Mediterranean gas and Europe


The global economy seems to have entered a commodity super-cycle due to expectations of a strong post-pandemic recovery, driven by mass vaccination and economic stimulus programmes. As demand rises, so do prices, and Europe is being hit hard by its heavy energy dependence. The European Union imports about $40 billion worth of natural gas, which represents 23 per cent of its total energy imports. About 43 per cent of this comes from Russia.

Energy security is a key concern. The EU should have alternatives to diversify its supply sources, as well as manage its political and economic risks and limit its dependence on Russian gas. Recent major natural gas discoveries in the eastern Mediterranean give the EU the option it is seeking, but also pose new challenges for governments and international actors in the race to exploit the discovered wealth.

The eastern Mediterranean could become one of the main global gas supply areas. Resources are estimated at 122 trillion cubic feet of gas, plus 1.7 trillion cubic metres of oil, located off the coasts of Syria, Lebanon, Cyprus, Israel, Egypt and Palestine. The overall quantities can justify the enormous costs of a new pipeline to Italy and the rest of Europe. From the south there are already pipelines transporting gas from Algeria to the EU. This is an opportunity for development and growth both for the producing countries and for the EU, which by 2030 needs to import some 113 billion cubic metres per year.

The region's potential is considerable. In addition to oil and gas, it has one of the highest hydroelectric power systems, wind resources and solar radiation in the world, as well as large tracts of desert. Technically, the region could be a major energy player and supply the needs of part of the planet. But discoveries of gas fields are stirring the pot of regional turmoil. The absence of a maritime boundary demarcation law and the appetite of other players such as Russia and China make for a volatile and highly complicated situation.

It is essential to find the best economic and strategic solutions that optimise operations, mobilise the necessary resources and promote long-term viability. Some Mediterranean countries will have to join forces if they want to take advantage of their resources. All public and private actors in the sector are aware of the advantages of a shared vision to develop energy cooperation between the two shores of the Mediterranean and to promote the construction of a natural gas market in the region.

Anwar Zibaoui

Association of Mediterranean Chambers of Commerce and Industry