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Sunday, 11 March 2018

EastMed gas disputes could play into Egypt’s favor where European exports are concerned

Disputes over natural gas reserves in the Eastern Mediterranean could play into Egypt’s favor where exports to Europe are concerned, Yigal Chazan suggests in a piece for the Financial Times (paywall). The competition between Mediterranean neighbors over natural gas could “complicate plans to build pipelines linking producer countries to consumer markets,” he says, arguing that Egypt’s idle liquefaction plants “could offer Cyprus and Israel a cost-effective and secure distribution route to Asia, through the Suez Canal, and Europe.” Egypt’s Dolphinus Holdings has already inked an agreement that will see Egypt receive USD 15 bn-worth of Israeli gas. Cyprus is on its way to singing a similar-style pact with Cairo, which is gearing up to sign an agreement with the EU before mid-2018 that will see it export LNG through its liquefaction plants.

This comes as the Turkish enclave of Cyprus threatened to throw fuel to the fire. Turkish Cyprus’ Foreign Minister Kudret Ozersay said that they would launch their own exploration efforts if the internationally recognized Cyprus government doesn’t sit down for negotiations, Reuters reports.

On a related note, Egypt will soon be at liberty “to fish for the next giant cache to satisfy its growing domestic appetite” for LNG, with Eni close to finalizing work on Zohr and BP wrapping up its activities in Atoll and the Giza and Fayoum concessions, says Upstream Online.

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