2022 Yearender: Energy benefits for Egypt

Ahmed Eleiba , Tuesday 27 Dec 2022

The Russia-Ukraine war has thrown calculations surrounding natural gas production and supply into disarray, bolstering Egypt’s position as a regional energy hub.

natural gas
natural gas


The Russia-Ukraine conflict has sent powerful tremors through the global energy markets and created havoc in European energy supplies.

The East Mediterranean Gas Forum has emerged as a lifeline for Europe, which had depended on Russia for 40 per cent of its natural gas needs, and Cairo has hosted many activities in this regard. 

In addition to organising several meetings between the forum and European partners, it also hosted the signing ceremony of a new tripartite agreement between Egypt, the EU, and Israel for the trade, transport, and export of liquefied natural gas (LNG) in the East Mediterranean Gas Forum framework.

Natural gas is a major energy resource, making the huge underwater gas fields in the East Mediterranean an economic powerhouse for all the forum’s members. 

But Egypt, which already has two large gas liquefaction plants on its northern coast, in Damietta and the Idko plant east of Alexandria, and which is geographically situated at the heart of the forum and close to energy-hungry Europe, has a relative advantage as it is perfectly positioned to serve as a regional energy hub. 

Egypt started to become a regional natural gas hub in 2018 when it signed an agreement with Greece and Cyprus to establish the East Mediterranean Gas Forum with Cairo as its headquarters. The organisation was officially launched in 2019. By September 2021, the forum had expanded to include seven countries: Egypt, Jordan, Israel, Greece, Cyprus, Italy, and Palestine.  

It might seem odd that Cairo is emerging as a regional energy hub when it is only the sixth-largest natural gas producer in the Arab region. However, Egypt’s unique geostrategic position, its extensive network of good relations, its cool-headed diplomacy and aversion to conflict, and its belief that the surplus revenue from energy should be invested in the much-needed development of all countries in the region are among the criteria that outweigh production volume. 

For Egypt, its status as the headquarters of a major energy forum adds another important feather in the cap of its growing soft power.

Egypt has taken pains to avoid embroiling itself in actual or potential energy disputes as it has worked to enhance its alliances within a robust regional energy bloc and to strengthen its ability to protect its economic waters. 

The Egyptian Navy, from its coastal patrol forces to its high-seas fleets, has become a powerful deterrent to threats to Egypt’s strategic maritime assets. 

Nevertheless, Egypt has always stressed the need for diplomacy as the main guarantee for the interests of all sides. It has repeatedly stated that international law and, specifically, the UN Convention on the Law of the Sea must remain the frame-of-reference in maritime-border delineation and resolving any disputes that arise in this context. 

In addition, Cairo will continue to work to promote and safeguard stability in its strategic neighbourhood. This includes Libya, and the restoration of peace and stability in that country is an Egyptian national security priority. 

Common economic interests can act as an important safety valve in this regard, but maximising it requires an end to foreign interventions that hamper the exercise of national sovereignty. This not only applies to Libya, but also to other countries in the Arab region. 

Few would have been able to imagine it not so long ago, but gas has changed the nature of regional alliances. It is no coincidence that infrastructural linkages are now also called “peace pipelines”. 

Nevertheless, underwater gas in the East Mediterranean has extended the lines of conflict, as the case of the Lebanese-Israeli border has shown. A significant breakthrough in this regard occurred in 2022, when after long and arduous negotiations Israel and Lebanon finalised a maritime-border demarcation agreement. 

Israel has described the agreement as of great political value for both countries. For Lebanon, it offers an avenue out of its desperate economic straits. 

Israel and the Palestinian Authority (PA) have not yet reached such an agreement. One sticking point is the fact that the PA insists that it, not the Hamas government in Gaza, controls operations in the Gaza gas fields. This makes sense as the business of designating the maritime borders in that area and concluding the agreement has to be conducted by the governments of Egypt, the PA, and Israel. 

The prospective addition of the Palestinian gas fields, especially those off the Gazan shore, has thrown into relief an added factor in the equations: port facilities and gas and oil terminals. 

As various studies have indicated, Egypt’s geographical position acquires additional value in this context. Israel now ships gas from its Leviathan Field to Egypt, which liquifies it and re-exports it to Europe. The same thing applies to Cyprus, which has constructed a pipeline connecting its Aphrodite natural gas field to Egypt’s LNG facilities.

To the west, the turmoil and continued instability in Libya and Turkish ambitions there have contributed to complicating the situation in the East Mediterranean. Taking advantage of the confusion of the geopolitical divide, institutional bifurcation in Libya, and the tensions surrounding the battle of Tripoli in 2020, Turkey signed a maritime-border agreement with the Tripoli-based Government of National Accord (GNA) in April that year. 

The controversial agreement is still being challenged by East Mediterranean countries, the US, the EU, Russia, and many others, as it infringes the sovereign rights of Greece and Cyprus and violates international law.

The agreement was also contested in Libya, as under the 2015 Libyan National Accord the GNA did not have the authority on its own to conclude international agreements. The UN has also not recognised the agreement. 

In 2022, Ankara tried to create further de facto realities through energy agreements with the Government of National Unity, again triggering regional and international objections.

Ankara currently wants to obtain natural gas from Nigeria, the main source of energy in Africa, and from Algeria, in order to export it to European markets. Initially, the Europeans had planned to import Algerian gas through a pipeline passing through Morocco, but Algerian-Moroccan tensions have intervened. 

Clearly, Ankara hopes to leverage itself into an energy hub rivalling the East Mediterranean Gas Forum, an aspiration that adds a complicating factor to what appears to be a general trend towards Turkish-Egyptian and Turkish-Israeli rapprochements. 

Meanwhile, Libya’s state oil authority, the National Oil Company, has proposed the possibility of linking natural gas projects in eastern Libya that are still in the drilling phase with Greece by way of Egypt. 

The US supports the plan, which would be an extension of the East Mediterranean Gas Forum. Tripoli, however, has shown resistance to the idea, which is essentially a political stance that reflects the political divides in Libya and their regional and international extensions.

*A version of this article appears in print in the 22 December, 2022 edition of Al-Ahram Weekly

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