Southeastern Mediterranean Hydrocarbons

7/29/2019 Southeastern Mediterranean Hydrocarbons

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SoutheasternMedi ter ranean

Hydrocarbons

A new Energy Corridorfor the EU?

April 2012

Author:Harris A. Samaras
mailto:[email protected]:[email protected]://www.pytheas.net/


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Contents

Forward 4

The Golden Age of Natural Gas 5

EU and Natural Gas 6

Introduction 8

Imports (and Pipelines) to Europe 9Solution to EU NG Shortage 14

SE Mediterranean NG Exploitation 17

The East Med Pipeline? 20

Scenario Optimum 23

Scenario Optimum Chart 25

New Natural Gas Map Europe 26

The Geopolitical Dimension 27

Challenging Considerations 30The EU Role and its Importance 32

Conclusion 34

Appendix I Gas Appendix II MiddAppendix III Worl

Appendix IV WorlAppendix V WorlAppendix VI Fuel Appendix VII EU EAppendix VIII PhysAppendix IX MedAppendix X EastAppendix XI Ener

Appendix XII SourAppendix XIII AbouAppendix XIV Abou
http://www.pytheas.net/


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Forward

The (a) confirmation of significant quantities of hydrocarbons in Cyprus, (b) thescientific estimates of equally significant quantities in the south and southwest of theGreek island of Crete and (c) the officially declared increased cooperation betweenCyprus, Israel and Greece to jointly exploit their hydrocarbon deposits may prove to be

a tremendous opportunity not only for Cyprus, Greece and Israel but for the EU as awhole.

Combined sources from qualified institutions (i.e., The U.S. Geological Survey,BEICIP/FRANLAB, the Institut Franais du Ptrole) and entities of science (i.e., Paperby Bruneton, Konofagos and Foscolos titled Cretan Gas Fields A new perspectivefor Greeces hydrocarbon resources) estimate that the Levantine Basin, the Nile DeltaCone, the Eratosthenes Continental Block, the Herodotus Basin and theMediterranean Ridge, may hold more than 50 trillion cubic meters (tcm) of natural gas.

Could this lead into the making of a new energy corridor for the EU? Can Cyprus andGreece become a guaranteed primary gas source and transit route to the EU?


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The Golden Age of Natural Gas

The International Energy Agency (IEA)forecasts that by 2035:

Global primary natural gas demand willamount to 5.1 tcm;

An increase in production equivalent toabout three times the current production ofRussia will be required to simply meet thegrowth in gas demand;

Cumulative investment in gas-supplyinfrastructure will be around6.2 trillion;

Trade between the main world regions willmore than double, with the increase of

around 620 bcm split evenly betweenpipeline gas and LNG; Natural gas production will increase

significantly in all regions except Europe.

World energy demandby fuel

Source: International Energy Agency


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EU and Natural Gas

According to Eurogas the share of natural gas inthe EU is expected to reach 30% of the primaryenergy consumption in 2030 while demand forthe same period will increase by 43%.

Domestic production however will decrease. Atend-2010, European production accounted for59% of supplies to EU gas markets and isexpected to drop to a third by 2020 and to afurther quarter by 2030. By 2015 a substantialgap emerges between demand and supplycoming from European production or importedfrom outside Europe.

The European gas industry must focus its gasprocurement especially for the period after 2015.

EU-27,Natural Gas demand outlook by sector

Source: Eurogas

Sector (Mtoe) 2010 2015 2020 2025 2

Commercial& Residential 180 187 191 193

Industry 128 137 145 150

Powergeneration 158 181 209 226

Others 493 535 578 603

Total 959 1,040 1,123 1,172 1


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EU and Natural Gas

For the depending on imports European natural gasindustry, the sufficient gas reserves available in themedium to long run are in countries which are NOT soaccessible in terms of transmission distances, or exist

in fields that are increasingly difficult to develop (withthe consequence of rising production and transportcosts).

Taking into account the growing gas demandworldwide and the decreasing indigenous productionin Europe, it will require huge efforts and substantialinvestments of the suppliers to mobilize this gas intime. Besides, when assessing supply options, it has

to be kept in mind that competition for supply willbecome far stiffer especially from North America andthe emerging economies of South-East Asia.

EU-27,Import dependency from outside Eu

Source: Eurogas

4148

6068

71

0

20

40

60

80

2005 2010 2015 2020 2025

%


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Introduction

The vulnerability of the EU to energy supply risks is a fact but thismay be no more. If the most conservative data is taken into accountin regard to the natural gas reserves discovered and estimated toexist within the exclusive economic zones (EEZs) of Greece and

Cyprus but also within the immediate region to the west and southand southeast of Cyprus in the Eastern Mediterranean, for the firsttime ever in European energy history, the EU may be guaranteed anuninterrupted supply of a traditional energy source.

