Israel, Greece and Cyprus have signed an agreement for a pipeline project to ship natural gas from the Eastern Mediterranean region to Europe. The deal comes amid increasing tensions with Turkey as Ankara seeks to expand its claims over gas-rich areas of the Mediterranean Sea.
Israeli Prime Minister Benjamin Netanyahu, his Greek counterpart Kyriakos Mitsotakis and Cypriot President Nicos Anastasiades, along with their energy ministers, signed the so-called EastMed pipeline deal in Athens on January 2.
The 6-billion-euro ($6.6 billion) project envisages the construction of a 1,900-kilometer (1,180-mile) undersea pipeline that would carry up to 20 billion cubic meters of gas a year from Israeli and Cypriot waters to Crete and then on to the Greek mainland. From there, the gas would be transported to Italy and other countries in southeastern Europe.
Israel, Greece and Cyprus hope to reach a final investment decision by 2022 and have the pipeline completed by 2025. The EastMed project, which would bypass Turkey, could eventually supply up to 10% of Europe's natural gas needs.
The signing of the EastMed pipeline project came a month after Turkey and Libya reached a bilateral agreement on maritime boundaries in the southeastern Mediterranean Sea. The deal, signed on November 27 by Turkish President Recep Tayyip Erdoğan and the UN-backed leader of Libya, Fayez al Sarraj, attempts to redraw existing sea boundaries so that Libya ostensibly can claim exclusive rights over 39,000 square kilometers of maritime waters that belong to Greece.
The bilateral agreement — which establishes a new Turkey-Libya economic zone that the EastMed pipeline would now have to cross — appears aimed at giving Turkey more leverage over the project. Referring to the Turkey-Libya deal, Erdoğan said:
"Other international actors cannot conduct exploration activities in the areas marked in the Turkish-Libyan memorandum. Greek Cypriots, Egypt, Greece and Israel cannot establish a natural gas transmission line without Turkey's consent."
In mid-December, the Turkish Foreign Ministry reportedly summoned Israel's top diplomat in Ankara to inform him that Israel's plan to lay down a natural gas pipeline to Europe would require Turkey's approval.
Turkish Foreign Ministry spokesman Hami Aksoy said there was no need to build the EastMed pipeline because the Trans-Anatolian Natural Gas Pipeline already exists. "The most economical and secure route to utilize the natural resources in the eastern Mediterranean and deliver them to consumption markets in Europe, including our country, is Turkey," he said in a statement.
The European Union dismissed the Turkey-Libya deal was inconsistent with international law. In a statement issued on January 8, the President of the European Council, Charles Michel, said:
"The recent Turkey-Libya Memorandum of Understanding on the delimitation of maritime jurisdictions in the Mediterranean Sea infringes upon the sovereign rights of third States and does not comply with the Law of the Sea and cannot produce any legal consequences for third States."
Egypt condemned the Turkey-Libya deal as "illegal and not binding or affecting the interests and the rights of any third parties."
Greek Foreign Minister Nikos Dendias noted:
"Any maritime accord between Libya and Turkey ignores something that is blatantly obvious, which is that between those two countries there is the large geographical land mass of Crete. Consequently, such an attempt borders on the absurd."
On December 11, Turkish Foreign Minister Mevlut Çavuşoğlu hinted that Ankara could use its military to prevent gas drilling in waters off Cyprus that it claims as its own. "No one can do this kind of work without our permission," he said in an interview with the newspaper Habertürk. "We will, of course, prevent any unauthorized work."
Cyprus has been divided since 1974, when Turkey invaded and occupied the northern third of the island. Turkey, which does not have diplomatic relations with the southern Republic of Cyprus, an EU member, claims that more than 40% Cyprus's offshore maritime zone, known as the Exclusive Economic Zone (EEZ), is located on Turkey's continental shelf and therefore belongs to Ankara or to Turkish Cypriots.
Cyprus is perched on the maritime edge of several large gas finds in the Levant Basin, including Leviathan off Israel and Zohr off Egypt. In the past, Turkey has used military force to obstruct progress on drilling activities waters it claims as its own.
In December 2019, for instance, the Turkish navy intercepted an Israeli ship in Cypriot waters and forced it to move out of the area. The ship, Bat Galim, of the Israeli Oceanographic and Limnological Research Institution, was conducting research in Cyprus's territorial waters in coordination with Cypriot officials, according to Israel's Ministry of National Infrastructure, Energy and Water.
In February 2018, two weeks after the Italian energy giant Eni announced that it had found "a promising gas discovery" in Cyprus's EEZ, Turkish military ships stopped a ship hired by Eni to drill for gas off the Cyprus coast.
In October 2018, the Turkish navy interdicted a Greek frigate that was monitoring the Turkish seismic vessel "Barbaros Hayreddin Pasa," which Greek authorities said was operating in waters claimed by Cyprus. A few days later, Turkish Energy Minister Fatih Dönmez announced that the drilling ship "Fatih" would begin drilling for oil and gas off the coast of Cyprus.
