The East-Med natural gas pipeline project is not economically feasible and will share the same fate as the non-actualized Nabucco pipeline, which aimed to carry Caspian gas to Europe, the Chairman of Damnus Energy & Investment Inc. said Tuesday.
Damnus chairman Nusret Comert referred in an exclusive interview with Anadolu Agency to the media coverage that exposed the recent agreement signed between Israel, the Greek Cypriot administration, Greece and Italy to build the East-Med Natural Gas Pipeline.
Comert described efforts to finance and build the pipeline from Israel's offshore to Europe as 'fruitless.'
According to Israeli media reports at the weekend, the four countries approved an agreement for the $7 billion pipeline, after a Memorandum of Understanding (MoU) was signed in December 2017.
He likened the proposed East-Med project to that of the dead Nabucco pipeline arguing that it is an expensive mistake.
'This is the EU's second Nabucco incident. The EU committed $100 million for a feasibility study [for the East Med project]. I don’t exactly know how much they have wasted on Nabucco,' he said.
The Nabucco natural gas pipeline project was based on the concept of bringing Caspian or Middle Eastern gas through Turkey to the EU, however, the project was canceled for several reasons.
According to Comert, Nabucco was an impossible project given that there was a lack of sufficient supplies. In addition, alternative gas supply sources from the Russian Federation, which were proposed several times by the Nabucco project team, contradicted the overall aim of the project to diversify away from Russia supplies and thus guaranteed its failure.
'Perhaps more important than money wasted, in my opinion, was the time wasted while opportunities to develop alternative projects were overlooked,' he argued.
The East-Med pipeline project requires very complex engineering and very strong financial support. The pipeline needs to cover a length of 2,100 kilometers and lay at a depth of 3.5 kilometers.
Currently, Israeli gas reserves do not have sufficient volumes to warrant the pipeline and the global natural gas prices are too low to guarantee an adequate return on this investment. Therefore, the project's continuance has been questioned and experts have criticized its economic viability.
Comert said the project has another significant problem because it aims to transport and sell gas around Cyprus to the EU within the so-called exclusive economic zone of the Greek Cypriot administration.
Exclusive Economic Zones (EEZ) in the eastern Mediterranean have become the subjects of dispute between the states embroiled in a long-standing political feud on the disputed Cyprus Island since the discovery of hydrocarbon resources in 2009.
Turkey and the Turkish Cypriot administration, in particular, have repeatedly said the resources around the island of Cyprus belong to both communities, and asserted that the Turkish Cypriots would not relinquish their rights to them.
'This gas cannot be exported without at least a solution to the sharing of economic wealth from the resources around the island between the Greek Cypriots and Turkish Cypriots. The maritime conflict resolution is such a complex issue and cannot be resolved without the participation of all parties in question,' Comert warned.
- Wasted years in East-Med gas
Comert also affirmed that any transport solution in the region for the transmission of Mediterranean gas excluding Turkey would not be lucrative.
The meetings held and MoUs signed between Israel, Greece, the Greek Cypriot Administration and Egypt represent lost years for the region, he said.
The alternative route for the East-Med gas pipeline is via Turkey, which is recognized and confirmed as more feasible and much cheaper several times over. This route is not only to export gas for the Turkish market but also for exporting to third countries including the EU.
However, efforts to transport gas through the much shorter pipeline route via Turkey have not yet come to fruition because of lack of progress made in discussions to date.
'Far more progress would have been made to date if the resource holders would sign an agreement with a consortium that consists of knowledgeable and experienced companies from both countries [Israel and Turkey] which would construct and operate the pipeline, book capacity and provide guarantees,' Comert said.
Comert declared Turkey's proactive East-Med policy to drill and carry out seismic exploration, while avoiding the Greek Cypriot's unilateral initiatives, as successful.
It is unthinkable that Turkey would stand and do nothing while the Greek Cypriot Administration creates a de-facto situation in which it has declared a so-called exclusive economic zone and issued exploration licenses. Therefore, Turkey as a guarantor country to the Cypriot island, needed to show its presence with its warships, seismic and exploration vessels in the region, he said.
By Muhsin Baris Tiryakioglu