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Wednesday, 15 June 2022

Europe knocked. We answered.

Egypt, Israel and the EU could sign an agreement to increase gas export across the Mediterranean in Cairo today. EU Commission President Ursula von der Leyen and Israeli energy minister Karine Elharrar will be in the capital today to seal the agreement, which is expected to pave the way for more Israeli gas to be exported to Europe via Egypt’s LNG facilities. “Tomorrow we’ll take an important step, with the signing of a trilateral agreement on gas between Israel, the EU and Egypt,” von der Leyen wrote on Twitter yesterday following a meeting with Israeli PM Naftali Bennett.

Expect to hear more details later today: Draft documents picked up by the press have suggested that the EU could help finance new energy infrastructure ⁠— which would come in handy as the government solicits funds for new LNG terminals ⁠— and work with Egypt and Israel to curb methane gas emissions.

The signing will coincide with a meeting of the East Mediterranean Gas Forum (EMGF), which will bring together officials from the eight founding countries, as well as observers the EU, the US and the World Bank.

This is precisely what we had been banking on as far as our regional gas hub ambitions go: Since its inception, the EMGF has been a key foreign policy initiative of Cairo — where the forum is headquartered — that would see us be the LNG export hub for the region’s gas reserves. Apart from Israel, Egypt has agreements with Cyprus and Greece on pipelines that would see their gas sent to our facilities for re-export.

Israel has ambitions to become a regional gas hub of its own: The EU is continuing to study the planned EastMed pipeline, which would ship 10 bn cubic meters of Israeli gas a year from the Mediterranean straight to Greece, von der Leyen said yesterday.

Gazprom reminded us yesterday of why the EU is so keen for EastMed gas: The Russian gas giant — which provides around 40% of Europe’s consumption — curbed supplies through the major Nord Stream 1 pipeline by 40% yesterday, blaming Siemens for malfunctions at its Baltic station. Russia has already cut off gas supplies to the Netherlands, Denmark, Poland and Bulgaria for failing to pay in RUB, threatening to intensify Europe’s energy crisis at a time when it is trying to reduce its reliance on Russian hydrocarbons.

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