Eastern Med Transport Options Have to Overcome Region’s Political Tension

infrastrutture-gas-itgi

 

Transport options for the Eastern Mediterranean’s gas discoveries are taking on a familiar political tone as Turkey, Cyprus and Greece stake out European market options.

The current debate centers around how those firms active in the Tamar, Leviathan and Block 12 gas fields, situated in the waters between Israel, Cyprus and Lebanon, will be able to export gas to the European market. Any solution would help Europe reach resource diversification goals by opening up access to some of the largest gas finds in the last decade. However, just as political tension between regional actors have led to overlapping claims to the reserves, transmission solutions have run up against long-standing animosity.

For their part, Israel has pressed for downstream and transmission infrastructure to be built outside their own borders for both security and environmental reasons. This approach has made their partnership with Cyprus all the more important to export options. This has also made the possibility of an export line through Turkey all the more complicated.

Turkey has recently expressed their interest in expanding their regional energy role, with Ambassador Mithat Rende, Director General for Multilateral Economic Affairs at Turkey’s Ministry of Foreign Affairs telling the recent Energy and Economic Summit, “Construction of a pipeline to Turkey is the best way to export Israeli gas, both in terms of economics and in terms of energy.” However, this spirit of outreach does not extend to any collaboration with Cyprus. Turkey recently stated that they would boycott those companies that partnered with Cyprus for similar regional exploration efforts.

What Turkey may be pushing for is a re-purposing of the dormant ITGI (Interconnector Turkey-Greece-Italy) pipeline. After bidding to take on Caspian gas to the European market, the ITGI was shelved amid fears that Greece stakeholders would not be able to financially support it. However, the project’s director of international activities, Dimitris Manolis, told Reuters that he could see the project re-purposed for the Eastern Mediterranean gas finds, offering a link through Greece and Italy by 2018 or 2019. The ITGI would be an upgrade and extension of existing pipelines, estimated to cost $1.6 billion.

A Liquefied Natural Gas solution to the export question received a boost this week with the announcement that Australia’s Woodside had taken on a 30 percent interest in Leviathan gas field, taking on any LNG efforts on the project. Texas-based Noble Gas will be the upstream operator for the effort.

Image: Edison.com

Originally Posted: Newsbase’s Euroil Monitor

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