Because the EastMed pipeline is on a dead track. Report

Because the EastMed pipeline is on a dead track. Report

Greek Prime Minister Kyriakos Mitsotakis' visit to Jerusalem by colleague Benjamin Netanyahu and the report by the Israel Institute for Regional Foreign Policies on the EastMed gas pipeline mishaps

For his first visit abroad after the outbreak of the pandemic, Greek Prime Minister Kyriakos Mitsotakis chose to stop in Jerusalem with his colleague Benjamin Netanyahu.

Arriving in the Holy Land with a large delegation of ministers, Miktsotakis had a dense agenda of talks with his counterpart. As the Israeli Foreign Ministry announced on the eve of the meetings, they would focus on President Trump's "peace plan" on Palestine, "stability in the Middle East with an emphasis on Iran and Lebanon" and, last but not least, on "EastMed project".

On this last point, however, Gabriel Mitchell, Policy Fellow at the Israeli Institute for Regional Foreign Policies, is convinced that the conversations between Mitsotakis and Netanyahu have been somewhat dry.

In the long essay dedicated to Eastmed written for the magazine "War on the Rocks" on the occasion of the Israeli tour of the Greek premier, Mitchell summarized all the reasons why this pharaonic project on which various Mediterranean countries had pinned their hopes as well as Israel and Greece are both on a dead track.

The main factor in deciding EastMed's brain death was Covid-19 according to Mitchell. The impact of the pandemic on the energy market has been so violent, and the damage done to the exporting countries so large that the promoters of the project have been forced to rethink.

But more than the Covid-19, the estimated costs of the project, which have risen to 7 billion, have made the brake on the EastMed architects bite: all this for Mitchell has raised serious doubts on the profitability of the project itself and in particular on the possibility that the gas Israeli and Cypriot arrivals in Europe at a truly competitive price.

There are many and such doubts in Europe that Mitchell says he is convinced that one of the main sponsors of the project, namely the European Commission, is now about to pull the oars on the boat.

If EastMed doesn't do it, Israel will be the most bitter cry according to Mitchell. The Jewish state had placed many hopes after the discovery of the maxi Tamar and Leviathan deposits to become a powerful and wealthy exporter.

Animated by this belief, the Netanyahu government in recent years has conducted a real diplomatic marathon in the Mediterranean to form a consensus around the project, making agreements with countries such as Greece and Cyprus but also Jordan and Israel.

And his energy minister Yuval Steinitz, Mitchell points out, has spent the past five years magnifying the project.

In this sense, it seems very significant that, after the recent formation of the new Netanyahu cabinet, the reconfirmed Steinitz has no longer spoken the word EastMed and instead has praised his government's plans for solar energy.

In addition to Israel, those who cannot be happy with the latest developments are Greece and Cyprus.

In their capacity as essential partners of the project, Greece and Cyprus will be the last ones to raise the white flag, as demonstrated by the solemn ceremony last January dedicated to EastMed in which the respective prime ministers took part plus his colleague Netanyahu.

But the problems in those waters have been multiplying since Turkey began to put the wheels on the road with various territorial claims – culminating in the provocative delimitation of its own EEZ made with the Tripoli government – and a diplomacy of the gunboats it has Europe and NATO alarmed.

Attempts to bring Ankara back to milder advice are not lacking, but it is a fact that the Cyprus fields are not yet operational and in May Eni, Total and ExxonMobil announced to suspend drilling activities in Cypriot waters for a year.

In the list of EastMed problems Mitchell also puts the disagreements between Jordan and Egypt, linked in the project by an agreement that provides for the supply of 45 billion cubic meters to Amman for 15 years at a cost of 10 billion dollars.

Here the problems are basically two. The political ones, with the Jordanian people reluctant to make agreements with a state like the Jewish one with which there is known as an ancient rust. But the real knot is the economic one, that is the costs, which see the Jordanian government looking for alternatives to EastMed – read: LNG – which allow savings in the national energy bill.

Mitchell's review could not end without mentioning the last defeated since the sunset of EastMed: Egypt. We are talking about a country that, after the huge offshore discoveries of the past years, had convinced itself that it could become an important regional hub, and cultivated the ambition of being able to transform Israeli and Cypriot gas into LNG in its Idku and Damietta plants and from there export it to Europe.

With these dreams gone, Cairo is now having trouble finding buyers of its own energy, and has even found itself forced to cut production in its Zohr maxi deposit.

At the end of this review, Mitchell can only offer the most sober of conclusions: the future will be made up of more LNG and renewable energy and less ambitious but extremely expensive and politically difficult projects such as Eastmed.

"Although Covid-19, " Mitchell writes, "appears to have undermined the significant progress made in the Eastern Mediterranean, ironically it may also have saved the Mediterranean states from short-sighted investments."

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Thu, 18 Jun 2020 07:15:57 +0000.