Israel, EU Sign Gas Deal

The European Union (EU) has signed a memorandum of understanding with Israel that eventually could see significant quantities of Israeli natural gas shipped to Europe via Egypt. The trilateral agreement, signed at the ministerial meeting of the East Mediterranean Gas Forum in Cairo, calls for Israeli gas to be sent through underwater pipelines to two liquefied natural gas (LNG) facilities in Egypt. From there, the LNG would be transported across the Mediterranean Sea on LNG vessels to markets in Europe.

The EU is desperately trying to reduce its dependence on Russia, which supplied around 40 percent of the bloc’s gas imports in 2021. Shortly after Russia invaded Ukraine, the European Commission, the EU’s administrative arm, proposed reducing imports of Russian gas by two-thirds before the end of this year.

Most energy analysts agree that LNG imports are merely a temporary solution for Europe’s gas needs. Over the long term, undersea pipelines between Israel and Europe would offer a less expensive, more stable source of gas. Two gas pipeline alternatives are under discussion.

One option involves building a $1.5 billion, 500-kilometer (311-mile) pipeline between Israel’s largest offshore natural gas field, Leviathan, and Turkey, from where Israeli gas would be forwarded to southern Europe through existing pipeline infrastructure. This option would leave Israel strategically dependent on Turkey, whose president, Recep Tayyip Erdoğan, is hostile to the Jewish state.

The second option involves the 2,000-kilometer (1,243-mile) Eastern Mediterranean (EastMed) pipeline, a $6 billion project to ship natural gas from Israeli and Cypriot waters to Greece and Italy. Shortly before Russia invaded Ukraine, the Biden administration withdrew American support for EastMed because the pipeline was antithetical to its “climate goals.”

The war in Ukraine may contribute to the revival of the EastMed project, regardless of White House opposition. Former Israeli Energy Minister Yuval Steinitz recently called on the Israeli government to give top priority to building the pipeline. Steinitz said EastMed is economically and technically feasible and “makes sense.” Italian energy executive Fabrizio Mattana called EastMed the most secure option compared to other gas export solutions, adding that EastMed would take up to four years to complete after an investment decision is reached.

Even with new infrastructure, Israel will never be able to replace Russian gas supplies to Europe.

The EU has also pledged to encourage European energy companies to explore for new gas fields in the Eastern Mediterranean. Elai Rettig, an assistant professor of political studies at Bar-Ilan University in Tel Aviv, said Europe’s demand for energy could become a windfall for Israel. “Europe needs as many alternative sources as possible,” he said. “The more export deals that are made, the more infrastructure will be built, the bigger the chances are that new energy companies will come to look for more gas in the Eastern Mediterranean.”

Israeli Energy Minister Karine Elharrar said, “This is a tremendous moment in which little Israel is becoming a significant player in the global energy market. The memorandum of understanding will allow Israel to export Israeli natural gas to Europe for the first time, and it is even more impressive when one looks at the string of significant agreements we have signed in the past year, positioning Israel and the Israeli energy and water economy as a key player in the world.”

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