Decreased Importance of the Eastern Mediterranean Pipeline and New Assessments

Changes in the Eastern Mediterranean Basin:

The most important issue that should be taken into consideration by the studies on the Eastern Mediterranean is that everything is changing very quickly in this region. I tried to draw attention to this rapid change in all three books I wrote about the Mediterranean.

Change is the main characteristic of the Mediterranean and it both affects developments in other parts of the world and is immediately affected by the mobility there.

A very careful look at the picture in the Eastern Mediterranean today reveals that the energy geopolitics and the energy players in the region are very different from last year.

A year ago, the money allocated by the EU for the feasibility studies of the East-Med Pipeline and the natural gas forum meetings held between Egypt, Greece, Israel and Southern Cyprus on this issue were at the top of the agenda.

A contract was signed in Athens on January 2, 2020, with the participation of Israel, Greece and the Greek Cypriot Administration, for the line, which is expected to cost 10 billion Euros in total. On 19 July 2020, the Israeli government approved the project. The project, which excluded Turkey, was almost ready for implementation. At the beginning of this year, this project, which has been planned for many years, collapsed after the USA announced that this pipeline was not economical and withdrew its support. In fact, this development was not a surprise for those who knew the USA's calculations of being a net exporter of oil and natural gas in 2023.

The US Congress had its first report prepared about 7 years ago in order to reduce the EU's dependence on Russian Gas. These plans were drawn up and conditions were awaited to mature.

Russia's war on Ukraine also played a role in skyrocketing energy prices to record levels around the world. This situation suited the plans of the USA, which wanted to become a net exporter. It also provided the most suitable environment for the EU to reduce its dependence on Russia. The invasion of Ukraine forced the EU to decide to cut Russian gas by two-thirds by the end of this year. The USA, which has been preparing for this issue for many years, played the most effective role in this.

Eastern Mediterranean Natural Gas Reserve and EU's New Energy Supply Policy

Let's first look at the economic natural gas reserves of the Eastern Mediterranean, which is constantly differentiating with the studies carried out. In its report published in 2020, the USGS, the most respected institution in the world, declared the amount of natural gas still undiscovered as 286 trillion feet 3 . This means approximately 8.5 trillion m3 of natural gas. However, some sources claim that this amount is 3.5 trillion m3.

In terms of transmission line economy and line security, the main customer potential of energy resources in the Eastern Mediterranean is the countries that have a coast here. EU countries naturally follow this. The capacity of the project, which will be transmitted to the EU via the East-Med Pipeline, was 15 billion m3 per year.

The European Commission has outlined a new energy roadmap designed to reduce the European Union's (EU) dependency on Russian gas by two-thirds in just one year. The plan envisions ending all dependence on Russian fossil fuels "well before" 2030. The EU also proposes a massive increase in the use of renewable energy sources, biogas and hydrogen.

LNG Activities of the USA:

Meanwhile, the EU; Signed a new LNG (liquefied natural gas) agreement with the USA. Natural gas, which is compressed at -163 degrees and liquefied by reducing its volume 600 times, is transported by ships, converted into natural gas at the regasification facilities in the ports and pumped into the network. Under the agreement, the US will sell at least 15 billion cubic meters of liquefied natural gas to the EU by the end of this year, in addition to previous agreements. Thus, while increasing its own LNG exports to the EU, it will also carry out this task by zeroing Russia's share in the EU's LNG market. In this case, the United States will gain in any case.

USA; It entered the EU's LNG market in 2017 and has rapidly increased its market share since 2019.

There are currently 23 large LNG terminals in the EU, including the UK. However, many EU countries used only one third of the capacity at LNG terminals between 2012 and 2020. This means that these countries are ready to increase their LNG imports. In addition, the number of LNG terminals in the EU can be increased rapidly with the support of the USA.

In 2020, 216 billion cubic meters of natural gas, 40% of the total annual natural gas needs of EU countries, was supplied from Russia. 22% of the gas was imported from Norway, and 18% from Algeria and Libya. 22% of the total gas came as LNG.

