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The Mediterranean Pipeline Wars Are Heating Up

The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek mainland.

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Authored by Viktor Katona via Oilprice.com:


Things have been quite active in the Eastern Mediterranean lately, with Israel, Cyprus and Greece pushing forward for the realization of the EastMed pipeline, a new gas conduit destined to diversify Europe’s natural gas sources and find a long-term reliable market outlet for all the recent Mediterranean gas discoveries. The three sides have reached an agreement in late November (roughly a year after signing the MoU) to lay the pipeline, the estimated cost of which hovers around $7 billion (roughly the same as rival TurkStream’s construction cost). Yet behind the brave facade, it is still very early to talk about EastMed as a viable and profitable project as it faces an uphill battle with traditionally difficult Levantine geopolitics, as well as field geology.

The EastMed gas pipeline is expected to start some 170 kilometers off the southern coast of Cyprus and reach Otranto on the Puglian coast of Italy via the island of Crete and the Greek mainland. Since most of its subsea section is projected to be laid at depths of 3-3.5 kilometer, in case it is built it would become the deepest subsea gas pipeline, most probably the longest, too, with an estimated length of 1900km. The countries involved proceed from the premise that the pipeline’s throughput capacity would be 20 BCM per year (706 BCf), although previous estimates were within the 12-16 BCm per year interval. According to Yuval Steinitz, the Israeli Energy Minister, the stakeholders would need a year to iron out all the remaining administrative issues and 4-5 years to build the pipeline, meaning it could come onstream not before 2025.

The idea of EastMed was first flaunted around 2009-2010 as the first more or less substantial gas discovery in the Eastern Mediterranean, the Tamar gas field in Israel’s offshore zone, paved the way for speculations about an impending gas boom. Then came the 535 BCm (18.9 TCf) Leviathan in 2010 and the 850 BCm (30 TCf) Zohr discovery in offshore Egypt five years later and suddenly it seemed that an Eastern Mediterranean gas expansion is inevitable. Yet over the years, the operators of Leviathan have already allocated part of their total gas volumes to domestic power generating companies and most notably NEPCO, the Jordanian electric power company (1.6-2BCm per year). Egypt has been concentrating on meeting domestic needs and getting rid of LNG imports, moreover once it bounces back to gas exporter status in 2019, it will only use its own 2 LNG terminals in Damietta and Idku.

Thus, a pertinent question arises – whose gas would be used to fill the EastMed pipeline? If the pipeline starts in offshore Cyprus, then it would be logical to expect that Cyprus’ gas bounty would be somehow utilized. Yet Cyprus has been lagging behind Egypt and Israel in its offshore endeavors and so far lacks a clear-cut giant field to base its supply future on. The two discoveries appraised heretofore, the 6-8 TCf Calypso operated by ENI and the 4.5 TCf Aphrodite operated by Noble Energy, are not enough to support the construction of a relatively expensive gas pipeline – all the more so as Noble has signed a provisional deal to send Aphrodite gas to Egypt’s Idku LNG terminal, most likely by means of a subsea gas pipeline. If we are to judge the viability of the EastMed on the current situation, there is only Calypso and Israel to fill the pipeline, as Greece’s gas export plans are close to zero on the probability scale.

The subsea section from Cyprus’ offshore zone to the island of Crete lies in depths of 3km and is stretched across a seismically active zone. But there is even more – should Turkey claim rights on Cyprus’ offshore hydrocarbon deposits (in February 2018 it sent warships to scare away ENI’s drilling rig that was on its way to xxx), the project is all but dead. This is far from an implausible scenario as President Erdogan stated that Turkey would never allow for the extortion of natural resources in the East Mediterranean by means of excluding Ankara and Northern Cyprus. Cognizant of the risks inherent in an East Mediterranean gas pipeline, there has been no interest from oil and gas majors to participate in the project. This is worrying as the $7 billion are expected to be financed from private investors, of which there is a palpable dearth – despite the EU’s 35 million funding to promote what it sees as a Project of Common Interest.

