Recently the Yahoo Finance reported the following:
Italy Turns Its Back On Russian Gas
Oilprice.com OilPrice.com, Oilprice.com Sat, Mar 16 8:00 AM PDT
|Eastern Mediterranean Gas|
New natural gas discoveries in the Eastern Mediterranean might be a boon for the European Union’s efforts to move away from dependence on Russian energy supplies. In the current complex energy game between Europe and Russia, Italy could play an important role as an entry point for gas deliveries from Egypt, Israel and Cyprus, despite the current Italian government’s largely sympathetic stance toward the Kremlin (see EDM, April 10, 2018; June 6, 2018).
On February 28, the United States energy giant ExxonMobil announced it discovered natural gas off the southwestern coast of Cyprus (Exxonmobil.com, February 28). The new find adds to other giant offshore gas fields discovered in the region such as Aphrodite and Calypso in Cypriot waters, Israel’s Leviathan and Tamar, and Egypt’s Zohr (Iai.it, February 23).
By the end of the year, the governments of Italy, Greece, Cyprus and Israel are expected to sign a multilateral agreement to build the EastMed pipeline, which promises to bring a natural gas bonanza to Europe (Edison.it, accessed on March 4). Russia is currently the largest single provider of gas to the EU, and supplies from the Eastern Mediterranean basin are seen as a viable alternative to state-owned Russian gas monopoly Gazprom. Currently, Russia accounts for around 40 percent of the European bloc’s natural gas imports (Ec.europa.eu, November 19, 2018).
The planned EastMed gas corridor is projected to cost $7 billion and is backed by the European Commission. It is designed to initially transport 10 billion cubic meters (bcm) of gas per year from offshore reserves in Cyprus and Israel to Greece and, thanks to its connection with the planned Poseidon pipeline, onward to southern Italy.
Yet, critics say the project is too expensive and faces serious technical challenges (Cyprus Mail, February 13, 2019; Bruegel.org, May 10, 2017). Furthermore, EastMed is opposed by Turkey, which has territorial disputes with the internationally-recognized Cypriot government in Nicosia, including competing claims to waters around the island.
Up to this moment Russia is the largest single gas provider to the EU, Russia accounts for around 40 percent of the European bloc’s natural gas imports and Germany is replying on Russia for energy supply. If EastMed can become a reality, I think the influence of Russia over some European countries will be reduced.