The latest valid scientific estimates of the existence of hugehydrocarbon deposits south and southwest of the island of Cretecomplete the puzzle of a new East Mediterranean energy corridor toEurope and make the discussion of an Israel-Cyprus-Greece

pipeline to mainland Europe, the East Med pipeline, more currentthan ever. Especially when critical year 2020 for the EU is aroundthe corner...

Location of mud flow volcanVolcanic Arc), Nile Cone andSource: Bruneton, Konofago

Eastern Mediterraand anticipated hy


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Imports (and Pipelines) to Europe

Natural gas in Europe is provided from indigenous sources andfrom pipeline and LNG imports. The main sources of indigenoussupplies are concentrated at its northwestern part, mainly in the UKand the Netherlands. About 55% of Europe's primary energy is

imported and roughly 2/3 of the NG supply in the EU comes fromimports.

The bulk of imports come from Russia, Norway and Algeria. Russiaholds the largest share of EUs natural gas imports, with annual gasvolumes exceeding 100 bcm p.a. for the period 2007 to 2010.

Although the volume of NG imports from Russia has not changedsubstantially, its share of imports has fallen over the past decade.Russian gas is exported to Europe through pipelines via Ukraine

(127 bcm capacity) and Belarus (28 bcm capacity). The state-owned gas company Gazprom has a monopoly on gas exports fromRussia with sales of 156 bcm of natural gas to the EU-27. Source: Eurostat

EU-27, Natural G

47.7

22.821.2

33.3

28.7

14

33.0

27.8

-5.0

5.0

15.0

25.0

35.0

45.0

55.0

Russia Norway Alge


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Norway with an annual production of 90 bcm is thesecond largest supplier of NG to continental Europe;almost all of its gas export is directed to the EU market.Indigenous production in the EU-27 mainly comes from

the Netherlands and the UK.

Natural Gas imports from North Africa are madethrough Italy and Spain with a connection between

Algeria and Spain, and two connections from Libya andAlgeria to Italy. Algerias exports to Europe by the newlycompleted Medgaz pipeline (8 bcm per annum) toSpain; the 8 bcm per annum Galsi pipeline via Sardiniato Italy is expected to be completed within 2014. The

Trans-Mediterranean pipeline (Algeria to Italy viaTunisia and Sicily) is operational since 2008 (with acapacity of 6.5 bcm per annum).

Na

S

North Sea NGpipelines to EU-27

Source: NPD


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The Nord Stream pipeline through the Baltic Sea (and through thewaters of five countries) is the most direct connection betweenRussia and the EU. Line 1 inaugurated end-2011 has the capacityto deliver up to 27.5 bcm per annum. When Line 2 is completed

(expected towards end-2012), the twin pipelines will have thecapacity to transport an annual combined total of about 55 bcm.

The planned to commence in 2013 South Stream pipeline, formRussia to Bulgaria across the Black Sea and then to split towardsCentral Europe and Italy via Greece is expected to have athroughput capacity of up to 63 bcm.

The Nabucco pipeline (25 bcm capacity), is designed to transport

natural gas from the Caspian Sea and later the Middle East viaTurkey to Europe (to Bulgaria, Romania, Hungary and Austria). Themain supplier is expected to be Iraq with potential supplies from

Source: Gazprom

Major Russian NG


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Azerbaijan, Turkmenistan and Egypt. There are doubts concerningthe viability of supplies. Also the changed political situation, regionalvolatility and competing projects make the viability of the projectdoubtful. Most importantly the dependence on politically volatile

and unpredictable Turkey, an ally to Iran and a doubtful to the EUally are a source of on going controversies and considerations.

Part of the EU-27 gas imports is covered by LNG shipments. LNGimport capacity is unevenly distributed across the EU with themajority of it accumulated in a handful of countries. At end-2011,twenty one LNG terminals were in operation in Europe with a totalnameplate capacity of 182 bcm; twelve of these terminals havebeen brought into service in the last decade. Currently, four

additional LNG terminals are under construction in Spain (El Musel,Gijon), Italy (Brindisi and Livorno) and Poland (winoujcie). Thesestations are scheduled to add a further 15 bcm to EUs import

Source: Wikipedia

The Nabucco andto Europe


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capacity by mid-2013 to 2014.

Amongst the EU member-states, the United Kingdom and Germanyare the largest consumers of natural gas, followed by Italy, France,

Netherlands, Poland and Spain.

Origin of NG imports across the member states varies. Germany,imports the vast majority of its gas volumes from Russia as do alsomost of the EU member states of Eastern Europe. France and Italy,however, have developed a rather extensive network that allowsdiversified gas inflows from Norway, Russia, Algeria and theNetherlands. The UK mostly imports from Norway and theNetherlands whereas Spain imports most of its natural gas from

Algeria followed by Qatar, Egypt and other.

93.6

88.5

75.585.384.9

7

0

10

20

30

40

50

60

70

80

90

100

Note: Provisional data for 2was 491.5 mtoe and 460.4 Source: Eurostat

EU-27, Gross Inla


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Solution to EU NG shortage

The annual NG consumption of the EU amounts to about 500 bcm.Almost half of it is imported from Russia, 160 bcm from Algeria and90 bcm from Libya. By 2020 the demand for natural gas in Europewill increase by another 225 bcm. The total energy deficit (Oil &

Gas) of the EU will therefore reach 845 bcm. These EUrequirements for NG can neither be satisfied by Russia which has44 tcm of NG resources and an annual production of 600 bcm as2/3 of its reserves and production are allocated for domestic uses,nor by Algeria and Libya as their reserves amount to only 6.2 tcm.

According to the USGS, besides the NG deposits alreadydiscovered in Egypt and Israel (~3 tcm), the deposits that lie in theEEZs of Cyprus, Israel and Egypt alone are conservatively

estimated to another 10.8 tcm.

This brings the total of proven and potential reserves to 13.8 tcm,

Eastern Mediterra

Source: Papanicolaou et. al


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an amount that is almost 12 times more NG than what Europeexpects to receive via the Nabucco Pipeline (1.2 tcm). If 3 tcm isgenerously subtracted in order to satisfy the domestic needs ofCyprus, Israel and Egypt over the next 30 years, the remaining

amount of 10.8 tcm could satisfy the EUs energy needs by 2020 for35 years!

Bruneton, Konofagos and Foscolos in their paper of March 2012with the title Cretan Gas Fields A new perspective for Greeceshydrocarbons claim that the hydrocarbon deposits that lie southand southwest of the island of Crete are huge; and maybe biggerthan those in the Levantine Basin. The valid authors dare to statethat within the EEZ of Greece there may be as much as 51 tcm of

natural gas! If Bruneton, Konofagos and Foscolos are correct withtheir scientific interpretations and estimates and if for the sake of

Sci

KonFosthemunat

Gre
http://www.pytheas.net/docs/20120330%20Cretan%20Gas%20Fields%20-%20A%20new%20perspective%20for%20Greeces%20hydrocarbon%20resources%20.pdf


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argument only half of those are taken into consideration asexploitable, the say 25 tcm of Greece and the aforementioned 10.8tcm that lie within the EEZs of Cyprus, Israel and Egypt, (note thatthe amounts required to satisfy domestic needs have been

generously subtracted), a total of 35.8 tcm could satisfy the EUsenergy needs by 2020 for 120 years!

Valid questions arise over and above the several scientific,engineering, economic and geopolitical ones: Shouldnt the EU bemore actively involved in the efforts of its member countries, Greeceand Cyprus? Isnt this for the EU a project of Pan -European interestthus include it in its energy policy, coordinate and assist withtechnical knowhow but also with political leverage and other? As

critical year 2020 is around the corner, arent the already scientificinterpretations important enough to accelerate the EU think tanksand policy institutes view on the whole issue?

The scieestimate

depositsthe EEZCyprus,satisfy Eneeds bleast 12


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SE Mediterranean NG Exploitation

Although too early to deduct a final conclusion since, (a) Greece has not yet performed relevaareas around Crete and South Aegean Sea, (b) Greece has not yet commenced exploration inSeas, and (c) Cyprus has not yet completed its hydrocarbon exploration activities, the followingconsidered for the exploitation of the natural gas deposits in the Southeastern Mediterranean:

Should natural gas be exported out of Cyprus after liquefaction? And what about Cretan an

Although LNG may not be a perfect solution it offers market flexibility and potential shipmehigher and it is considered a less risky method for monetizing large amounts of natural gasmajor upfront cost for the construction of a liquefaction plant, LNG costs significantly more financiers of LNG investments may want to see a medium to long term commitment to buy new project. And for any LNG plant to be truly profitable, it would need double the amount oexist in the Aphrodite gas field, and unless more gas is confirmed within the Cypriot EEZ o

are guaranteed such venture remains a question.

In terms of the Cretan natural gas things are simpler as the choice can only be one, a pipe


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mainland Greece and then via Italy to the rest of Europe.

With Israel though the puzzle is a bit more complicated especially after an Israeli inter-minireleased an interim report on energy policy which amongst other recommends that natural

should be located only in areas under Israeli control. The best option for Israel would be toa liquefaction plant in Cyprus for both economic and security reasons. The Leviathan field iIsrael and as Cyprus is an EU-member state Israel would benefit from preferential terms focountries as well as EU grants.