Yet even for the European Union, the EastMed gas pipeline presents a bit of a headache as its commissioning would render the Southern Gas Corridor, comprising so far only of Trans Adriatic Pipeline (TAP) with a 10 BCm per year throughput capacity, irrelevant by creating a sort-of competitor. The price of the natural gas to be supplied via the EastMed pipeline might become the biggest obstacle of them all – if the cost of producing offshore Mediterranean gas turns out to be $4-5/MMBtu as expected, the addition of further transportation costs to it all would place EastMed supplied at the bottom range of European gas supply options (Russian gas supply is alleged to be profitable with price levels as low as $4/MMbtu). All this might change if any of the East Mediterranean countries were to discover a giant gas field, altering the economics of production or possibly even liquefaction.

In fact, 2019 will witness several key wells being drilled across Cyprus, Egypt and possibly even Israel. ExxonMobil’s testing of Block 10 in offshore Cyprus would largely point to the overall attractiveness of Cyprus as an oil and gas producing country – the drilling has already started, with results expected in Q1 2019. The ENI-operated Noor offshore field in Egypt, adjacent to Zohr, is a much hotter prospect with BP buying into it lately – most likely it will outshine all the other drilling sites in the Eastern Mediterranean, however, if a big discovery is confirmed, it would be most likely used for Egyptian purposes which run counter to the EastMed gas pipeline. Thus, EastMed’s only hope is that Israel 2nd international licensing round, results to be announced in July 2019, will elicit a couple of Leviathan-like finds that would make pipeline construction profitable. Until then, the prospects are rather bleak.

By Viktor Katona for Oilprice.com

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You can call me AL

I smell the gas found under the Golan heights.

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Smokingeagle

And the smell from Syria’s plentiful off-shore gas and oil. Aren’t these two three-letter words what regime change in Syria, and also the threats to the Lebanon and Iran – the wars for “Greater Israhell” and resource appropriation, are all about?

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Putin’s State of the Nation Part III – Raising Russians

President Putin’s State of the Nation talk began with the most important element of any society – the family.

Seraphim Hanisch

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Parts I and II of this series outline much of Russia’s “face towards the world” in terms of both economic / trade and military matters. Part III actually comprises the great majority of what President Putin addressed in the Russian State of the Nation Address on Wednesday, 20 February. As he pledged upon his re-election to his fourth presidential term, the 66-year old leader focused primarily on domestic affairs within the Russian Federation.

The whole speech is available at Kremlin.ru, and by following this hyperlink.

We have selected excerpts along the reasoning of illuminating those parts of domestic policy in Russia that reveal why the globalist and secularist elíte in the West are so determined to block Russia’s success as a nation, even to isolate it and destroy it if possible. We will emphasize and comment on various points from the speech.

One of the biggest differences in Russia from the US is the centrality of traditional families, with children. Children are wanted and needed in the Russian Federation, and President Putin started his speech by addressing the matter of raising new Russians:

President of Russia Vladimir Putin: Members of the Federation Council, State Duma deputies, citizens of Russia,

Today’s Address is primarily devoted to matters of domestic social and economic development. I would like to focus on the objectives set forth in the May 2018 Executive Order and detailed in the national projects. Their content and the targets they set are a reflection of the demands and expectations of Russia’s citizens. People are at the core of the national projects, which are designed to bring about a new quality of life for all generations. This can only be achieved by generating momentum in Russia’s development…

Therefore, the work of the executive branch at all levels should be coordinated, meaningful and energetic. The Government of Russia must set the tone.

At the same time, I would like to emphasise and repeat: our development projects are not federal and even less so agency-based. They are national. Their results must be visible in each region of the Federation, in every municipality. It is here, on the ground, that the majority of specific tasks is implemented.

Here, President Putin seems to be alluding to the importance of nation. While Russia has a much more openly socialist style government than the US does, it is nonetheless also much more efficient in its work in many ways. Communism failed, but it did teach some lessons about how to do a lot of work with few resources. There is a reason the largest nation on earth does not have to go into huge debt year after year.

Let me now share some specifics on our objectives. I will begin with the key objective of , which means providing all-around support to families.

Family, childbirth, procreation and respect for the elderly have always served as a powerful moral framework for Russia and its multi-ethnic people. We have been doing everything in our power to strengthen family values and are committed to doing so in the future. In fact, our future is at stake. This is a task shared by the state, civil society, religious organisations, political parties and the media.

This, while states in the US are trying to pass radical abortion laws to even be able to kill babies who survive abortions.

Russia has entered an extremely challenging period in terms of demographics. As you know, the birth rate is declining…

We succeeded in overcoming the negative demographic trends in the early 2000s, when our country faced extreme challenges. This seemed to be an impossible challenge at the time. Nevertheless, we succeeded, and I strongly believe that we can do it again by returning to natural population growth by late 2023 – early 2024.

