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Natural gas: Is Cyprus still in the game?

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By Michael Olympios

Natural gas exploration is a tough business. And its politics are often as complex as its engineering.

Over the years, Cyprus tried to form a geostrategic alliance with Israel, Egypt, and Greece to realise its ambitions to become a regional energy hub without belligerent Turkey involved.

But last week, two of its key allies Egypt and Israel, broke ranks to announce that they are going to build their pipeline and link their respective natural gas fields.

Israeli Energy Minister Yuval Steinitz hosted a meeting with Egypt counterpart Tarek El Molla as their countries look for new ways to expand east Mediterranean natural gas development.

Steinitz said the two governments were moving ahead with the pipeline plan and were working on a formal agreement.

“The two ministers agreed on the construction of (an) offshore gas pipeline from the Leviathan gas field to the liquefaction facilities in Egypt, in order to increase the gas exports to Europe through the liquefaction facilities in Egypt,” Steinitz’s office said in a statement.

So, where does Cyprus stand in the new natural gas exploration architecture?

The plan for creating the EastMed pipeline that was supposed to get the four major players together to supply Europe with natural gas and offer an alternative to Russian gas seems to be fading away.

If that’s the case, Cyprus will be left alone to deal with an issue that only the big players can handle.

The island’s reserves are not enough to be profitably exploited by the giant energy companies that secured exploration rights.

And Turkey will undoubtedly demand a piece of the action in any future plans by ensuring that the pipeline goes through its territory, a much more economical alternative to that of the EastMed to gain a geostrategic advantage.

However, Turkey is not a reliable partner.

Its “gangster politics” in the Middle East and elsewhere create a lot of uncertainty about such a plan’s security and viability.

The latest developments appear to leave Cyprus without a serious action plan.

The government has some explaining to do about these developments and how it plans to address the energy exploration question.

But the only thing we have from the government so far is a deafening silence—an ominous sign of the new predicament.

Michael Olympios is an economist, business consultant and Editorial Consultant to the Financial Mirror