Over the last three decades that began with the collapse of the Soviet Union, NATO has sought to expand in Eastern Europe, taking advantage of the erosion of Russian power.
However, Putin's Russia quickly sensed the danger and began planning to regain what it had lost. Meanwhile, Moscow has been expanding its spheres of influence and influence within Europe and its economies, especially in the field of energy, specifically natural gas.
Therefore, Europe found itself a little confused in the arena of the recent Ukrainian war. Despite the firm support of the countries of the Great Continent for the Ukrainians, voices opposing a boycott of Russia are still present in the corridors of Brussels, and the Russian gas share of 40% of Europe’s needs is still waiting to be compensated in a way Guaranteed and sustainable.
Before Russia rushed to Ukraine, Washington realized the danger of Russian gas dominance, and sought to find alternatives to it, one of which was the repricing of American gas to make it more competitive with its Russian counterpart, signing contracts with gas-rich Azerbaijan close to Europe, and forming a new secure bridge to transport gas without becoming a futuristic way to blackmail Europe.
At the heart of that equation, attention turned to the eastern Mediterranean, which has become the focus of a geopolitical storm between the countries bordering on it from three continents, especially after successive gas discoveries at its bottom over the past two decades.
All the countries of the eastern Mediterranean have sought to become a major energy corridor, and while Cairo was theoretically the least likely to win a project that would transport gas in the Israeli occupation state to Europe, in exchange for greater chances for Turkey and Greece, which is closer to Israel and Europe together, it seems that the European Union has finally settled on Egypt and on liquefaction of gas instead of transporting it through expensive lines;
It is a choice linked to the lessons of the Ukrainian war, as we review in this report.
Turkey, Egypt and Israel.. Calculations of power in the eastern Mediterranean
For many years, Turkey has been the most prominent candidate to play the largest role in the world of gas transportation to Europe because of its strategic location, which made it mediate between Russia and Azerbaijan, which is rich in oil and gas, and between energy-hungry Europe. Hence, Turkey has already inaugurated the Baku-Tbilisi-Ceyhan pipeline in the past decade. Through Azerbaijan, Georgia, Turkey and then Europe.
Turkey's importance in the energy market increased after that, which made it embrace more cross-border pipelines through its territory, and when Moscow reduced its gas imports, and Azerbaijan announced that it has reserves of natural gas that suffice its neighbors and Europe, and it can be transported by the "Southern Gas Corridor" passing through Across Turkey, major powers' considerations aligned with Ankara's regional interests in order to break Moscow's hegemony.
Although the general position seemed to favor Turkey in the Caucasus arena, the situation in the eastern Mediterranean did not go as desired by Ankara, as gas discoveries ignited disputes regarding the demarcation of maritime borders, and the political conflict between Egypt and Turkey aggravated after 2013. And after the establishment of the "Eastern Mediterranean Gas" forum. late 2020, with the participation of seven countries, led by Egypt and the Israeli occupation state, which Ankara considered a hostile alliance targeting its maritime rights and excluding them in the future from the energy scene in the eastern Mediterranean;
Turkey headed towards getting out of the actual “pincer” launched by the Egyptian-Israeli gas alliance, establishing a foothold on the coasts of western Libya when it signed the agreement on the demarcation of the Turkish-Libyan maritime borders, and therefore it maintained its presence, especially after its support for the Government of National Accord and the repulsion of Haftar’s attack on Tripoli two years ago.
Israel, in turn, was concerned about the Turkish-Libyan agreement, as the agreement cut off any Israeli pipeline that wanted to reach Europe, and made it subject to the approval of the two countries.
While Egypt was prepared to provide solutions by receiving Israeli gas, and then sending it via tankers to European ports, the occupying power did not welcome Egypt's entry into this file, as it is one of the "unsecured" countries in the long run, despite the good relations at the present time.
Then Tel Aviv excluded Egypt from the EastMed pipeline project, which included Cyprus and Greece, fearing that Cairo would turn into a regional center, or become the main outlet for gas from the Mediterranean to Europe, and then its political situation would change in a manner contrary to Israel's interests.
Although the Israeli plan required the exclusion of Egypt and Turkey together from the “EastMed” project, which allowed the transfer of 11 cubic meters of gas annually, the costs of the Israeli project would have been much lower if the pipelines were directed to the Turkish city of Mersin, which is only 120 kilometers from the shores of Palestine. Occupied, in return for 1900 km the line will travel in deep waters to the Greek coast, considerations that prompted Turkish President Recep Tayyip Erdogan to open a new page with Tel Aviv and express his willingness to cooperate with Israel to transfer its gas to Europe, given that the economic interest What Ankara wants, and will benefit Tel Aviv at the same time, can be achieved away from the outstanding political files due to Turkey's support for the Islamic Resistance Movement "Hamas" in the Gaza Strip.
However, Israel accepted the difficult solution and moved forward with the "EastMed" project, at a huge cost of about six billion euros, in exchange for remaining safe from the fluctuations of relations with Turkey or Egypt.
Here, the United States welcomed the project before the outbreak of the Russian-Ukrainian war, but quickly returned and lifted its hand completely, then came Brussels' decision in the end and its choice of Cairo to become a regional center for the transfer of energy to it.
Why Cairo?