In May 2019, Turkey announced that it would begin drilling for gas in waters claimed by Cyprus. "The legitimate rights of Turkey and the Northern Cypriot Turks over energy resources in the eastern Mediterranean are not open for argument," Erdoğan said. "Our country is determined to defend its rights and those of Cypriot Turks," he added.
The United States subsequently warned Turkey against offshore drilling operations in waters claimed by the Republic of Cyprus. "This step is highly provocative and risks raising tensions in the region," said State Department spokesperson Morgan Ortagus. "We urge Turkish authorities to halt these operations and encourage all parties to act with restraint."
In July 2019, EU foreign ministers formally linked progress on Turkish-EU accession talks to Cyprus. A measure adopted by the European Council on July 15 stated:
"The Council deplores that, despite the European Union's repeated calls to cease its illegal activities in the Eastern Mediterranean, Turkey continued its drilling operations west of Cyprus and launched a second drilling operation northeast of Cyprus within Cypriot territorial waters. The Council reiterates the serious immediate negative impact that such illegal actions have across the range of EU-Turkey relations. The Council calls again on Turkey to refrain from such actions, act in a spirit of good neighborliness and respect the sovereignty and sovereign rights of Cyprus in accordance with international law....
"In light of Turkey's continued and new illegal drilling activities, the Council decides to suspend ... further meetings of the EU-Turkey high-level dialogues for the time being. The Council endorses the Commission's proposal to reduce the pre-accession assistance to Turkey for 2020."
In October 2019, Turkey defied the European Union by sending another drilling ship, the Yavuz, to operate inside waters claimed by Cyprus. Cyprus accused Turkey of a "severe escalation" of violations of its sovereign rights. Eni CEO Claudio Descalzi subsequently said that his company will not drill wells off the coast of Cyprus if Turkey sends warships to the area: "If someone shows up with warships I won't drill wells. I certainly don't want to provoke a war over drilling wells."
On November 11, European Union foreign ministers agreed to a package of economic sanctions over Turkey's drilling off the coast of Cyprus. In a statement, the Council of the EU said:
"The framework will make it possible to sanction individuals or entities responsible for or involved in unauthorized drilling activities of hydrocarbons in the Eastern Mediterranean.
"The sanctions will consist of a travel ban to the EU and an asset freeze for persons, and an asset freeze for entities. In addition, EU persons and entities will be forbidden from making funds available to those listed."
On November 15, Turkish authorities again defied the EU by announcing that the Turkish oil-and-gas drilling ship Fatih had started operating off the coast of northeastern Cyprus.
Despite the tensions with Turkey, supporters of the EastMed pipeline project remain upbeat. At the project's signing ceremony in Athens, Prime Minister Netanyahu said:
"This is a historic day for Israel, because Israel is rapidly becoming an energy superpower, a country that exports energy.
"This is a tremendous change. Israel was always a 'fringe' country, a country that did not have any connections, literally and figuratively. Now, in addition to our foreign relations, which are flourishing beyond all imagination and everything we have known, we have a specific alliance towards these important goals in the Eastern Mediterranean.
"This is a true alliance in the Eastern Mediterranean that is economic and political, and it adds to the security and stability of the region. Again, not against anyone, but rather for the values and to the benefit of our citizens."
Greek Prime Minister Mitsotakis said that the pipeline was of "geostrategic importance" and would contribute to regional peace. Greek Energy Minister Kostis Hatzidakis called it "a project of peace and cooperation" despite "Turkish threats." Cypriot President Anastasiades said that his aim was "cooperation and not rivalry in the Middle East."
Meanwhile, Israel's $3.6 billion offshore Leviathan field, the largest natural gas field in the Eastern Mediterranean, commenced production on December 31, 2019, paving the way for multi-billion-dollar gas export deals with Egypt and Jordan.
Natural gas from the Leviathan field began flowing to Jordan on January 2, 2020, in accordance with a $10 billion deal signed in 2016. Egypt will begin importing Israeli gas by the middle of January.
The amount of gas extracted from Leviathan, located 130 kilometers west of the port city of Haifa, is expected to reach 105 billion cubic meters (bcm) over 15 years, while the nearby Tamar field will export nearly 30 bcm in the same period. The value of the exports is estimated at $19.5 billion, with $14 billion coming from Leviathan and $5.5 billion from Tamar.
"For the first time since its establishment, Israel is now an energy powerhouse, able to supply all its energy needs and gaining energy independence," said Yossi Abu, the CEO of Israel's Delek Drilling, one of the partners in the Leviathan project. "At the same time, we will be exporting natural gas to Israel's neighbors, thus strengthening Israel's position in the region."
The President of the Texas-based Noble Energy, Brent Smolik, summed it up this way: "We think it's a huge day for Israel and the region."