IENE observes that there is a growing realization that the newly discovered hydrocarbon deposits in the East Mediterranean can play a significant role in European gas supply. The prospect of an Eastern Mediterranean Energy Corridor (East Med) as an additional East – West energy corridor should therefore be given serious consideration, as it could prove to be of key strategic and economic importance not only for this region but to the EU as a whole.
According to IENE the realisation of this energy corridor depends on the development of a strong bilateral relationships and a close co-operation in the field of energy between Greece, the Republic of Cyprus and Israel. The signing of a three-partite inter government agreement between Greece, Cyprus and Israel is expected to firm up commitments for a joint energy strategy and to speed up the implementation of the necessary infrastructure.
The construction of a liquefaction facility on Cyprus that would process and export natural gas from Israel’s and Cyprus’s gas fields is currently being considered as a strategic energy priority by the Cypriot and Israeli governments. A liquefaction facility in Cyprus would also provide other regional gas producers ready access to the European energy market and thus encourage the further exploitation and production of Eastern Mediterranean gas fields.
The construction of a pipeline from Cyprus to Greece and from there to Italy, via the proposed Poseidon interconnector, which will transit natural gas from the fields in Israel and Cyprus, is being considered as available alternative option by the IENE study. Given the magnitude of the discovered gas deposits in the East Med region, notes IENE, a gas pipeline may be developed if necessary in parallel to the LNG export option. However, in view of a forecasted global LNG liquefaction production glut by 2020 the pipeline option could gain ground as a more realistic option and more in tune to European gas market requirements.
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