Today, I wanted to talk about a new package of measures that has already been prepared to support families.

First: It is important that having children and bringing them up do not put families at the risk of poverty or undermine their wellbeing. As you know, we have already provided for the payment of subsidies for the first two children until they reach 18 months…

Starting January 1, 2020, I propose raising the bar to two subsistence wages per family member. This is what people have requested and these requests come directly into the Executive Office. This measure will increase the number of families entitled to additional benefits by almost 50 percent. Some 70 percent of families with one or two children will be able to benefit from help from the Government.

Second: At present, carers looking after children with disabilities and people disabled since childhood receive an allowance of only 5,500 rubles. I suggest increasing this to 10,000 rubles, starting July 1. Of course, I understand that it is still a small amount. However, it will be an additional measure of support for families with a child who needs special care.

Third: The income of Russian families must, of course, increase. This is a serious task that requires a comprehensive solution. I will speak about this in greater detail later. But we need direct measures. First of all, the tax burden on families needs to be relieved. The approach should be very simple: the more children there are, the lower the tax. I propose increasing federal tax relief on real estate for families with many children. I also propose lifting taxes on 5 square metres in a flat and 7 square metres in a house per each child…

Fourth: The Government and the Central Bank need to consistently maintain the policy to lower mortgage rates to 9 percent, and then to 8 percent or below, as stipulated in the May 2018 Executive Order. At the same time, special measures of support should be provided for families with children, of course… A family making a decision to buy housing certainly makes plans for a long or at least medium term, a lasting investment. But with this [present] programm, they take out a loan, start paying the installments, and the grace period ends. The interest is actually subsidized only for the first 3 or 5 years. I propose extending the benefit for the entire term of the mortgage loan.

Yes, of course, it will require additional funding, and the cost will be rather high: 7.6 billion rubles in 2019, 21.7 billion rubles in 2020, and 30.6 billion rubles in 2021. But the programme is estimated to reach as many as 600,000 families. We certainly need to find the money. We know where to get it. We have it, and we just need to use it in the areas that are of major importance to us.

And one more direct action solution. Considering the sustainability and stability of the macroeconomic situation in the country and the growth of the state’s revenues, I consider it possible to introduce another measure of support for families having a third and subsequent children. I suggest paying 450,000 rubles directly from the federal budget to cover this sum from their mortgage. Importantly, I propose backdating this payment starting January 1, 2019, recalculating it and allocating relevant sums in this year’s budget.

Let us see what we have. If we add this sum to the maternity capital, which can also be used for mortgage payments, we will get over 900,000 rubles. In many regions, this is a substantial part of the cost of a flat. I would like to draw the attention of the Government and the State Duma to this issue. If need be, the budget will have to be adjusted accordingly. An additional 26.2 billion rubles will be required for this in 2019. The relevant figures for 2020 and 2021 are 28.6 billion rubles and 30.1 billion rubles, respectively. These are huge funds but they should be allocated and used in what I have already described as a very important area.

There is a great deal more detail on the notion of various tax breaks for families with children. It is worth a read, and it is also worth noting the very clear language set forth here. It appears rather refreshing to hear these ideas laid out in such a blunt fashion.

 

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Pressure mounts on Theresa May to agree to 3 month Brexit extension (Video)

The Duran – News in Review – Episode 181.

Alex Christoforou

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The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a look at how the EU, in coordination with forces inside the British Parliament, are pushing for Theresa May to agree to a three month “Brexit day” extension.

According to a Bloomberg, Theresa May must resign as British prime minister and Conservative leader later this year after delivering Brexit, according to politicians at the highest levels of her own government.  May has promised her party she will stand down before the next general election, slated for 2022, but she’s likely to face pressure to go within the next three months. Once the U.K. is out of the European Union, and local district elections on May 2 are over, the premier will have no reason to stay in office, one senior minister said, speaking privately. Britain is scheduled to leave the bloc on March 29.

A person familiar with another minister’s views agreed with the timescale, arguing that the prime minister should leave in the summer, so a new leader can be in place in time for the party’s annual conference in October. A third senior member of May’s administration pointed out that Tories had no way of formally seeking to remove May before December under the party’s internal leadership rules. May will never voluntarily resign, despite her previous pledge, the person said.

