Greece, Israel and Cyprus signed an agreement to build the pipeline in January. But “on the other hand, Turkey and the Libyan Government of National Accord in November last year signed a memorandum on military cooperation and on understanding regarding the offshore zones that virtually draw a vertical line through the Mediterranean Sea, undermining plans by Greece, Israel and Cyprus to prospect for oil and gas in the zone,” said Pavel Korolev, Vice President of the Global Energy Association. The gas pipeline might be routed between Cyprus and Greece, but Turkey says in the memorandum that this is its territory.
Nikolai Surkov, a senior fellow at the IMEMO Center for Middle Eastern Studies, said the pipeline was “unlikely, both politically and especially economically.”
Gas prices are plummeting, “and they face losses from the point of view of the cost of producing gas in the region and exporting it to Europe,” Surkov said. “Economists agree that it would be simply unprofitable to export gas from the East Mediterranean to Europe at current lifting costs,” he said.
“From the political point of view, Cyprus has an obsession with this project. They would very much like to connect themselves to Greece somehow, to once again demonstrate their own significance, to make other countries get involved in solving the North Cyprus problem. But it is absolutely unclear who will put up the money for that. Another aspect is that the agreement between Libya and Turkey effectively blocks the pipeline’s construction. But if there’s the political will then it will always be possible to come to terms. I have a feeling that the Turks see this pipeline as a reason for bargaining: they might reach agreement with Cyprus to build the pipeline in return for concessions of some sort, for example on North Cyprus, because it is very important for Erdogan to guarantee Turkey’s right to drill on the North Cyprus shelf. Alternatively, this could turn into potentially a very serious conflict,” the expert said.
Alexander Aksenyonok, Vice President of the Russian International Affairs Council and Ambassador Extraordinary and Plenipotentiary, said the initiative was still at an early stage. “It is too soon to evaluate the prospects. This agreement between Greece, Israel and Cyprus is so far a framework agreement, more a memorandum of understanding which the European Union as a potential source of funding is already picking up on,” he said.
Vasily Kuznetsov, leading research fellow at the IMEMO Center for Middle Eastern Studies, questioned the strength of the agreement signed by Ankara.
“The agreement between Turkey and the Libyan Government of National Accord is significant but should not be over-estimated because the House of Representatives, Libya’s internationally recognized legislature, has not yet ratified it. Moreover the interim government of East Libya is in talks to sign a similar agreement with Greece. So here the legal aspect of the Libyan-Turkish agreements can easily be revised if the political situation inside Libya changes,” Kuznetsov said.
The European Union assigned Project of Common Interest or PCI status to the EastMed project at the end of 2015 and has already paid 2 million euros for a feasibility study. It is expected Brussels will decide not later than 2020 whether the EU will take on half the project’s overall cost, currently an estimated 7 billion euros. Greece’s DEPA and Italy’s Edison would undertake the remainder of the funding via the IGI Poseidon joint venture.
The EastMed pipeline would be around 2,000 kilometers long with the capacity to 12 billion cubic meters of gas per year. It would be launched in 2025-2026.
Source: interfax.com
