an agreement over the Mediterranean Sea’s gas reserves straddling their maritime border, resolving a long-standing dispute over offshore resources, which could open the development of the Aphrodite gas field.
“What Cyprus and Israel have agreed is a framework on the basis of which companies can negotiate and agree on quantities – that is, how to divide Aphrodite,” Charles Ellinas, a senior researcher at the Atlantic Council’s Global Energy Center told New Europe on March 12. “This is something they haven’t been able to do until now,” he added, noting that the owners of the Aphrodite gas field and the Ishai block in Israel’s Exclusive Economic Zone (EEZ ), in which Aphrodite expands, can now negotiate and agree on how to divide Aphrodite’s gas reserves and how the Ishai Block companies will be compensated if gas ever reaches the markets.
The development of Aphrodite, which was discovered in 2011, in Cypriot waters has been delayed as a small part of it extends into Israel’s maritime area and another gas field. Reuters quoted Cypriot Minister of Energy, Trade and Industry as Natasa Pilides saying that she and the Israeli energy minister Yuval Steinitz agreed on a framework to solve the problem and guidelines would be sent to the companies involved in the project.
“The framework will be defined in a joint letter in preparation. We are both very happy that we are now at this point after nine years of discussion, ”Pilides told reporters as Steinitz, who was in Cyprus to sign an agreement to create an underwater power cable that will cross the Mediterranean. and will connect their power grids, prepared to leave the island, Reuters reported.
Steinitz said there was a fair chance of an eventual resolution. “Nothing is certain, but there is a good chance that it will lead us to a solution of this small but important obstacle in the wonderful relations and cooperation between Cyprus and Israel on energy and on many other issues,” quoted the Cypriot news agency. saying.
When asked if Cypriot gas export is more viable now, Ellinas told New Europe that it makes it easier to make gas sales deals, but does not necessarily make it more viable. “This requires a firm deal to sell the gas to the Idku liquefaction plant in Egypt,” he said, adding that negotiations on this are ongoing, but low prices for liquefied natural gas. (LNG) in global markets are a challenge.
Meanwhile, Steinitz has reportedly said he expects Israel’s gas exports to Egypt to double. The Israeli minister who began a visit to Cairo on March 9 to attend the Eastern Mediterranean Gas Forum (EMGF) meeting reportedly said Tel Aviv and Cairo would support the undersea pipeline to double the amount of gas can be sent to Egypt. facilities. Steinitz said he expects construction of the second 10 billion cubic meter pipeline will take a year or two. He added that the capacity of the pipeline could increase in the future.
Ellinas said it was a political statement. “Israeli gas exports to Egypt can double if gas sales agreements can be made, which is not a given,” said the Cypriot expert.
Turning to the Memorandum of Understanding (MoU) to facilitate the construction of the submarine cable between Israel and Cyprus and Greece signed on March 9 in Nicosia, Ellinas noted that part of this project is progressing well. “It is the interconnector between Cyprus and Crete. It has been approved as a Community Project of Common Interest (PCI) and is eligible for EU and EIB funding. However, the cable between Cyprus and Israel cannot qualify as PCI and will require investment from both governments and other investors, which makes it more difficult, ”Ellinas said.
When asked if all of these projects signal an energy boom in the region after a long period of discussion, Ellinas replied, “Not really. But there is an awakened political activity, with greater impetus to get regional energy projects off the ground ”. He noted that this may have been due to a realization that with the rapid advancement of renewable energy projects and the increase in net zero emission commitments from major energy consuming countries, the window of opportunity he opportunity to sell gas from the Eastern Mediterranean is closing fast.
“However, the shift to clean energy has led to a supply capacity of natural gas and LNG available in world markets that exceeds demand and, therefore, at low prices – to stay with us longer. term – which makes it difficult to find buyers for the more expensive ones. East Med Gas, ”Ellinas said, adding:“ For any of these projects to progress towards completion, they require firm gas sales contracts, which is proving to be a challenge ”.
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