The Eastern Mediterranean gas play extends across the offshore areas of Lebanon, Israel, Palestine, Egypt, Cyprus and, by its own insistence, even Turkey. The next phase of commercial development is incredibly complicated given the interplay of petroleum geology, national policies and regional politics, competing energy markets (local gas versus global LNG), existing infrastructure and corporate strategies.
The first phase of regional play development focused on pipelines to domestic markets, all within national boundaries; Tamar and Leviathan Phase 1 gas to Israel and Zohr gas into the offshore Egyptian gas grid. Subsequently, new discoveries and successive phases of field development either exceeded local market needs, encountered ill-defined marine borders and overlapping political claims, and for the major investors, market conditions went against corporate strategic priorities and expectations of profitability. Local market demand for natural gas offered modest growth and/or less competitive natural gas pricing and before the current global gas crisis the near-term LNG market prospects were challenged by an over-supplied global market, at least through 2025.
Then Russia invaded Ukraine, and the need to replace Russian gas in Europe became a huge energy security priority for the continent. LNG was the only alternative with dramatically higher pricing and volume opportunities. Now, existing infrastructure favors future East Med gas development involving offshore Cyprus and Israeli natural gas, centered around Egyptian offshore infrastructure, domestic market needs and LNG export capacity. The next three to six months will tell the tale.