War in Gaza hampers gas pipeline projects in the region

As if the Eastern Mediterranean region were not convulsive enough, the discoveries of gas fields made in the last thirty years in the area have provided a new source of rivalry, partly because of the new opportunities they offer. The deposits located in Cyprus (Aphrodite), Israel (Leviathan and Tamar), Egypt (Zohr) or Lebanon (Qana), together with Gaza Marine, in the coastal part of the Gaza Strip, are important because of their strategic significance, but also because of the size of their reserves. The war in Gaza, in any case, has hindered the development of the projects.

The exploitation of such important resources has aroused the interest of the main powers in the Eastern Mediterranean and has increased friction in the region as one after another projects for exploitation and the construction of gas pipelines to facilitate exports are underway. Adding to the problems associated with these operations is the conflict that has been raging in the Levant since the Hamas attack on Israel on October 7, 2023.

In 2019, and with the decisive impetus of the EU and the United States, Cyprus, Egypt, Greece, Israel, Palestine and Jordan agreed on the development of the EastMed gas pipeline within the framework of the EastMed Gas Forum organization. With a length of 2,000 km, the pipeline would provide Europe with 11 billion cubic meters of gas and reduce Europe's dependence on Russian gas, which is still in place in 2024, despite the war in Ukraine. However, the EastMed project collapsed when Biden stepped back in 2022, refusing to support it on the grounds of the frequent hostilities in the area and the high cost of the project.

Countries seeking an alliance with Europe and the United States in the EastMed framework , such as Egypt and Cyprus, were seeking the exclusion of Ankara in order to reduce their influence in the area. As might have been expected, Turkey, not at all willing to stay out of the deal, reacted to these maneuvers by signing, in November 2019, an agreement with the Libyan government of Fayez al Sarraj(GNA) to delimit their respective exclusive maritime economic zones (EEZ), which was followed, in 2020, by a motion to send troops in support of the GNA. The definition of their EEZs endowed Turkey with extensive sovereignty rights in the Eastern Mediterranean. This rattled its Greek and Cypriot neighbors. Three years later, in 2022, Turkey signed a new agreement with the Libyan GNA for offshore oil and gas exploration in Libyan waters. In 2023, the agreement was temporarily suspended by the Court of Appeal in Tripoli on legal grounds.

In 2022, the idea of an underwater gas pipeline from the Leviathan field in northern Israel to its European partners was revived. Diplomatic relations between Turkey and Israel had not been very good so far, as evidenced, for example, by Turkish President Erdogan's refusal to label Hamas as a terrorist organization in March 2024. Mutual interests weighed, for a moment, in favor of cooperation, leaving partially behind the disagreements; that same year there were negotiations between the Israeli and Turkish governments on the supply of gas to Turkey through a pipeline that, from this country, would transport it to Europe.

One of the main obstacles complicating this initiative since then has been the need to rely on the intermediation of Syria or Cyprus (depending on the pathway be followed) to transport the gas from one point to the other, since these are countries at odds with Israel and Turkey, respectively. To solve this problem and get the gas to Europe, a good solution would be to liquefy it in Cyprus and transport it from there to the continent. However, Turkey, which claims a continental shelf that reaches part of the Greek islands and northern Cyprus, argues that the pipeline would cross its Exclusive Economic Zone (EEZ) which, in this view, would give it exploitation rights, and claims to be in the equation when it comes to managing the pipeline passing through Cyprus. Turkey's foreign policy is not so well received by the Cypriot state nor by its neighbors in the Aegean Sea.

At the same time, Egypt and Israel signed an agreement in Cairo to export gas to the EU, whereby the gas will flow from the Ashkelon coast and the Tamar and Leviathan gas fields in Israel to the Egyptian town of El-Arish, in the Sinai Peninsula, through a 100 km pipeline, where it will be liquefied for transport to Europe. This project would provide Europe with an alternative to Russian gas, as well as a better diversification of suppliers. The agreement, which is valid for three years, but renewable - although renewal is unclear - provides for an increase in supply from 5,000 million cubic meters to a total of 7,000 million cubic meters.

There have been many agreements between Israel and Lebanon, Turkey, Cyprus or Greece, which, although they have not yet become binding, express a desire for cooperation in terms of gas exploitation. The American Chevron and ExxonMobil, the Italian Eni and the French Total Energies are the main companies interested in the possible cooperation project .

