Cyprus and Israel Pledge Long Term Energy Cooperation
A delegation headed by President Nicos Anastasiades visited Israel last week to meet with Israeli Prime Minister Benjamin Netanyahu and high ranking officials from the Israeli government. Ministers of energy of Cyprus and Israel, Yiorgos Lakkotrypis and Yuval Steinitz initiated a dialogue for the purpose of reinforcing energy ties between the two Eastern Mediterranean countries. The two ministers discussed the importance of concluding a unitization agreement on the joint exploitation of cross-border gas reserves and the plan to sell gas-powered electricity from Israel to Europe via Cyprus and Greece.
Cyprus and Israel have made significant discoveries off their shores and are engaged in talks to export gas to their immediate neighbours. The two countries share the same aspiration to sell natural gas to energy-thirsty Egypt undergoing a severe energy crisis and in desperate need for cheap natural gas. Lakkotrypis and Steinitz discussed the possibility of merging pipelines from Israel and Cyprus to deliver gas to Egypt. The Cypriots turned to their Israeli neighbors in the past to propose the construction of a joint LNG facility on the Vassilikos coast of the island, a proposition rejected by Israel at the time. Since then, Cyprus has moved away from its original plan to build an LNG facility for not having encountered sufficient amounts of natural gas to justify to commercial viability of the multi-billion dollar endeavour.
The two sides were in favour of increasing cooperation in the field of energy as they discussed ways of optimizing their natural gas resources in a climate described as very favorable to constructive dialogue. The Cypriots and Israeli delegations also examined the EurAsia Interconnector that would connect the electricity grids of Israel, Cyprus and Greece to sell gas-powered electricity to Europe via submarine cable.
In Israel, the pending dispute between the partners in the Leviathan and Tamar fields, and the Antitrust Authority is threatening to endanger regional gas deals, with Egypt and Jordan. An agreement with the companies controlling Israel’s largest gas fields will be presented by the regulators to the cabinet next week as reported in Israeli financial daily Globes. The approval of the proposal will be key in ensuring the timely development of the Leviathan and Israel’s timely entry into the regional market.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat