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Israel Eyes Profit Potential of Gas Deal, But Still Needs to Overcome Hurdles, Expert Claims

© REUTERS / Marc Israel Sellem/Pool An aerial view shows the foundation platform of Leviathan natural gas field, in the Mediterranean Sea, off the coast of Haifa, Israel on 31 January 2019
An aerial view shows the foundation platform of Leviathan natural gas field, in the Mediterranean Sea, off the coast of Haifa, Israel on 31 January 2019 - Sputnik International
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The EastMed pipeline is set to export gas to the EU, generating billions of dollars in revenues for Israel, Greece and Cyprus will be completed in 2025. Before that happens, the Jewish state will need to overcome a number of challenges, including Turkey's opposition to the project and a legal battle with Lebanon over the maritime borders.

On Sunday, Israel's dream to turn into a regional energy supplier finally started to take shape after the country's government ratified an agreement inked in January with Greece and Cyprus.

Already touted as the longest pipeline in the world, with a big bulk of it expected to be under water, the 1,900 km long project will have the capacity to carry up to 20 billion cubic meters of gas yearly from Israeli and Cypriot energy fields onward to Europe via Greece

The completion of the pipeline, which will cost all parties involved around $7 billion,  is expected in 2025 and the ambitious project is set to generate billions for Israel, which is currently facing an economic crisis due to the second outbreak of the coronavirus pandemic, that has already claimed the lives of more than 400 Israelis.

United Against Turkey?

However, apart from promising to bring in significant revenue, the deal is also expected to bolster Israel's ties with other regional players like Greece and Cyprus and unite them against common challenges, one of which is Turkey.

Ankara has long objected to the EastMed deal, saying the drilling would need Turkish consent as the gas fields were located in its economic zone's waters, allegations rejected by the international community that sees them as part of Cyprus. 

After Ankara's demands fell on deaf ears, with Israel and its allies pushing ahead with the EastMed deal, Turkey signed an agreement with the UN-backed government of Libya led by Fayez Al Sarraj that granted the Turkish Republic access to its rich energy resources.

A month later, Ankara registered its new maritime borders that included all of the sea area between Cyprus and Crete, sending a message to the EastMed alliance that their drilling "was no longer legally possible" without the permission of Turkey

Although the move raised eyebrows in the international arena and angered politicians in Greece and Cyprus, Dr. Avinoam Idan, from the Chaikin Centre of Geostrategy & Centre of  Maritime Policy & Strategy at Haifa University, says the East Mediterranean project "has never had the intention to escalate relations with Turkey".

Quite the opposite was true. Initial reports suggested that until recently, Israel was in fact viewing Turkey as a transit destination through which the energy would flow into Europe. However, as a result of Israel's operations in Gaza and the 2010 Mavi Marmara incident, where the IDF killed nine Turkish nationals aboard the 'Gaza Freedom Flotilla' as it tried to break through Israel's blockade of the Strip, Turkish attitudes towards Israel quickly soured, compelling Israel to start looking for an alternative partner.

That alternative was quickly found in the face of Cyprus and Greece. Although prior to the deal, relations with the two had been kept on a low flame, partially because of their pro-Palestinian stance and partially because of Israel's unwillingness to anger Turkey, the EastMed project changed that equation, triggering a boost in trade, tourism and even military cooperation

"It was natural for these countries to deepen the dialogue between them but it wasn't supposed to come at the expense of Turkey. Ankara was meant to be incorporated. It just came out this way," said Idan.

Lebanon As a Potential Ally?

Turkey is just one of Eastern Mediterranean alliance's concerns; another is Lebanon. Israel currently doesn't have diplomatic relations with its northern neighbour and therefore has never been able to reach an agreement with Beirut over their maritime borders, and now with the pipeline deal ratified, that could present a serious legal challenge.

According to reports, the Leviathan, Israel's largest gas field, falls in 860 square kilometres of disputed territory between the Jewish state and Lebanon. Lebanese waters are also believed to contain energy reserves, the scope of which is yet to be determined

Previously, the Israeli government has held a number of talks with the Lebanese government to draw the maritime borders between them. In 2019, for example, it was reported that the two countries had agreed to sit down for negotiations but so far, no documents have been signed even if these series of meetings did take place.

"Even if an agreement is not reached, Israel can still carry out the project," said Idan, adding that it would require the Jewish state to bypass Lebanese territory.

"It won't be an easy task to achieve, primarily because the sea bottom is a tough environment to operate in and that would require special technology and greater money resources, but [if the decision to bypass Lebanon is made - ed.] the project is possible."

At the same time, the expert believes it would be much better if the two countries ended up coming to terms with one another. "When you have common interests, you don't really need diplomatic ties; and I believe the two nations can certainly benefit from a joint pipeline project, especially given the dire economic situation the Arab nation is currently in," said Idan.

With the eruption of popular protests in October 2019, the already-weak Lebanese economy has been dealt a severe blow. The value of foreign currency skyrocketed, unemployment and poverty rates have gone up, reaching unprecedented heights and pushing the country into a fiscal crisis that it hasn't seen since the 1970s, when Lebanon was mired into a bloody Civil War.

In that sense, believes Idan, the EastMed project could be a good way out for the Lebanese government; it would be; able to salvage the country, pumping billions of dollars into its economy.

The only trick, says the expert, is dealing with Hezbollah, which Israel regards as a terrorist group; the organisation is very influential in Lebanese politics. "Lebanon is not really a sovereign state, in the sense that its actions are controlled by the Islamic group," he explains.

Given its links to Iran and animosity towards Israel, Hezbollah doesn't see an agreement with the Jewish state as a viable option, bogging down any progress in talks.

But as public pressure keeps mounting and as calls to get rid of Hezbollah pile up, especially given the fact that Lebanon now needs to withstand the burden of US sanctions imposed to curb the threat of the Shiite militia, Beirut might realise that making money is a more fortuitous option than keeping the country's old conflict with Israel alive.

"Before the eruption of the First Lebanon War [in 1982 - ed.], Israel enjoyed from warm ties with its northern neighbour. And I believe we can still overcome current difficulties and reach an understanding, especially if the EU [that's interested in the project to minimise its dependency on Russian gas - ed.] will put pressure on Lebanon to make that happen; and especially now, when Chevron [an energy giant that will be handling the EastMed project - ed.] entered the game. I remain optimistic."
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