Before Egypt, the European Union and Israel signed the Memorandum of Understanding to export natural gas to Europe through Egypt, Turkey believed that Israeli gas would not be able to reach the shores of Europe except through its lands, especially after blocking the “EastMed” project and reviving hopes again that Turkey would obtain an agreement to extend gas pipelines to Europe, but Turkey’s exclusion came mainly because the European Union was not ready to entangle itself again in a semi-monopolistic network that relied on one state that would fluctuate in its relations with it, as happened with Moscow.
Therefore, Brussels considered that Turkey has a good control over the gas pipelines coming to it from Azerbaijan, and the possible pipelines from Iran if a new nuclear agreement is concluded with it, and that the Mediterranean gas should belong to another party to diversify the sources of supply.
According to those calculations, there was no great disagreement between the allies over the goal, but the disagreement was over the method, including the timing, and while the European Union proceeded to implement the "EastMed" project with an Israeli vision that excluded Egypt and Turkey, the American desires in the latter hindered the project.
Washington saw that EastMed would become a major source of tension in the eastern Mediterranean, and in the worst circumstances, the project might push Cairo and Turkey in the future to redraw their regional role through a maritime border demarcation agreement, and perhaps coordination and rapprochement if political differences between them were resolved, which is a scenario She doesn't like seeing it in that area, especially given the heavyweights of both countries.
While Turkey and Egypt pursued the volatile landscape, Moscow pounced on Ukraine, prompting the West to seek a quick settlement in the eastern Mediterranean to reduce the risks of threats to the European Union if Russia carried out its threat to cut off gas supplies.
So, Washington and Brussels had no choice but to abandon the difficult and elusive "EastMed", which was planned to enter service in 2025, a time relatively far away that Europe cannot wait to reach in light of the uncertain future of the coming winter.
Moreover, the proposed pipeline routes pass in waters that Turkey considers part of its economic waters, which puts Washington’s allies in a confrontation and the possibility of an escalation with Ankara, not to mention that the economic feasibility of “EastMed” remains low because it is costly and useless, as she stated. US Under Secretary of State.
Faced with Israel's failure to export gas on its own due to infrastructure obstacles, the battle for the Eastern Mediterranean ended with the United States and the European Union placing their bets on Cairo.
Egypt's preferential geographical location contributed to reaching the agreement, with its possession of an inexpensive ready-made infrastructure to liquefy gas and transport it liquefied without the need for pipelines, as well as the existence of the old gas pipeline connecting it with Israel since 2008 to transport Israeli gas to it.
In addition, the two Egyptian gas liquefaction stations in the cities of "Idku" and "Damietta" overlook the sea directly, which facilitates the transfer of gas to Europe via the Mediterranean.
Does Egypt benefit from the gas wars?
Egyptian Minister of Petroleum and Mineral Resources Tarek El Molla (sitting center), Israeli Energy Minister Karen Al-Harr (sitting right) and European Union Energy Commissioner Kadri Simpson (sitting left) sign the Memorandum of Understanding for the Export of Natural Gas to Europe via Egypt, June 15, 2022. (Reuters)
The atmosphere of the signing of the tripartite agreement, which was attended by Egyptian President Abdel Fattah al-Sisi, was accompanied by a great publicity buzz, which was heightened by the announcement by the President of the European Commission to provide 100 million euros in immediate aid to Cairo to face the food and price crisis, with three billion euros in funding to support local projects.
In what appeared to be a reward in exchange for securing gas for Europe, in conjunction with Russia's decision to reduce gas supplies to Germany by 40%, to pump 100 million cubic meters per day instead of 160 million cubic meters through the Nord Stream pipeline.
Egypt currently exports 500 million cubic feet of natural gas per day to Europe, according to Egyptian Oil Minister Tarek El Molla, a much lower share than its Russian counterpart, which exceeded 5 trillion cubic feet.
In light of the talk about the doubling of gas prices, Cairo’s financial gains are still shrouded in ambiguity, as local consumption amounts to 5.8 billion cubic feet per day, and represents 80% of production, and the terms of the tripartite agreement have not yet been announced, and therefore Egypt’s status as a partner The revenues will be divided by transporting the gas coming from the occupied territories. It is not clear, and it is not yet known whether the government will buy and sell it, or the profits will be limited to the liquefaction and transportation commission.
The surprise here is that the liquefaction plants that were considered the basis of the agreement are not entirely Egyptian, as the Spanish company Union Fenosa acquires 80% of the “Damietta” plant, and the remaining percentage is divided equally between the state-owned Egyptian Natural Gas Holding Company “EGAS” and the Egyptian General Petroleum Corporation. .
Similarly, the "Idku" station is owned by the government by only 12%, and the Egyptian company "EGAS" is owned by the same percentage, while it is owned by "Shell" by 35.5%, the Malaysian company "Petronas" by the same percentage, and finally the French "ENGIE" by 5%.
Despite that, it seems that Egypt will come out profitable in any case, given that the country earned during the first months of this year four billion dollars in gas export revenues, which is equivalent to the profits of the whole of last year, an increase of 768%, which means that profits increased by eight times because of the war.
The government plans to use these profits to revive the Egyptian economy and attract more investments in the ports and energy sectors, but the geopolitical dimensions of the agreement are no less important than its economic benefits. That the Ukrainian war ravages these ambitions, and leads the sails to the shores of Cairo, for the time being, at least.