โ๏ธAND OF COURSE, we can't ignore the reality that ๐จ๐พ doesnโt have local demand to sustain this pipeline alone, AND CURRENTLY THERE IS NO RE-EXPORT INFRASTRUCTURE ON THE ISLAND. Something from the reported plan's financial rationale and broader market scope is missing. 13/
๐งโโ๏ธ ALSO ๐ฎ๐ฑโs export restrictions limit gas flow in order to safeguard its national reserves. Changing these policies is a complicated process (see link re Leviathan field). Without it, this initiative may be legally constrained from the start. timesofisrael.com/israel-grant... 12/
Energy minister says that more than doubling the quantity of natural gas exports will boost state revenue and improve diplomatic ties, while domestic energy needs will be secured
๐ BUT - and there is always a BUT - the fine print really matters here. Karish and Tanin fields are already close to max capacity, and Energean lacks the funds for expansion. Without clear capacity upgrades and solid financing, this project could be more dream than pipe. 11/
The hope is that an ๐ฎ๐ฑ๐จ๐พ energy corridor would not only establish an additional export route and alleviate concerns by IOCs but could also catalyze development (think foreign investment, infrastructure upgrades, regional employment, and economic growth). 10/
Energean is particularly vulnerable, as its fields are located closest to Lebanon. Despite the signing of a maritime boundary agreement in 2022, there have been multiple reports of drones downed in the area around Karish field since the start of the war. 9/
There are reasons why this is happening now: the war has created complications for companies operating in Israel's water to export natural gas consistently, delaying existing projects designed to increase productivity until things cool down: timesofisrael.com/chevron-susp... 8/
Operator of Israelโs offshore reservoir halts infrastructure plans until April 2025; construction was intended to boost production for export and domestic supply
Developing an energy corridor with ๐จ๐พ, a ๐ช๐บ member state during wartime would be a significant achievement for ๐ฎ๐ฑ and would demonstrate a shared commitment to deepening strategic ties. 7/
๐ฎ๐ฑ and ๐จ๐พ have been trying to construct an energy partnership for the past 15 years. If realized, it would be the culmination of intensive process by both diplomatic and commercial parties. 6/
So what does it all mean? For starters, it signals Israelโs intent to strengthen its role in East Med energy, aiming to position itself as a supplier for both Cyprus and Europe. 5/
The gas wouldn't likely stay in Cyprus, but would be exported to a third party - possibly in Europe, but once LNG it is less consequential geopolitically. Important: It would be ๐ฎ๐ฑ's first export deal with a European country (it has agreements with ๐ช๐ฌ and ๐ฏ๐ด). 4/