Should natural gas be exported out of Cyprus via a pipeline? And what about Cretan and Is

One option would be the construction of a pipeline from Cyprus to Turkey and then to contithe cheapest solution, Turkeys continuing violation of international law and human rights in

unattainable. It would be impossible to convince the Greek-Cypriots to entrust their most vacountry that still illegally occupies almost 37% of their land despite the numerous UN Secu

Assembly and Council of Europe resolutions calling amongst other for Turkeys withdrawal


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The other option would be to be sending the Cypriot gas via pipeline to Israel and feed intoconnects Egypt, Israel, Syria and Lebanon (projected in the future to be linked to Turkey). Opipeline security issues, the volatility in the region, at least at present times, forbids conside

Another option would be the construction of an Israel-Cyprus-Greece pipeline and then to the East Med pipeline. A challenge that is feasible but costly and it can only be justly assesconcluded and additional natural gas deposits are confirmed. If however the scientifically eexist, it is undoubtedly the best long term option and solution, not only for the countries invosolution which will liberate the EU from its energy dependence on volatile or at period hosand the transportation mean will be owned and controlled by EU-member countries alone. would strengthen Europes negotiating tools in the markets...

Bearing in mind that a pipeline would anyhow have to be constructed from the Cretan gas f

challenging part of such project would be the construction of the pipeline between Cyprus astretch of 675 kilometers at depths of about 800 to 2000 meters. In the longer term, the Easfeed from the Arab Gas pipeline, Iraqi and Arabian Gulf gas fields.


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The East Med pipeline?

As per the map across, points A in Cyprus and H in Israelrepresent the origination of the East Med pipeline system; at pointC, the pipeline reaches Crete; E, mainland Greece and F exitsGreece to Italy (G) and to the rest of Europe. At point F, the

Pipeline could also connect with the planned South Stream one.

The most costly part of the pipeline would be between the offshorepoints of B and C. The distance between the islands of Cyprusand Crete (points B to C) is about 675 kilometers and the depthswithin this distance vary from 800 to about 2000 meters. The depthof 3000 meters could be avoided if the pipeline bypasses theHerodotus Abyssal Plain which in certain places is about orexceeds 3000 meters. The total map distance between A to G +

B to H is about 1880 km. Approximately, 330 km of the pipelinelies within the EEZ of Cyprus, 1250 km within Greeces (approx.635 km onshore), 80 km within Italys and 220 km within Israels.

The East Med pip

Source: Pytheas Limited; So


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There is no doubt that the trilateral pact between Israel, Cyprus andGreece will play a key role for the energy security of the EU andthe energy transportation to Europe. It will provide a third alternativeenergy corridor to the monopolizing by Russia, Nord and planned

South Stream corridors (and pipelines). But what about the cost ofthe East Med pipeline?

Roughly, the construction cost of a pair of 32 pipelines from Cyprusto Crete at depths of around 2000 meters is likely to be around $25million per kilometer and to reach a 1 tcf p.a. (or about 28 bcm p.a.)capacity, the estimated capital cost for pipelines from Cyprus toCrete would be around US$20 billion. A significant amount but notprohibitive if the estimated deposits of a lot more than 50 tcm do

exist...

The E

will pEU eand aRussand S

pipeli


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Source: IFRI Modified by: Soil, Water & Life Solutions

The E

providenergEU aneed sourc

pipeli


S i O i


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Scenario Optimum

Up until more hydrocarbons are confirmed in Cyprus and Greece,Cyprus will have to move swiftly with the construction andcommissioning of the LNG onshore facilities, i.e. terminal, storageand liquefaction plant. Also pipelines connecting the Aphrodite gas

field and Israeli ones with the terminal have to be designed and laid.

Up until the liquefaction pant is constructed, the export of theEastern Mediterranean NG surplus can by facilitated viacompressed natural gas vessels (CNG) loading directly from theoffshore field floating production systems to EU ports. Roughly, all-in costs of shipping including capital costs would be around$3/MMBtu when average current market prices to European endusers are $9/MMBtu.

In the short- to medium-term and after the liquefaction plant isoperational, NG can be transported to the EU via the more efficient

The East Med NG

Source: Pytheas Limited; So

S i O ti


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Scenario Optimum

LNG vessels (CNGs volumetric energy density is estimated to be42% of LNGs).

In the long-term, following further offshore discoveries in the region,

the building of a pipeline system to transport natural gas from Israeland Cyprus to the island of Crete (Greece) and then to mainlandGreece and Italy into the European natural gas network makes onlysense. Provided that the scientific estimates are proved to becorrect the East Med pipeline could provide energy security for theEU for more than a century.

In the longer term, natural gas from Iraq, Iran, Saudi Arabia andQatar and even from the Caspian Sea could only make sense to

connect to the East Med pipeline when the political environmentallows...

From and pthe Eseemsense

S i O ti Ch t


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Scenario Optimum Chart

N N t l G M E


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New Natural Gas Map Europe

Anfi

The Geopolitical Dimension


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The necessity for European energy security but also the findings of significant hydrocarbon deMediterranean have brought attention to the strategic significance of Southeastern Europe as natural gas, a third alternative energy corridor, and a catalyst not only for EU energy security bmeet increasing natural gas demand and reduce energy dependency on Russia, the EU must projects contributing to the diversification of natural gas supply; in parallel improve Europes rediversifying its import routes, two targets that are not necessarily mutually exclusive.

The Southeastern Mediterranean hydrocarbons from the geopolitical point of view implicate CIsrael and Lebanon but also Egypt, Syria, the EU, NATO, the US, Russia, China and the UK; Anatural gas producing countries. They also implicate the worlds biggest and smaller energy piece of the action but also the threat and competition faced by the South Eastern Mediterraneplanned projects of theirs; their influence on governments and politicians... And then there is in

Will Israel and Lebanon manage to put aside their differences and cooperate for the real bethese most valuable hydrocarbons be the cause of more tension? Will the international community succeed to silence Turkeys war threats against Israel and



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and against international law demands and arguments? Would a termination of the Nabucco pipeline, which will vastly

diminish the geopolitical importance of Turkey as an energy hub,force Turkey to escalate its threats towards Israel and Cyprusto the extent of an armed conflict?

Would the trilateral pact between Israel, Cyprus and Greece beconsidered a threat by Turkey or others and what will theirresponse be?

Should Turkey be invited to participate in the East Med pipelineif it recognizes the Republic of Cyprus and honors the UN andEU Security Councils resolutions to withdraw its troops from theoccupied by Turkey part of Cyprus?

What about the Greece-Turkey and Israel-Lebanon EEZ

delimitation? Will international law and sense prevail? What about the Turkish-Cypriot community? Will the finding ofthe hydrocarbons act as a catalyst and bridge to abandon

Will th

Medithydrocatalystabilmore



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illegal and insubstantial arguments or would the Turkish-Cypriotsremain slaves of Turkeys Ottoman-like foreign policy?

Would Arab nations (and especially those that are natural gasproducers that could eventually contribute with feeding thepipeline with fuel) participate in an East Med pipeline whenIsrael is a founding partner?

What about the security of the envisaged pipelines and theirprotection from terrorist activities?

How will the Southeastern Mediterranean hydrocarbons and theEast Med pipeline change the geopolitical balance in theimmediate and not only region?

No doubt, the geopolitical dimension of the Southeastern

Mediterranean hydrocarbons is complex, a fuel that could stabilizethe troublesome Eastern Mediterranean region and enhanceprosperity but could also fuel more tensions and controversy...

The SMedithydroboundgeopothe im

and n

Challenging considerations


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Complex challenges lie ahead for Israel, Cyprus and Greece but also for the EU. Challenges abe shared by Lebanon as well and in the longer term Syria:

Is a natural gas liquefaction plant too expensive an option for Cyprus? Would Israel partneLNG plant on Cyprus soil? Will the recent announcement by an Israeli inter-ministerial com

natural gas infrastructures for export should be located only in areas under Israeli control bGovernment of Israel?

Should the natural gas liquefaction plant be considered at all or should Cyprus and Israel cto Crete and mainland Europe?

Up until the natural gas liquefaction plant is constructed or pipeline to mainland Europe is lfeasible option? Could CNG transportation be a long-term solution?

Is the installation of the pipeline from Cyprus to Crete feasible, or the water depth and the utask? How long would such a task take? How does Turkeys view of the delimitation of its Ethe East Med pipeline partners be forced to choose an alternative and maybe more expens

of the international community and the EU be on this matter? Are they well informed? Are the EU and its citizens well informed of the immense benefits that such a project would

importance for a guaranteed primary NG source for the EU? What should be further done t



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Would the trilateral pact of Israel, Cyprus and Greece alone be in the position to safeguard terrorist activities? What kind and other alliances should be sought?

Have Israel, Cyprus, Greece and the EU prepared for predictable and quantifiable crises oevents? Is a crisis management or a contingency plan in place?

Should a pipeline running from Eastern Mediterranean gas fields on to Turkey and then to or other be an EU consideration at all?

Is granting companies of Russian interests gas concessions for Cyprus and the EU a wise Cyprus, Greeces and the EUs interests be safeguarded?

What about the oil deposits (when for example Aphrodite gas field or Block 12 alone in the a huge 3.7 billion barrels)? What is the infrastructure required?

What would the economic impact of a successful exploitation of the Southeastern MediterrCyprus and Greece be? What other business opportunities are created for the countries ingeneral?

Could a form of a JV be structured between Israel, Cyprus, Greece and the EU for the expthe Southeastern Mediterranean? What the role of the EU should be on the whole matter?

