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Wednesday, 20 June 2018

Egypt's Eastern Mediterranean boon

Just as with plans to develop Sinai, shared interests can create a zone of prosperity and cooperation in the Eastern Mediterranean

Abdel Moneim Said , Thursday 1 Mar 2018
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In this column, on 21 June 2017, I spoke of a “region of mutual security and prosperity” in connection with the Egyptian-Saudi maritime border demarcation agreement.

That agreement would open the doors to a promising era of prosperity in the Red Sea region between Egypt and Saudi Arabia, I wrote. The agreement came at a time when Egypt cast its sights towards projects in the Sinai, and Saudi Arabia pledged to support Egyptian development efforts in that peninsula.

Both countries are now proceeding in accordance with the ambitious Vision 2030 development plan and its bold development projects.

That experience in the Red Sea region is currently in the process of being repeated in another area, no less extensive than the Red Sea: the Eastern Mediterranean. Once again, the key resides in a maritime border demarcation agreement, in this case between Egypt and Cyprus.

The results are, firstly, major natural gas discoveries in Egypt’s and Cyprus’s economic waters and, secondly, a preliminary agreement under which Cyprus will send its gas to Egypt to be processed, liquefied and exported.

Then, in a related development, the Egyptian Delphinus gas company signed a $15 billion deal with the US-based Noble company and its Israeli partners whereby the former will receive the natural gas produced by the Israeli Tamar gas field through already existing pipes, again, in order to process, liquefy and export.

It all started millions of years ago, with the alluvium — all the silt, stones, sand, vegetation, etc — that the waters of the Nile carried in their long course from their Ethiopian sources through Sudan to the river’s mouth in the Mediterranean.

As occurred with the alluviums from the Mississippi in Gulf of Mexico, the combined forces of heat, pressure and time transformed all that organic material into oil and gas beneath the surface of the bodies of salt water.

With the beginning of the second decade of the 21st century, discoveries of this mineral wealth gave rise to natural gas fields known as “Aphrodite” (Cyprus), “Tamar” and “Leviathan” (Israel) and “Zohr” (the largest natural gas field in Egypt).

There is promise of similar fields in the territorial waters of Gaza and Lebanon. Without entering into great detail about companies, assets and other economic and financial concerns, it is clear that oil and gas now form a basis for mutual cooperation and benefit among the countries of the Eastern Mediterranean. There is another important fact.

Just as occurred with the Red Sea region, maritime border demarcation agreements concluded in accordance with international law have created a legal reality that has transformed oil and gas from a source of conflict to a source of partnership in prosperity.

Fortunately, Egypt was prepared to play a central role in this realm of interactions in view of its long history in petroleum transportation through the Suez Canal and the Sumed pipeline, which carries oil from the Gulf from Ein Sokhna to the terminal on the Mediterranean from where it is shipped to Europe.

In addition, Egypt now possesses two gas liquefaction plants — the Egyptian-Spanish Gas Company in Damietta and the Egyptian Natural Gas Liquefaction Company in Idku — and it already possesses the largest network of gas pipelines in the region, extending to the borders of Israel and Jordan.

Also, it goes without saying that Egypt is the largest market in the region for natural gas, whether for industry (most major Egyptian industries, such as the petrochemical, steel and iron, aluminium and construction materials industries, are heavy energy consumers) or for domestic uses in people’s homes. Because of such factors, Egypt is perfectly poised to serve as the link between the Red Sea region and the economic zone that is in the making in the Eastern Mediterranean.

Perhaps the military campaign “Operation Sinai 2018”, which the Egyptian Armed Forces launched in Sinai in order to break the backbone of terrorism, is the strategic component that makes Sinai a crucial link in the relationship between the two seas.

As is always the case in international and regional relations, changes generate winners and losers and, in the process, counter-movements. In this case, Turkey burst in as self-declared defender of Northern Cyprus and refused to recognise the Egyptian-Cypriot agreement.

Meanwhile, various groups in Egypt and elsewhere in the Arab region began to question the impact of such changes on the Palestinian cause.

The Turkish position might be understood from a geopolitical and an economic perspective. Turkey, too, is a country bordering the Eastern Mediterranean while the natural gas generated in this vicinity will compete with Russian natural gas that passes through Anatolia on its way to Europe.

But to understand that position does not mean one has to accept it. Northern Cyprus is not an international reality as long as no other country in the world recognises it apart from Ankara, and competition is always possible with every commodity that is traded across borders and continents.

With regard to the impact on the Palestinian cause, there is no indication that the new changes will be detrimental to it. On the contrary, they might help it. Not only is there gas off the Palestinian coast; it is probably easier to draw the Egyptian-Palestinian and Palestinian-Israeli borders at sea than on land.

At the same time, an Israel assimilated into a region of mutual prosperity might be more flexible than an Israel in a region of permanent conflict, especially if that region includes not just Palestinians but also Lebanon and maybe Syria in the future.

It is important to note, here, that the changes not only affect countries with maritime economic borders, cross border gas fields, and a multipurpose substance that is also more environmentally friendly. The changes also extend to many other countries. Spain is a main partner in the Egyptian gas liquefaction plant. Italy discovered and developed the Zohr field and is also a partner in a liquefaction plant.

The US owns the largest share in the Israeli fields while Russia has purchased a significant share of the Zohr field. We are actually speaking more of an international question than a regional one. If the main components of this phenomenon are “geo-economic”, they will most likely generate geopolitical results.

In last week’s column, I spoke of the “return of political geography”. Perhaps what is unfolding today will be part of that return. This calls for new types of thinking regarding regional security and it requires solutions to the violence, terrorism and instability precipitated by the so-called Arab Spring.

As one tends to say in such situations, there are always risks and opportunities. In my opinion, the opportunities are greater. But first we need to learn the lessons from opportunities lost in the past. If we can do that, we might succeed this time.

*The writer is chairman of the board, CEO, and director of the Regional Centre for Strategic Studies.

*This article was first published in Al-Ahram Weekly

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