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Via Zerohedge

Theresa May once again failed to extract concessions from the EU27 on Wednesday after yet another meeting with Juncker (surprise, surprise) as the Continent refuses to budge on May’s demands for “legally binding changes” to the deal – specifically to the troublesome Irish backstop, which many Brexiteers fear could result in the UK being reduced to a “vassal state” of the EU by becoming interminably trapped in the customs union, with zero say over its rules. Talks between Brexit Secretary Stephen Barclay and EU27 chief negotiator Michel Barnier on Thursday were similarly inconclusive.

And with only 36 days left until “Brexit Day”, it’s becoming increasingly clear that May will need to ask her EU colleagues for an extension to the two-year negotiating period, something that would cut against her commitment to take the UK out of the EU “as scheduled”, though she has never explicitly ruled it out. According to Bloombergthe EU expects May to request a 3-month “technical extension,” which would be the first, and hopefully only, delay, (because anything further would ratchet up the pressure for the UK to participate in the upcoming European Parliament elections…an unnecessary complication).

Still, without meaningful concessions on the backstop, it’s difficult to see a way forward. Rebellious Tories and the “Independent Group” have so far focused their efforts on securing a legally-binding commitment to take a “no-deal” exit off the table. And with the deadline unlikely to be extended past this point, if a deal isn’t reached during the March 21-22 UK-EU summit, he way forward will appear impossibly vague.

But with dozens of Tories reportedly ready to rebel unless the PM offers concrete reassurances that ‘no deal’ isn’t an option, and that rebellion will likely take the form of support for an amendment tabled by former minister Sir Oliver Letwin and Labour’s Yvette Cooper to give Parliament the power to delay Brexit Day if no deal is reached by mid-March.

Meanwhile, thanks to the latest round of defections, the “Independent Group” has become the fourth-largest party in Parliament.

But all of these threats likely won’t take on real significance until the March summit with the EU, thanks to the Continent’s reputation for holding out until the last minute. Meanwhile, MPs have told the media that a vote on May’s Brexit “Plan B” deal – which had been set for next week – is unlikely.

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Trump’s Syria military pullout, not under John Bolton’s watch (Video)

The Duran Quick Take: Episode 89.

Alex Christoforou

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RT CrossTalk host Peter Lavelle and The Duran’s Alex Christoforou take a quick look at the announcement from the Trump White House that the United States has decided to station a ‘peacekeeping group’ of roughly 200 US soldiers in Syria for a ‘period of time’ after the much hyped withdrawal.

Once again we see that once the US enters a country for a regime change mission, it becomes nearly impossible to fully disengage, ultimately leaving America in the role of invader and occupier, for an indefinite amount of time.

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Via RT…

Despite President Donald Trump’s promises to withdraw American troops out of Syria, the US intends to maintain presence on the ground with a “small peacekeeping group” for an unspecified “period” of time, the White House said.

“A small peacekeeping group of about 200 will remain in Syria for a period of time,” White House spokeswoman Sarah Sanders said in a statement without elaborating.

Trump took the world by surprise back in December, when he announced the US withdrawal from Syria without specifying a timetable. The initiative was not well received in the Pentagon, even forcing Defense Secretary Jim Mattis to resign after clashing with Trump, as both the generals and politicians have been claiming that US presence in Syria is vital and that Islamic State (IS, formerly ISIS/ISIL) terrorist group would inevitably reemerge if all of some 2,000 Americans leave.

The US withdrawal is being stalled by concerns about potential Turkish incursion into the territories currently controlled by the US-backed Syrian Kurds. On Thursday, Trump had another phone call with his Turkish counterpart Recep Tayyip Erdogan on the issue. Washington wants Turkey to agree to a buffer ‘safe zone’ in northeastern Syria and is also contemplating arming the Syrian Kurds, despite Ankara’s strong opposition.

While the US continues its diplomatic maneuvering, some noted the irony, wondering if the White House was using the term ‘peacekeeping’ correctly or was even aware of what it actually means. Others questioned the logic and the motive of maintaining such a contingent on the ground, noting that 200 troops could serve as a human shield, but is unlikely to really sway the outcome of the conflict.

Traditionally, the term peacekeeping has been used to describe the UN Blue Helmets whose missions are strictly mandated by the Security Council. American troops, however, hardly have any legal basis to remain in Syria, as they had never been invited by the official government in Damascus.

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