Key Takeaways
➢ The signing of multiparty agreements expedites the establishment of the Eastern Mediterranean Gas Hub, likely fostering regional Stability, multiple countries being involved in renewed economic and energetic cooperation.
➢ Egypt and Italy are very likely to consolidate their position in the region, benefiting from the pre-existing infrastructure for Liquefied Natural Gas.
➢ Cyprus and Isreal are likely to continue their export to Egypt, due to its inability of meeting domestic demand with domestic production. Nevertheless, Cyprus and Israel are unlikely to bypass Egypt’s infrastructure to access the market.
➢ Türkiye is likely to try to undermine and obstruct the process as done in the past, Ankara being excluded by several agreements.
Latest Development
The establishment of the Eastern Mediterranean Gas Hub and Egypt’s role as a regional energy hub are one step closer to their establishment as of February 17, 2025.
On this day, during the opening of the Egypt Energy Show (EGYPES), Ente Nazionale Idrocarburi (Eni) and TotalEnergies signed a Host Government Agreement (HGA) with the Republic of Cyprus and the Arab Republic of Egypt for the fast development, exploitation and export of Cypriot natural gas from Block 6 of the Cypriot Exclusive Economic Zone.
This signature is coupled by the agreement between Cyprus, Egypt, and the consortium of Chevron, NewMed Energy, and Shell to develop the Aphrodite gas field, signed on February 14, 2025.
Background
In 2022, a trilateral Memorandum of Understanding (MoU) was signed between the European Union, Egypt, and Israel. The MoU aimed to enhance Israeli natural gas exports to Europe through Egyptian Liquefied Natural Gas (LNG) infrastructure, particularly the Damietta plant. The renewed goal was to increase Egyptian LNG exports to the EU.
The MoU reacted to the failed establishment of the Eastern Mediterranean Gas Pipeline (EastMed) due to high costs, technical challenges, and geopolitical tension over several maritime disputes. The project has been criticized, and its realization has become very unlikely due to the withdrawal of US support for the project, the exclusion of Türkiye from the East Mediterranean Gas Forum (EMGF), and its assertive politics over the Eastern Mediterranean maritime zones.
Gas discoveries date back to 2009 and 2010 – Tamar and Leviathan fields off Israel’s coast – and 2012 and 2020 – Aphrodite and Cronos fields in Cyprus’ EEZ. Despite these findings, it is very unlikely that Israel and Cyprus can develop their reserves independently due to the severe lack of export infrastructure and the infeasibility of domestic exploitation due to market constraints. The Tamar field has been used by Israel to reduce its energy dependency on Egypt – a net energy importer before 2018. Nevertheless, the exploitation of Leviathan has been made possible only by the 2016 Jordan-Israel official agreement, which enabled gas exports to Amman, as the reserve’s size made it economically viable only if exports were facilitated.
As neither Cyprus nor Israel has any energy export infrastructure on its own, gas reserves lack commercial viability without export-generated profits. Egypt has taken advantage of the evolving geopolitical scenario to position itself as the leading regional hub, leveraging its existing infrastructure, regional divisions, and shared threat perceptions over Türkiye.
Intelligence Assessment & Strategic Implications
- The new signed agreement will almost certainly allow Cyprus to export and develop its gas reserves, transforming the country into an energy exporter. The Eni-Total consortium will make a final decision on how it will extract and convey the gas before the summer this year. Based on similar activities in the area, it is very likely that the gas will be transported via pipeline. Concerning the Aphrodite gas field, the newly approved Development and Production Plan (DPP) of the Chevron-led consortium foresees a Floating Production Unit (FPU) and a pipeline for gas exports to Egypt.
- Egypt will very likely play a leading role in Europe’s energy supply in the near future, having capitalised on the failure of the EastMed pipeline to carve out a prominent position in the regional energy landscape. Thanks to these new agreements, Egypt is very likely to stabilise its energy market, becoming a reliable supplier for the European market as well as for its Middle Eastern partners, such as Jordan, Syria and Lebanon.
- It is likely that Israel’s export continuity will be facilitated, due to Egypt’s domestic production inability to meet internal demand. This interdependency between Israel and Egypt is likely to favour regional stability in the Eastern Mediterranean. It is relevant to underline that Israel and Cyprus will be very unlikely able to develop capabilities to circumvent Egypt’s energy infrastructure.
- Turkish assertiveness in the Eastern Mediterranean is likely to increase. Türkiye has previously obstructed and delayed drilling operations off the coast of Cyprus, notably by deploying naval vessels within Cyprus’ EEZ to block Eni’s activities in Block 6, which ultimately led the Italian company to partner with TotalEnergies. The assessment on Turkish future manoeuvres is built on the frequency of similar instances in 2020 and 2022. The 2019 MoU signed with Tripoli, expanding its EEZ claims on an area overlapping Greece’s continental shelf, including waters near Rhodes and Crete, further fosters the assumption.
- Italy, but most importantly Eni, will very likely be favoured by the realisation of this agreement, making Eni a pivotal actor in the Eastern Mediterranean and reinforcing the Italian position as an energy hub for Europe. Indeed, the Italian company holds a 50% interest in Block 6 and Block 8, as well as stakes in Blocks 7 and 11. Moreover, Eni operates in the Zohr gas field through Belayim Petroleum Company (Petrobel), a 50:50 joint-venture between Eni and state-owned Egyptian General Petroleum Corporation (EGPC); and it also has a 50% interest in the Damietta plant. Likely future reserve discoveries will flow to the LNG conversion plant, increasing gas supply to Egypt and almost certainly strengthen Eni’s role in the region.
Conclusion
The newly signed agreements make highly likely the establishment of the Easter Mediterranean Gas Hub. Egypt will almost certainly solidify its role as the region’s energy hub, likely favouring the European energy diversification goal, benefiting from its strategic location and pre-existing infrastructure. Nevertheless, the heightened geopolitical tension in the region due to the Israel-Palestinian conflict and Türkiye’s assertiveness and maritime claims underscore a certain degree of unlikelihood for Egypt to be a long-term reliable supplier. Lastly, Italy will very likely be able to secure access to crucial reserves and reinforce its role as European energy hub.
Osservatorio Strategico Mediterraneo Allargato 