The EU Role and its Importance


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As the EU is becoming increasingly dependent on imported hydrocarbons the vast majority of completely dependent on a single natural gas supplier. Moreover, the EU is becoming increasiprice volatility and price rises on international energy markets and their consequences of the phydrocarbon reserves in few hands.

It therefore remains important for the EU to promote diversity with regard to source, supplier, tmethod. Projects should be developed to bring natural gas from new regions, to set up new gaEastern Europe, to make better use and limit the currently expensive need of strategic storageplanned new investments in new storage and pipeline capacity that would be needed to ensurhave to be balanced against the costs this will imply for the consumers), and to facilitate the cogas terminals.

To limit EU's external vulnerability to imported hydrocarbons, and promote growth and jobs, thaffordable energy to consumers, Europe has to transform itself into a highly energy efficient anlimiting the use of oil and increase the use of NG which is cleaner, leading to lower emissions pollutants), igniting a new industrial revolution, accelerating the change to low carbon growth a




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time, dramatically increasing the amount of local, low emission energy that Europe produces ain a way that maximizes the potential competitiveness gains for Europe, and limits the potentiahydrocarbons provide a solution to all of the above! Without this Project, the EUs objectives inStrategy for growth and jobs and the Millennium Development Goals, will also be more difficul

The significance of the Southeastern Mediterranean hydrocarbons for the EU as a third corridodifferent about this particular corridor, over and above its huge hydrocarbon deposits, is that Gmember states and Israel an honest and trustworthy ally. For the first time ever in European enguaranteed an uninterrupted supply of a traditional energy source of a vast magnitude and pota unique challenge and a remarkable opportunity and the need for EU action is stronger than

1. The EU should upgrade its role and involvement in the hydrocarbon efforts of Cyprus, Greeensure that an appropriate framework and solid plan are in place so that exploitation comm

2. The EU should use its regional and global leverage to ensure that geopolitical challenges alaw and that the S.E. Mediterranean hydrocarbons become a tool for reconciliation and reg

3. The South Eastern Mediterranean corridor should be included in the EUs Energy Policy an


Conclusion


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Conclusion

The vulnerability of the EU to energy supply risks is a fact but this can be no more. If the 51 tcmBruneton, Konofagos and Foscolos estimate to lie within the EEZ of Greece, and the significanCyprus and Israel, are taken into account, for the first time ever in European energy history, thuninterrupted supply of a traditional energy source. The estimates of reserves in the South EaEUs natural gas requirements by 2020 for more than a century, maybe two.

What makes these findings a remarkable opportunity for the EU is that Greece and Cyprus arean honest and trustworthy ally. A third energy corridor for the EU of the EU: The EU will no lonmarket prices of sources that are exogenous and to other countries that may also be volatile o

Additionally, the related derived opportunities created in terms of EU potential competitivenessinvestment momentum are immense.

The challenge ahead for the EU is to manage these new variables in the equation of the Southwith ultimate responsibility and Europeanism so as to guarantee and improve the prospects, ecitizens.

Conclusion


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Conclusion

Moreover, these hydrocarbon discoveries are bound to serve as acatalyst toward greater cooperation amongst the participantcountries. The joint exploitation between these countries and thelaunching of joint projects has the potential to change the wholepolitical and economic scene of the entire region to the better.

The different phases of the Project, further surveying andexploration, exploitation through CNG, LNG and the East Medpipeline, require joint and parallel coordination and action betweenIsrael, Cyprus, Greece and the EU. The challenges are ample,engineering and construction related, management and timerelated, economic and geopolitical.

Will the European Union seize this opportunity for a guaranteedenergy source supply of immense magnitude and potential?

WilEUoppguasou


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I. Map Gas Europe


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p p

EuropeProposed priofor natural gaby INOGATE

II. Map Oil & Gas Middle East


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p

Middle East

Oil & GasPipelinesby theInternationalEnergy Agency

III. World Oil & Gas Reserves


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Proved Natural Gas Reserves (tcm) Proved Oil Reserves (000 million barrels)

Source: British PetroleumSource: British Petroleum

IV. World Oil & Gas Production


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Natural Gas Production (bcm)

Source: British Petroleum Source: British Petroleum

Oil Production (Million tonnes)

V. World Consumption


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Natural Gas Consumption (bcm)

Source: British Petroleum

Oil Consumption (Million tonnes)

Source: British Petroleum

VI. Fuel Prices


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Fuel Prices (USD per million Btu)

Germanimport pis signifthan thaUK, US

Source: BAFA, Heren Energy Ltd., Energy Intelligence GroupNote: Japan = Japan LNG CIF; German = Average German Import Price CIF; UK = Heren NBP Index;

US = Henry Hub; Canada = Alberta; OECD = Crude oil CIF OECD countries

VII.EU Energy Dependence


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EU Energy Dependence (%)

The depeEU tnatufurththe r

accidSource: Eurostat

NoteEnergy dependency shows the extentto which an economy relies uponimports in order to meet its energyneeds. The indicator is calculated asnet imports divided by the sum of

gross inland energy consumption plusbunkers.