Developments show that the Russia-Ukraine war will/will be prolonged. In this case, the EU's decision to reduce its Energy Dependency on Russia will be implemented definitively. Within the solution of the EU Commission, there is a multi-faceted plan such as increasing LNG supply from the USA, increasing production by Norway, increasing imports from Algeria and Libya, developing renewable resources and energy efficiency. Here again the USA is at play. The White House says more energy savings can be achieved with smart thermostats (heating systems) and heat pump technology. The EU, on the other hand, thinks that 15.5 billion cubic meters of energy can be saved this year with the development of energy saving methods in houses, and that 20 billion cubic meters of natural gas can be replaced by renewable energy with the increase in the use of wind and solar energy.

The EU's Tough Goal and the Orientation to LNG

The EU's goal is to use 170 billion cubic meters of natural gas less than today, through energy savings and the use of renewable energy, by 2030. When these 170 billion cubic meters are combined with 50 billion cubic meters of natural gas to be purchased from the USA, it is hoped that energy dependence on Russia will come to an end by 2030.

If the Eastern Mediterranean's natural gas transmission line to the EU was ready, the gas to be procured from here would work just in time and perhaps by increasing the capacity. Now, for an emergency solution, booster gas can be supplied from the facility in Egypt by LNG ships. Since Israel is also involved in this project, Israeli Gas somehow reaches the EU. If a gas supply system is established to the EU with LNG Ships, this system can be developed rapidly.

In addition, the ships known as FSRU (Floating LNG Storage and Gasification Unit) provide great opportunity for the development of this system. These vessels provide LNG storage, gasification of the stored LNG and transmission to the main transmission line with high pressure with the warehouses located within the ships. There are also three in Turkey.

According to the news of Die Welt newspaper dated April 26, 2022, Germany also took action for LNG. A floating LNG terminal with an annual capacity of 5 billion m3 will be commissioned in Germany at the beginning of 2023. In another news that was reflected in the press these days, it was stated that Germany leased 3 floating LNG terminals and is considering leasing the fourth floating LNG terminal in order to increase its LNG imports. It is mentioned that the German Ministry of Finance will spend 3 billion euros for 4 LNG terminals in the next 10 years and that these terminals will be operational in the winter of 2022-2023.

These developments in the field of LNG in the EU reduce the weight of the discredited East-Med pipeline as an alternative for the EU and increase the possibility that the gas of the Eastern Mediterranean will reach the EU mostly as LNG in the near future.

New Gas Politics in the Middle-East Mediterranean

The ever-moving history of the Mediterranean continues today with the same mobility. The most important reason for this is the ever-increasing geopolitical importance of the Mediterranean throughout history. The natural gas and oil resources in the Eastern Mediterranean have added energy politics to this geopolitical importance.

In recent years, rapid changes have taken place in this field as well. East-Med, which will be the axis of the gas policy of the Eastern Mediterranean. New alternatives are being produced instead of pipelines. While it is the most economical solution for the new line to pass through Turkey, this alternative has not been able to cross the political thresholds of international relations in the region until today. These thresholds have not completely disappeared today. In the Eastern Mediterranean, there is a very critical security balance with radical and volatile international relations. If the pipeline is to be built, it will still pass through Turkey, but the marginal benefits of this solution for Turkey are decreasing compared to the past.

Gas politics of the Eastern Mediterranean has been stuck in the US's plan to save the EU from Russian domination with the Shale Gas and LNG exports made decades ago, and its energy politics.

The Eastern Mediterranean is also the coast of the Arabian peninsula of the Middle East. For this reason, the fate of the Eastern Mediterranean has been united with the Middle East as a result of recent developments in Iraq and Syria. This has increased the mobility and uncertainties in the Eastern Mediterranean. The Eastern Mediterranean is a geography on which new calculations are constantly made today, as it was yesterday. For this reason, strategic projections for this region should take into account local, regional and global developments, many regional variables and the possibility of their rapid change.

The spirit of time is a very influential factor in the Eastern Mediterranean. In this region, it is always wrong to be late in taking action on time, but it is difficult to say that countries that act early always win. Diplomacy in the Eastern Mediterranean has its own golden rules. Winning in the Eastern Mediterranean starts with protecting your vested rights first.