Multibillion dollar gas discoveries could redesign Eastern Mediterranean
Major oil and gas companies have descended on the Eastern Mediterranean hoping to repeat several massive gas discoveries of recent years.
The rush began in 2015 when Italy’s ENI discovered the Zohr gas field, located in Egypt’s offshore territory. The estimated 30 trillion cubic feet of natural gas in this reservoir is worth up to $375 billion, making it the largest and most valuable discovery in the history of the Mediterranean.
The Zohr field outdid the hitherto largest gas reservoir, the Leviathan field located in Israel, which has an estimated reserve of 16 trillion cubic field, or approximately $200 billion worth of natural gas.
The massive deepwater gas fields in this region have since given way to a legion of companies that are betting more natural gas awaits to be exhumed within Cyprus’ maritime territory, which holds borders with both the Zohr and Leviathan fields.
To date, Cyprus has located 7 trillion cubic feet of natural gas (worth $87.5 billion) in the Leviathan-neighboring Aphrodite field, and is in the process of opening up exploration across blocks that share the same seamount with Zohr.
Large discoveries of gas reserves in Cyprus’ territory could bring about peace to the long-held division of the island, as Turkey would be more pliable to settling a peace accord if it would guarantee an opportunity to shift away from reliance on Russian gas.
Already, Israel is viewing the natural gas boom as a political watershed moment that could thaw tensions in the region as energy security takes over as top priority.
Leaders of Israel, Greece and Cyprus agreed Thursday to push forward with construction of a pipeline that would bring gas to Europe from offshore fields in the Mediterranean.
“A few months ago it was in the realm of fantasy,” Israeli Prime Minister Benjamin Netanyahu told reporters after a three-way summit in Thessaloniki, Greece. “Now it’s becoming real.”
The meeting brought Netanyahu together with Greek Prime Minister Alexis Tsipras and Cypriot President Nicos Anastasiades to sign a joint statement on strengthening economic cooperation. The centerpiece is the East-Med Pipeline, which would bring gas from Israeli fields to Greece and Italy through what would be the world’s longest undersea connection.
The Israeli push to connect the eastern Mediterranean through pipelines in a region grappling with longstanding conflicts is going to be hard to carry through, especially as world energy prices remain depressed. A second proposed pipeline, to Turkey, would have to go through Cyprus, which has been divided since a Turkish invasion of the north in 1974.
Israel has discovered two large offshore reservoirs holding an estimated 930 billion cubic meters of natural gas, more than enough to meet its own domestic needs for at least two decades. It is auctioning new fields this summer and is trying to find nearby export destinations to bring in billions of dollars in revenue while strengthening Israel’s geopolitical standing in the region. Israel already has signed an estimated $10 billion deal to export gas to Jordan, and Energy Minister Yuval Steinitz said talks continue to export gas to two idle liquefaction facilities in Egypt.
The partners in Leviathan, Israel’s largest offshore gas find, have started working on a $3.75 billion development plan to service the domestic contracts and the Jordanian market. The companies, led by Houston-based Noble Energy Inc. and Israel’s Delek Group Ltd., are planning to extract surplus gas for export to either Turkey or Egypt in a second phase of development.
The pipeline to Italy, which Steinitz says would be the world’s longest undersea pipeline, would be more technically complicated and expensive than the one to Turkey, and may require additional gas findings offshore Israel to make it commercially viable.