News Analysis: Egypt-EU-Israel gas deal "model for joint cooperation": analysts-Xinhua

News Analysis: Egypt-EU-Israel gas deal "model for joint cooperation": analysts

Source: Xinhua| 2022-06-19 04:02:43|Editor: huaxia

CAIRO, June 18 (Xinhua) -- Egypt, Israel and the European Union (EU)'s agreement on the transport and export of natural gas is a model for cooperation between gas consumers and producers, and enhances joint regional cooperation, according to Egyptian experts.

On Wednesday, Egypt, the EU, and Israel signed a gas deal to allow more Israeli gas to be liquefied in Egypt and then transported to the EU, as the bloc tries to limit dependence on Russian energy imports.

The deal was signed as Egypt hosted the East Mediterranean Gas Forum (EastMed), a grouping established in 2019 that aims to boost gas trade between regional countries including Israel, Greece, Cyprus and Jordan, and during a visit by European Commission President Ursula von der Leyen to Cairo.

Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla said on Friday that the trilateral deal would contribute to encouraging global companies to speed up the production and development of infrastructure and natural gas resources in the Middle East.

"The move is a benchmark that opens the road for concluding more deals in the future," El-Molla said.

Egyptian economist Karim Al-Omda described the agreement as an important model for boosting cooperation between gas consumers and producers and enhancing cooperation among energy powers in the region.

"This comes as the EU seeks to wean itself off Russian gas after the measures taken by Russia to reduce gas pumped to European countries," Al-Omda told Xinhua.

The huge explorations of natural gas in the Middle East could benefit regional countries through cooperation with the EU, which is one of the most prominent and important consumers of natural gas in the world, the expert said.

He said that Egypt owns the largest natural gas liquefaction stations in the region which is not operating at full capacity. The agreement is a good instrument to ensure their maximum use, he said.

The economist pointed out that Egypt is also a gas producer, but its exports have been limited by rising domestic demand. Egypt produces 7.2 billion cubic meters daily but consumes about 6 billion cubic meters domestically, while most of Israel's gas production is unrestricted for export.

Based on an agreement signed between Egypt and Israel in 2020, Israel exports about 20 million cubic meters of gas per day from an offshore field to Egypt, where it is liquefied and shipped to European countries, Al-Omda said.

"Liquefaction and passage into the Egyptian natural gas network mean income to Egypt," the economist said.

But a significant increase in gas exports from Israel via Egypt would require major long-term infrastructure investments, he said, adding that the deal is just a beginning and several countries could join it.

Egypt will rehabilitate the gas fields in Palestine, and countries such as Syria, Jordan, and other members of the EastMed can join and use Egyptian liquefaction facilities and transport gas to Europe, Al-Omda said.

After the signing of the agreement, von der Leyen said "this is a big step forward in the energy supply to Europe, but also for Egypt to become a regional energy hub."

She said the agreement was part of Europe's efforts to diversify energy sources away from Russia and import hydrocarbons from "other trustworthy suppliers," naming Israel and Egypt who have emerged as gas exporters in recent years following major offshore discoveries.

"This will contribute to our EU energy security, and we are building infrastructure fit for renewables -- the energy of the future," she tweeted.

Meanwhile, Saeed Sadiq, professor of political sociology with the American University in Cairo, said "the deal is an investment in Egypt's proactive vision of establishing a strong infrastructure for natural gas liquefaction stations, whether in Damietta or in Idku."

He added the deal is an important outcome of the EastMed and emphasizes the close strategic relations between Egypt and its partners in the energy fields.

However, Sadiq noted that this gas will not be a substitute for Russian gas but only "mitigate the harmful effects of the current international changes," adding that the agreement also helps Egypt to realise its ambition to become a regional energy hub.