VIII.Physiography of the East Med


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The HerodAbyssal Pdeepest wshould be the East M

Source: Ifremer-CIESM

IX.Mediterranean Gas Plants


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Liquregain thare lnum

Source: GIIGNL (The LNG Industry, 2010) Modified by: Soil, Water & Life Solutions

X.East Med Energy Developments


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Signhydrin thFieldener

Source: Pytheas; Soil, Water & Life Solutions

XI. Energy Biggest Companies


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Global Energy Company Top 10 Rankings 2011

Source: Platts, Standard & PoorsNote: Company data as 6 January 2011

The

comare Oil &com$178

Sources (Alphabetically)


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Annales Geophysicae High resolutionnested model for the Cyprus, NE LevantineBasin, eastern Mediterranean Sea:Implementation and climatological runsBruneton, Konofagos, Foscolos CretanGas Fields: A new perspective for Greeces

hydrocarbon resourcesBruneton, Konofagos, Foscolos Theimportance of Eastern Mediterranean gasfields for Greece and the EUBP Statistical Review of World Energy,June 2011CGGVeritas Regional seismicinterpretation of the hydrocarbonprospectivity of offshore SyriaCSA International EIA for exploratorydrilling Block 12, Offshore Cyprus

ELIAMEP A strategic challenge: The role ofGreece in Europes southern gas corridor

ELIAMEP Consolidating the energy policyof IsraelELIAMEP Natural gas corridors inSoutheastern Europe and European energysecurityEurogas Natural Gas demand and supply:

Long term outlook to 2030Eurogas Pipeline to the futureEurogas The role of natural gas in asustainable energy marketFEIRGreece as Europes energy highwayGIIGNL The LNG Industry in 2010IEA World Energy Outlook 2011JGlobes The status of hydrocarbonexploration in CyprusIFRI Oil and gas delivery to Europe: Anoverview of existing and planned

infrastructures

NatidesisystNavBathPT O

NobOGPrepoPGSto upLebaPGSPythfor thPythpres

Pythto th

Sources (Alphabetically)
http://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%20to%202030%20-%20final.pdfhttp://www.ifri.org/downloads/etudeoilandgasnewedition.pdfhttp://www.eliamep.gr/wp-content/uploads/2012/02/executive-sumamry.pdfhttp://www.emmanouilidis.eu/download/Grigoriadis_ELIAMEP_Thesis_22008.pdfhttp://www.eliamep.gr/wp-content/uploads/2012/03/Ppt0000003-Read-Only.pdfhttp://www.iobe.gr/media/meletes/ngpipelines.pdfhttp://www.pytheas.net/docs/20111104%20Cyprus%20-%20Finally%20energy%20security%20for%20the%20EU%20in%20the%20pipeline.pdfhttp://www.google.com.cy/url?sa=t&rct=j&q=underwater%20natural%20gas%20pipeline%20cost&source=web&cd=1&sqi=2&ved=0CDYQFjAA&url=http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.113.9158&rep=rep1&type=pdf&ei=VyWMT9qXCsiq8APdxJS4http://www7320.nrlssc.navy.mil/DBDB2_WWW/v3.0/NRLCOM_dbdb2_01530n2.htmlhttp://www.iea.org/weo/docs/weo2011/homepage/WEO2011_Press_Launch_London.pdfhttp://www.pytheas.net/docs/20120116Cyprus%20Hydrocarbons%20Energy%20Security%20for%20the%20EU%20in%20the%20pipeline.pdfhttp://www.pytheas.net/docs/20110207Investing-in-Cyprus-Version04Web.pdfhttp://www.pytheas.net/docs/20120119%20The%20Economic%20and%20Geopolitical%20importance%20of%20Eastern%20Mediterranean%20gas%20fields%20for%20Greece%20and%20the%20EU.pdfhttp://www.pytheas.net/docs/20120330%20Cretan%20Gas%20Fields%20-%20A%20new%20perspective%20for%20Greeces%20hydrocarbon%20resources%20.pdfhttp://wink.globes.co.il/docs/Solon%20Kasinis.pdfhttp://investors.nobleenergyinc.com/releasedetail.cfm?ReleaseID=635912http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statistical_energy_review_2011/STAGING/local_assets/pdf/statistical_review_of_world_energy_full_report_2011.pdfhttp://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%20to%202030%20-%20final.pdfhttp://www.pgs.com/en/Pressroom/Calendar_of_Events/Campaigns/2010/Multi-Client-Newsletters/Middle-East-News/EMMP/http://www.cggveritas.com/data/1/rec_docs/1917_syria_prospectivity.pdfhttp://www.pgs.com/en/Pressroom/Calendar_of_Events/Campaigns/2011/MultiClient-Newsletter/Middle-East-News/The-Levantine-Basin-draws-attention-to-upcoming-License-Rounds-in-Cyprus-and-Lebanon/http://www.ogp.org.uk/pubs/446.pdfhttp://www.spe.org/jpt/print/archives/2011/03/12Israel.pdfhttp://www.giignl.org/fileadmin/user_upload/pdf/A_PUBLIC_INFORMATION/LNG_Industry/GNL_2010.pdfhttp://www.eurogas.org/uploaded/The%20role%20of%20natural%20gas%20in%20a%20sustainable%20energy%20market%202010.pdfhttp://www.eurogas.org/uploaded/pipebrochure.pdfhttp://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%20to%202030%20-%20final.pdfhttp://www.ann-geophys.net/21/221/2003/angeo-21-221-2003.pdfhttp://www.eurogas.org/uploaded/Eurogas%20long%20term%20outlook%20to%202030%20-%20final.pdf


