This report represents the research and views of the author. It does not necessarily represent the views of the Center on Global Energy Policy. The piece may be subject to further revision. Contributions to SIPA for the benefit of CGEP are general use gifts, which gives the Center discretion in how it allocates these funds. More information is available at Our Partners. Rare cases of sponsored projects are clearly indicated. For a full list of financial supporters of the Center on Global Energy Policy at Columbia University SIPA, please visit our website at Our Partners. See below a list of members that are currently in CGEP’s Visionary Annual Circle.
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CGEP’s Visionary Annual Circle
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(This list is updated periodically)
Air Products
Anonymous
Jay Bernstein
Breakthrough Energy LLC
Children’s Investment Fund Foundation (CIFF)
Occidental Petroleum Corporation
Ray Rothrock
Kimberly and Scott Sheffield
Tellurian Inc.
Executive Summary
The Russian invasion of Ukraine in February 2022 precipitated a global energy crisis with Europe as its epicenter. The war compelled Europe to endeavor to end its long-standing dependence on Russian natural gas, a goal that required diversification of supply. This process has proven challenging, however. Compared with oil, which is relatively fungible, gas is difficult to redirect due to high capital costs and long lead times for pipelines and liquefaction plants.
Amid this crisis, one region that has emerged as a promising new gas source for Europe is the Eastern Mediterranean, particularly Israel, Egypt, and Cyprus. Since 1999, exploration in deepwater basins in these three countries has resulted in the discovery of approximately 2,400 billion cubic meters (Bcm), or 80 trillion cubic feet (Tcf), of gas resources. Moreover, exploration is ongoing and new discoveries are possible, meaning that even greater volumes of gas could be available in the future.
This report, part of the work by the Center on Global Energy Policy, Columbia University SIPA, on oil and gas and the energy transition, focuses on the aforementioned three countries’ prospects of supplying gas to Europe from a technical, geopolitical, and economic perspective. Drawing on company, government, and press sources, the report finds that such gas can meaningfully contribute to European energy security, though mainly in the medium term and only given the involvement of external players—likely the US and/or the EU—and with buy-in from Eastern Mediterranean countries, which will need to see an upside in terms of their own energy security and energy transition.
Additional takeaways of the report are as follows:
- In the short term, existing Egyptian liquefied natural gas (LNG) export plants could make the greatest contribution, which can be maximized by measures to boost Egypt’s energy efficiency and renewable capacity.
- In the medium term, and on an aggressive timeline for field development, the Eastern Mediterranean could have a surplus of approximately 50 Bcm/y of gas production by the early 2030s. Even more could be available if significantly more gas is discovered in Cyprus, Israel, Egypt, or elsewhere in the region and if demand growth in Egypt can be contained.
- How much of this surplus could be available to Europe remains to be determined. Eastern Mediterranean countries, especially Egypt, have strong domestic demand that governments in the region will prioritize. By contrast, the companies that own or operate the gas fields will be eager to take advantage of profitable export options, especially though not exclusively in Europe. Doing so will depend on their ability to establish appropriate arrangements with regional governments as well as Egypt’s ability to raise domestic prices and thereby attract pipeline imports.
- Any plan to supply Europe with this gas will need to contend with the Eastern Mediterranean’s complex politics. Regional rivalries and conflicts make constructing new pipeline connections with Europe challenging, especially in combination with Europe’s reluctance to commit to any new long-term fossil fuel infrastructure. In meeting European demand, companies with Eastern Mediterranean gas resources are therefore likely to prioritize LNG options, including using existing LNG terminals in Egypt and constructing new (floating) LNG plants in Israel and/or Cyprus.
