Last week, the Minister of Energy of Cyprus, Mr. George Lakkotrypis, and the Minister of Petroleum and Mineral Resources of Egypt, Eng. Tarek El Molla, signed the first agreement which will allow the establishment of a pipeline, which shall link the Aphrodite gas reserve (4,5 tcf) of Cyprus to the Egyptian infrastructure, so that the Cypriot gas is liquefied in the LNG plants in Egypt and then be re-exported to Europe and Asia.
The signing of the agreement should be considered as a milestone for the Eastern Mediterranean. As readers may recall, only a very short time ago " Turkey and a number of European countries led an aggressive campaign to define the so called Eastern Mediterranean Energy Corridor
" , excluding Egypt from the broader picture and forcing Cyprus to accept arrangements against its own national interests. This was creating an environment of high political risk, even if reluctantly some actors would have to agree to it.
Two years since that narrative was so predominant in the discussions taking place in governments, regional bodies and private companies, the picture has changed dramatically. Not only has the attempt of Israel to achieve an " energy monopoly
" in the region failed, but a new more inclusive regional system is on the rise, on which Egypt has a leading role and Cyprus provides the most reliable partner.
Cyprus has acted indeed as a " blowout preventer
" and the “Hope Pipeline” vision can bring hope for regional stability and for minimizing the political risk from undesired but forced schemes of cooperation, as described in the articles cited here.
The cooperation of Cyprus and Egypt is a model of a regional cooperation that produces a win-win situation. The Cyprus gas, as well as the gas in the Egyptian EEZ, could be directed through connected pipelines (and thus on shared costs) to the existing LNG plants in Idku and Damietta, and from there to European mainland, to feed in the European system.
Beyond the enhancement of the bilateral relations between Cyprus and Egypt and the economic gains of the two countries, Hope pipeline can be both a cornerstone for stability in the East Mediterranean and a generous provider for the European energy security, through a real project of diversification of EU energy resources. This would allow EU and Egypt to readdress their relationship which has fallen short of its great potentials since 2013.
Moreover, Hope pipeline allows other players to engage, at a later stage, in this regional cooperation cycle. Should there are more gas discoveries Cyprus can get its own LNG plant and maximize the production, once Egypt will become again an energy exporter. Israel, Lebanon or even Syria and Iraq can provide some of their own gas into the production cycle for exporting LNG to Europe or Asia. Additionally, having in mind the central role of ENI in Egypt and Cyprus, Italy can become a major hub for receiving the EastMed gas and for providing energy solutions to central Europe.
All these issues will be addressed in the articles to follow. The present one should only be seen as an introduction to the matters which will be raised in the near future in a series of relevant articles. The series aims to highlight the potential gains of all actors in the region, through synergies and by minimizing the political risk, especially in an area with major political uncertainties. It will also highlight the dangers of antagonistic policies by regional actors and challenge the dominant narratives which encourage these aggressive policies.
Contributed to Gulfoilandgas.com by
The author is a Gulfoilandgas.com contributor. The opinions expressed are those of the writer.