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Russia sanctions could breath new life into EastMed

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Cyprus’ dreams of building the ambitious EastMed natural gas pipeline from Israel to Europe may not be dead in the water just yet, as the war in Ukraine and sanctions on Russia have meant that the EU may be looking for alternative energy sources.

Russia’s invasion of Ukraine earlier in February and the sanctions that followed, meant that the bloc will be in the market to replace at least part of the supply of Russian natural gas on which it is heavily dependent.

Cyprus’ dreams of becoming an energy hub, including exporting potential offshore natgas discoveries, took a step backwards after the US said in January that it no longer supported the ambitious project, as it found it to be unsustainable.

Nicosia had also confirmed the construction of the EastMed gas pipeline was a long shot through its Foreign Minister Ioannis Kasoulides.

Kasoulides had said that nothing was set in stone, while it remains to be confirmed whether the project was financially viable.

However, the EU’s decision to rapidly reduce its dependency on Russian natural gas, coupled with a spike in fuel prices, could make the EastMed project attractive once more, say energy investors and consultants.

Nicola Monti, CEO of Edison SpA, underlined in recent comments the urgent need to bring the EastMed pipeline project back into focus in order to be able to diversify natural gas sources and include reserves close to the European market.

Monti argued that that the project was viable before the energy crisis brought on by the war in Ukraine, and even more competitive today.

“The project can be implemented within four years, as funding and political approvals have been acquired,” Monti added, noting that it is the only project that can diversify Europe’s natural gas supply.

Meanwhile, the bloc’s “Repower EU plan”, prioritises Europe’s independence from Russian gas, boosting the attractiveness of the East Med pipeline, which is expected to supply Greece and European markets with natural gas from reserves in the eastern Mediterranean, belonging to Cyprus, Israel and Egypt.