The outbreak of the war in Gaza and its impact

In June 2023, the Israeli government gave permission to begin development of the Gaza Marine field through the"Gaza Marine Coworking" project undertaken between the Israeli and Palestinian West Bank authorities. Agreements between Israelis and Palestinians, in addition to the protection of international law, grant Palestine sovereignty over the area, although the condition for gas exploitation was Israeli consent. Israel had previously avoided giving its consent because Hamas had controlled the entire territory since 2007, and did not want to grant Hamas the possibility of profiting from it. Although the revenues would officially go to the PA, it is assumed that Hamas would get part of them.

With the escalation of the war between Hamas and Israel since October 2023, the pipeline project and the operation of Gaza Marine's oil and gas platforms were suspended. Gaza Marine, in the Gaza Strip, and Meged, an oil field in the West Bank with estimated reserves of 1.5 billion barrels, have been crippled by the war, further damaging the prospects for the precarious living conditions of the Palestinian population.

The conflict, damaging in itself, imposes a Withdrawal on all the economic benefits of the project, and represents a deep setback in diplomatic relations and agreements that had been tracing a path of cooperation. The attacks on Palestinian territory by the Israeli government have generated the rejection of the Arab states in the region, which are extending their hand to their usual allies. On the other hand, Lebanon, which has suffered in its own skin the extension of the conflict, is now affected by the Israeli foreign policy, which intends to annul the agreements that entrusted Beirut with the exploitation of the Qana oil field.

The conflict in Gaza has not only had dire consequences in the Middle East. Beyond the region, in Europe, the initial escalation of violence resulted in an increase in the price of gas that led to the return to the EU of the 'Iberian mechanism' in force until December 2023, which established a limit on the price of gas in order to reduce the cost in the gas sector. In addition, the blockage of agreements and exploitation of fields in the region also threatens energy security in Europe. Such could be the case of the agreement reached in 2022 between Israel, Egypt and the EU to reduce dependence on Russian gas and open the way to other alternatives. The projects channelling, together with the improvement of economic conditions, predicted a stable 2023, which was cut short by the outbreak of the conflict.

Cyprus, a Mediterranean island divided since 1974 between the Republic of Cyprus (Greek and part of the EU) and the Republic of the North (recognized by Turkey alone), plays a key role in the supply of gas to Europe. Unsurprisingly, tensions over delimitation of exploitation zones and sovereignty have been a constant. Cyprus' support for Israel has accentuated the differences. Recently, Hakan Fidan, Turkish Foreign Minister, denounced Cyprus as having become a base of operations for Israel, endorsing the then still alive Hezbollah leader Hassan Nasrallah, who had pointed out that Israel "carries out operations in Cyprus every year".

The war in Gaza, with the extension of operations to Lebanon, is leaving a deep energy crisis, hindering and even blocking possible agreements between gas suppliers and receivers in the region - Middle East and Africa - as well as in Europe. Cyprus is presenting itself as part of the solution to this new challenge with its Aphrodite field. It does so hand in hand with Israel, through NewMed Energy, which owns 30% of the Aphrodite field. In this sense, the Israeli company proposed the construction of a gas pipeline to Egypt, where the gas would be processed in the El-Arish liquefaction plant, located in its Exclusive Economic Zone (EEZ). The exploitation of this field would seek to reduce Europe's dependence, not only on Russian gas, but also on giant suppliers such as Qatar. Tensions are growing because Turkey remains firm in its claim to sovereignty over Cypriot natural resources.

Regarding the liquefaction plant in Egypt of the Cyprus gas field, the idea has gone through some ups and downs. In 2024, controversy erupted in Europe when, in January, a report on Cyprus' accounts was published, triggering a corruption research that led the EU to reclaim the 100 million euros it had invested in the development of the project.

Gaza Marine and the gas pipeline with Turkey have not only been sidelined by the current war: tensions with Cyprus and the sovereignty rights that Ankara claims over part of the island's maritime space have given way to the development of alternative initiatives that do not involve the Turkish government. Added to this is Turkey's historic support for the militant Hamas group , which positions it against Israel, Cyprus' commercial partner par excellence in the new liquefaction plant being developed with several Middle Eastern countries, as well as Europe and the United States.

Attacks on infrastructure and civilians have left a footprint that will remain beyond the end of the conflict. Gas pipelines are a gateway to economic growth in the region, but they have also been used as a double-edged sword, depriving a large part of the population of energy security.