Regional energy ministers meeting in Cairo on January 14 agreed to establish the East Mediterranean Gas Forum. The purpose of the body is to expedite the development of hydrocarbon resources in the East Med, with a view to transforming the region into an energy hub.
Egyptian Petroleum Minister Tarek El Molla chaired the meeting that was attended by officials from Cyprus, Greece, Israel, Jordan, Italy and the Palestinian Authority. Representatives from the EU and the World Bank were also present.
A draft of a document drawn up by Egypt to govern the workings of the organisation is under review by the member countries and will be discussed further when the group next meets in April or May. An initial statement said the forum, which will be based in Cairo, was open to new members joining in the future.
Egypt’s Petroleum Ministry released a statement outlining the forum’s goals. These include the creation of a regional gas market "that serves the interests of its members by ensuring supply and demand, optimising resource development, rationalising the cost of infrastructure, offering competitive prices and improving trade relations."
The forum will also support gas producing countries by "enhancing their co-operation with consuming and transitory parties in the region, taking advantage of existing infrastructure and developing further infrastructure options to accommodate current and future discoveries," the statement said. And it will support consuming countries by "securing their needs and allowing their participation with the transitory countries in the development of gas policies in the region."
Egypt’s gas output has been turned around by the discovery of the 850 bcm Zohr gas field by Eni in 2015. The country recently said it was now capable of meeting domestic gas demand, opening the way for its return as a natural gas exporter. Its geographical location and established infrastructure have created the ideal conditions for it to become a regional energy hub.
Meanwhile, around 990 bcm of gas has been discovered offshore Israel, with output currently supplying the local market. Later this year Israel will also begin exporting gas to Egypt for domestic use.
Two gas discoveries offshore Cyprus give the island around 340 bcm of gas reserves, with ExxonMobil currently leading the search for more. Nicosia is in the process of negotiating terms to export gas from its Aphrodite field to Egypt’s semi-idle LNG plant at Idku for re-export to Europe. Israeli gas will also probably be moved to Egypt for processing into LNG in the near future.
In a sign of the gas-fired diplomacy under way in the region, Energy Minister Yuval Steinitz became the first Israeli minister to visit Cairo since 2011 when he attended this week’s meeting. "I think this is the most significant economic co-operation between Egypt and Israel since the signing of the peace treaty 40 years ago," he said.
Cypriot Energy Minister Yiorgos Lakkotrypis said the forum would create the framework "in which big hydrocarbon companies could operate and to attract multi-billion investments that are necessary for this industry to work in the region."
Lakkotrypis said the forum would serve as a platform for dialogue and planning the infrastructure needed in the region to make it more competitive.
"This agreement brings us [Cyprus] even closer to our goal, which is the optimal and safe exploitation of our country’s hydrocarbon reserves," he said. "For this reason, alliances in our region are necessary for us to be able to continue exercising our sovereign rights unobstructed."