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United Nations UN Convention on the Lawof the Sea of 10 December 1982USGS Assessment of undiscovered oiland gas resources of the Levant BasinProvince, Eastern MediterraneanWoodrow Wilson Center Cyprus in the

Eastern Mediterranean: Strategic location,strategic opportunitiesWorld Energy Council 2010 survey ofenergy resourcesWorld Energy Council Roadmap towards acompetitive European energy marketWorld Energy Council World energyinsight 2011

Regional Science Inquiry JournalGeopolitics of energy in the Kastelorizo,Cyprus, Middle East complexRepublic of Cyprus Ministry of Commerce,Industry and Tourism Petroleum systemsoffshore Cyprus

Spectrum East Mediterranean 2D multi-client seismic dataThe Begin-Sadat Center for StrategicStudiesEurasian energy and IsraelschoicesThe Geophysical Institute of Israel TheLevant Basin offshore IsraelTscherning, Arabelos Gravity fieldmapping from satellite altimetry, seagravimetry and bathymetry of the EasternMediterranean

UACES The pipeline diplomacy: TheGreek case in the East Mediterraneanenergy corridors

The Author
http://www.rsijournal.eu/ARTICLES/Journal_dece_2010/GEOPOLITICS%20OF%20ENERGY%20IN%20THE%20KASTELORIZO%20%20CYPRUS%20MIDDLE%20EAST%20COMPLEX%20BASED%20ON%20THE%20EXISTING.pdfhttp://www.spectrumasa.com/mcmap/public/filespool/0/17/east-med.pdfhttp://www.searchanddiscovery.com/documents/2010/10279montadert/poster01.pdfhttp://www.biu.ac.il/Besa/MSPS88.pdfhttp://www.gsi.gov.il/_Uploads/953GSI-14-2006.pdfhttp://www.un.org/depts/los/convention_agreements/texts/unclos/UNCLOS-TOC.htmhttp://www.wilsoncenter.org/sites/default/files/CyprusMinister.pdfhttp://pubs.usgs.gov/fs/2010/3014/pdf/FS10-3014.pdfhttp://www.worldenergy.org/documents/wec_wei2011.pdfhttp://www.worldenergy.org/documents/ser_2010_report_1.pdfhttp://www.uaces.org/pdf/papers/1001/kottari.pdfhttp://cct.gfy.ku.dk/publ_cct/cct545.pdfhttp://www.worldenergy.org/documents/roadmap2.pdf


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An Economist and presently the Chairman & CEO of Pytheas, Harris America Group, Thomson Financial BankWatch, and Moodys Investoprimarily in the areas of investment and corporate banking and corporand finance, risk management and business development. His researthese areas range across practice rather than theory, economic and b

entrepreneurship and geopolitics.

He has been an adviser to various governments, central banks, financcorporates and has been a member of the board of directors of multin

Harris extensive and in depth knowledge of the emerging markets of Gulf, and Africa is complimented by his diverse expertise in industriesConstruction, Hospitality, Minerals & Mining, Agriculture, Fisheries, EnSources, Energy, Satellite Telecommunications and Shipping.

Harris A. Samaras
mailto:[email protected]


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About Pytheas


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Like Pytheas, the ancient Greek explorer, scientist and businessman weprovide access to markets inviting our partners to wander the paths andexplore the places with a partner that possesses, knowledge ofprevailing market dynamics, thorough industry expertise, and above allkeen awareness of geographic idiosyncrasies

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not PYTHEAS or Harris A. Samaras.

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Southeastern Mediterranean Hydrocarbons

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