Hydrocarbon Processing - June 2021 - GP-11

INDUSTRY FOCUS
EastMed pipeline faces technical challenges,
competition
E. GERDEN, Contributing Writer
The outcome of the EastMed pipeline
project-a planned, 1,900-km (1,180mi),
subsea pipeline that would supply
Europe with 9 Bm3
y-12 Bm3
y of natural
gas from the Eastern Mediterranean-
is being closely watched by many on
the global stage. If built, it would be the
world's longest and deepest subsea gas
pipeline and provide considerable energy
resources to European markets.
Partners eye fast track to 2025.
Greece, Cyprus and Israel signed an agreement
in January 2020 for the EastMed
pipeline to pump offshore gas between
Israel and Cyprus to Greece, and then to
Italy and other Southeast European countries.
The three stakeholder countries
plan to take a final investment decision
(FID) by 2022 on the €6-B project. The
consortium hopes to develop the pipeline
as soon as 2025, in an effort to fast-track
Europe's diversity of gas resources.
Proposed pipeline reroute. In contrast
to the original pipeline plan, Greece
and Egypt are discussing the possibility of
changing the pipeline route due to technical
and economic difficulties. Delek Drilling
and Chevron, the operators of Israel's
Leviathan field (FIG. 1), have announced
their intention to boost gas supplies to the
Egyptian market, further calling into question
prospects for the EastMed pipeline.
According to Derek Drilling, proven
and probable reserves of the Leviathan
field are 377 Bm3
, with another 270 Bm3
classified as promising resources, as of
July 2020. The known reserves are insufficient
to fill the original pipeline route.
Instead of running to Cyprus through
an offshore pipeline, the newly proposed
pipeline route would run from Israel's
Leviathan gas field to Egypt by land and
then to the Greek island of Crete, passing
through the Greek-Egyptian Exclusive
Economic Zone. Gas would be liquefied
at Egypt's Damietta and Idku LNG terminals
near Port Said. The gas then would
be transported as LNG to Europe.
The project reroute would promote
Egypt's status as a regional gas hub and
provide an opportunity for Israel to gain
direct access to the European gas market.
However, even if Egypt is added to the
project, EastMed's feasibility relies heavily
on potential new discoveries of gas reserves
in the region.
Reroute raises tensions. The proposed
reroute heightens political tensions
between Cyprus and Turkey, as Cyprus
would be left out of the new pipeline
route, leaving Turkey to advance its interests
in the Eastern Mediterranean.
Turkey's requests for inclusion have so
far largely been ignored by regional players.
More recently, however, Israel has expressed
a desire to cooperate with Turkey
on natural gas exports.
Conduit to Egypt threatens EastMed.
A second pipeline project by Israel and
Egypt may threaten the EastMed project
and double Israel's gas exports to Egypt.
Israel started exporting gas to Egypt in
early 2020 through an existing pipeline
that runs offshore before crossing the Sinai
Peninsula overland.
Now, the two countries have proposed
a new, $6-B-$7-B, subsea pipeline to send
gas to be liquefied in Egypt before being
exported to the EU. The capacity of the
pipeline could reach 10 Bm3
y at the initial
stage, with a possible expansion to 20
Bm3
y. The construction of the pipeline is
expected to take only 1 yr-2 yr.
Up to $235 MM could be invested in
the construction of the second export
pipeline to increase gas supplies to Egypt,
which is boosting gas exports from its
own fields, including Zohr. Egypt also
has spearheaded the establishment of the
East Mediterranean Gas Forum, which
includes Cyprus, Greece, Israel, Italy, Jordan
and Palestine.
FIG. 1. Israel's Leviathan gas field, operated by
Delek Drilling and Chevron. Photo: Teckhnoblog.
Pipeline challenges to Russian gas.
Both the EastMed pipeline
and the
newly proposed pipeline from Israel to
Egypt threaten Russian state-owned
Gazprom's expansion into Southern
Europe's gas markets over the next decade.
The pipeline projects would also
negatively affect Russian independent
producer Novatek, which supplies 80%
of the gas from its Yamal LNG flagship
project to the EU market.
Regardless of whether the proposed
pipeline projects go ahead, Europe will
still rely on Russian gas. For this reason,
the startup of Gazprom's delayed Nord
Stream 2 gas pipeline from Russia to Germany
is of critical importance for Russia
and European consuming countries. The
pipeline was delayed as some companies
were forced to withdraw from construction
efforts under threat of U.S. sanctions;
however, Nord Stream 2 is now on
track for completion in 2021/2022 and
was 92% finished as of late March. GP
EUGENE GERDEN is an
international contributing writer
specializing in the global oil
refining and gas industry. He has
been published in a number of
prominent industry publications.
Gas Processing & LNG | MAY/JUNE 2021 11
Hydrocarbon Processing - June 2021

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