On 1 January, Russian gas supplies to the European Union via Ukraine were halted after the government in Kyiv refused to renew the existing supply agreement. While the end of the agreement has not caused immediate shortages in Europe, it has renewed concern about energy security within the continent.
With all Russian gas supplies to the European Union (EU) due to end by 2027, the bloc is increasingly reliant on the established Norwegian gas fields and liquefied natural (LNG) from the US and elsewhere. Supplies are also sourced from Azerbaijan. The greater the shipping distance, the greater the risk to supplies from some unknown future crisis.
So the development of gas fields in the Eastern Mediterranean is very good news for the continent, not least because one major new source will be Cyprus, an EU member state. This year, the island will inch closer to becoming a major producer of natural gas — potentially as early as 2027. Together, Cyprus, Egypt, and Israel have an estimated 2,500 billion cubic meters (bcm) of gas reserves, which is double that of Norway and enough to fuel the EU for several years.
The first field to enter production should be the Cronos field, which is estimated to have 70 bcm in reserves and is operated by Italy’s Eni with its French partner, TotalEnergies. This year, Eni’s development plan for the field is likely to be approved, meaning production could begin as early as 2027. Eni intends to pipe the gas directly to the enormous Zohr gas field in Egypt, in which it owns a 50 percent stake, for processing and shipping.
This year, the Cypriot government will likely approve the development plan for the Aphrodite field, Cyprus’ largest offshore discovery so far. With resources anticipated at 127 bcm, Aphrodite is currently being developed by a consortium consisting of the US company Chevron, which is the operator (35%), along with the UK’s Shell (35%), and Israel’s NewMed (30%.)
In the face of some pressure from the government, Chevron appears to have opted to use a floating production unit, which would see Cyprus process and ship the gas directly. The Cypriot government maintains that this approach would also ensure that the operator could ensure sufficient pressure in the field to maximize its long-term prospects.
Finally, this year is also likely to see additional major new discoveries. In November, the US firm ExxonMobil announced that it, together with consortium partner QatarEnergy, intends to begin drilling two wells at the Elektra and Pegasus fields. While Pegasus shows some promise, the company believes that Elektra could prove to be a major find, potentially rivaling Aphrodite.
ExxonMobil should receive preliminary results from these surveys by mid-year. This exploration activity will complement the company’s other activities in the Eastern Mediterranean in 2025, including Egypt’s Western Mediterranean, where the company struck gas at the Nefertari-1 prospect on 10 January.
Aside from gas, Cyprus could also play a central role in connecting the EU’s electricity networks to Israel. The Great Sea Interconnector (GSI), a proposed 1,208km (750 mile), 1,000 MW underwater electricity cable connecting Crete, Cyprus, and Israel, would increase energy security and facilitate the green energy transitions of all participants by providing access to a larger network that can share low-carbon energy.
That’s because renewable energy — almost exclusively solar — currently makes up 19% of the energy balance in Cyprus, and should reach 33% by 2030. The interconnector would aid this transition by giving the island an outlet for excess capacity during peak production, or necessary additional supply during times of peak demand.
However, the project continues to face significant difficulties. Financing has been a consistent concern for Nicosia, which has proven extremely cost-sensitive. And, last month, a new dispute arose over the structure of the shareholding for the project.
The main risk for Cyprus’ energy ambitions comes from Turkey. Having invaded the island in 1974 and occupied its northern areas, Turkey’s government and its allied Turkish Republic of Northern Cyprus (TRNC) argues that the rest of the island should share its energy windfall (though several of the gas fields are a long way south of the island and are closer to Israel than Turkey or its Cypriot statelet.) This has resulted in periodic tensions, such as in 2018, when Turkish military vessels impeded ENI’s drilling activity.
Turkey has so far not indicated that it intends to interrupt offshore development. Notably, when ExxonMobil announced its plans to begin drilling at Elektra in December, it did not publicly support the objections of the TRNC, which were addressed to the United Nations.
However, recent developments in Syria could change the calculation for the Erdoğan administration. The emergence of militant group Hay’at Tahrir al-Sham (HTS) as the leading force in a new government in Syria has increased Turkey’s interest in the Eastern Mediterranean, which may further complicate matters for Cyprus and its partners.
On 24 December, Turkish Transport Minister Abdulkadir Uraloğlu stated that Turkey will sign an agreement on an exclusive economic zone (EEZ) in the Mediterranean with the new Syrian government, which is closely allied with Ankara. Athens and Nicosia fear that this zone would intersect Cypriot waters in a similar fashion to the 2019 agreement between Turkey and the Libyan Government of National Accord, which triggered significant opposition in Nicosia and other European capitals.
The Eastern Mediterranean’s complex geopolitics have been a constant threat to the development of the region’s energy sector. Nevertheless, this year, the Cypriot government appears well placed to usher in a new phase of development.
The energy majors are also making significant progress in Egypt and Israel, creating new momentum in Cyprus, and the Cypriot government has proven effective at moving projects forward. Such progress could lead to some notable breakthroughs this year.
Benjamin Godwin is Partner at PRISM Strategic Intelligence.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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