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What’s next for the natural gas of the Eastern Mediterranean?

By Gina Cohen


The Biden-Administration is contemplating its own strategy for energy markets and how best to maneuver during a time of geopolitical uncertainty. Over the last several years, it has been vacillating between demanding that energy companies be more involved in the energy transformation, then flipping to blame them for lack of investment in upstream oil and gas, which has resulted in record prices. 

While Biden had initially accused Saudi Arabia of being a pariah state, in July 2022 he visited the Kingdom to request an increase in oil supplies for global markets. Prior to his arrival, Saudi Arabia announced that it would grant overflight rights to all carriers as part of a gesture towards Israel. 

In a statement at the time, President Joe Biden said: “Today, I will be the first president of the United States to fly from Israel to Jeddah, Saudi Arabia. As we mark this important moment, Saudi Arabia’s decision can help build momentum toward Israel’s further integration into the region, including with Saudi Arabia.”

Biden, however,  failed to secure a Saudi commitment towards increasing its energy production despite his diplomatic overture towards Crown Prince Muhammad bin Salman who is the country’s de-facto ruler. 

The following month, the Biden-Administration passed its Inflation Reduction Act (IRA), which inter-alia will provide $369 billion in subsidies for companies that will invest in U.S. energy sources, but this in turn pitted the European Union against Washington. While the EU has for a long time requested that the more active on climate policy, the IRA triggered strong competition issues for European businesses as it could make European energy technology less competitive.

President Joe Biden was unable to secure a Saudi commitment to increase energy production. Photo credit: The White House 

In the meantime, Israel has over the past three/four years provided a paradigm shift when it comes to energy security and stability.

Indeed, 1,000 billion cubic meters (bcm) of natural gas has been discovered offshore Israel, with near-by Cyprus having discovered around 300-400 bcm of its own reserves. 

Egypt too has substantial volumes of gas, most of which (but not all) are earmarked for its population of 105 million people. In 2022, Israel consumed just under 13 bcm of gas, Egypt 60 bcm and Cyprus which has not yet developed any of its reserves is awaiting to import LNG from abroad within a year to start consumption (at a rate of about 1 bcm a year).

What is interesting to note is that both in Egypt, but especially in Israel, natural gas prices have been stable. In Israel, the price of gas to generate power and to large industrial premises range between $4-$5 MMBtu and supplies flow in an uninterrupted manner from the offshore deep-sea reservoirs to the country’s shores. 

Additionally, Israel has been supplying all of Jordan’s gas needs and the gap in demand above production to Egypt for its own needs, and/or for export via Egypt’s liquefaction export facilities.  

The next step, which the entire Eastern Mediterranean region has been working towards as a possible gas supplier, together with the EU and other countries (e.g. Turkey) as potential buyers, is to move ahead with another phase of offshore development of more natural gas (from the same Leviathan and Tamar offshore Israeli fields) towards a dedicated export project.

Israel has over the past three/four years provided a paradigm shift when it comes to energy security and stability

Regional diplomacy

There are several  options to export gas from the Eastern Mediterranean:

In the immediate term, LNG via Egypt is feasible for volumes of between 5-10 Bcm/year depending on ullage at the Egyptian facilities, and based on the existing transmission capacity in the Israeli and Egyptian pipelines, as well as the interconnections between the two countries. 

In the mid-to-longer-term, exporting larger volumes of LNG via Egypt would require a new offshore route to pipe Israeli and Cypriot gas to one or both of Egypt’s LNG facilities and upgrading of the liquefaction facilities in Egypt. 

This could probably be done in the shortest time span and with the lowest capital expenditure, compared with other export scenarios. This would boost the strategic partnership between Israel and Egypt, which rests primarily on security and gas cooperation. 

Robust support by Egyptian President Abdel Fattah el-Sisi to ensure that Cairo becomes an energy hub will be paramount for promoting the Egyptian LNG option for regional gas. A potential threat to this endeavor would be tied to the continued risk of a further deterioration of the Egyptian economy, and other pertinent impediments of relying on a third country’s export facilities.

The East Med Poseidon project, which is being promoted by IGI Poseidon, is a joint venture between Italy’s Edison (EDF group) and Greece’s Depa. This would require the construction of an approximately 2,000 kilometer pipeline system, mostly offshore, but also partially onshore, up to a final entry point in south-eastern Italy. 

This is probably the furthest advanced project in terms of feasibility studies and has received EU support, including about €35 million in funding for the study. The companies involved intend to make a decision on whether and how to proceed by the end of 2023.

In April 2022, Greek Foreign Minister Nikos Dendias hosted a trilateral meeting for his Israeli and Cypriot counterparts Yair Lapid and Ioannis Kasoulides, respectively. 

Greek Foreign Minister Nikos Dendias, center, hosts Israeli and Cypriot counterparts in Athens. Photo credit: Asi Efrati, GPO
Pipeline to Turkey 

A pipeline to Turkey is certainly the shortest direct route to Europe, but over a decade of acrimony between Turkey and Israel requires that a substantial diplomatic change must take place and robust guarantees need to be provided in order to move ahead  despite President Recep Tayyip Erdogan’s rekindled interest in Israeli gas. 

This option is potentially the most difficult one politically, not only for Israel, but also for Cyprus and Greece, as well as Europe more broadly, which would have to agree on replacing reliance on Russia with greater reliance on Turkey as a gas transit. 

The project is still an interesting one that can benefit from Turkey’s interconnection via the Trans-Anatolian natural gas pipeline and Trans-Adriatic pipeline into Eastern and Central Europe.

Gina Cohen. Photo credit: Courtesy 

An Israeli floating LNG (FLNG) facility is an option that has gained traction over recent months, and one for which the partners in the Leviathan are conducting a feasibility study. 

An offshore liquefaction facility would provide a large measure of independence from geopolitical hurdles and optimum flexibility of supply (not just to supply gas to Europe but to regional and global consumers as well) and control of the assets. 

The capital investment required would potentially be higher than a pipeline project for the same volume of gas, combined with slightly higher operational expenses due to the liquefaction element. 

This is an option that has come to the forefront recently as it circumvents all the hurdles and quagmires of pipeline projects and with five successful FLNG projects already operating in the world, and several more moving ahead, this is certainly an option to keep monitoring. 

Gina Cohen is a Herzliya-based expert on Israel’s natural gas industry. She’s also creator and owner of the Hebrew-English energy lexicon (

Photo credit: Israel Ministry of Energy
Israel has been supplying all of Jordan’s gas needs and the gap in demand above production to Egypt for its own needs
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