The critical energy fields in the Eastern Mediterranean
At the end of February, the EU Court sternly pointed out Greece’s chronic delays in completing its planning, arguing that this not only weakens Greece’s territorial sovereignty but also that of the EU, especially when funding public utility projects between Greece and Cyprus. Greece has two main priorities: national and broader European interests. These concern the protection of sovereign rights in its territorial waters and the continuation of the electricity interconnection project, which is one-third funded by the EU to contribute to overall regional stability in Southeastern Europe’s electrical networks. However, to avoid escalating tensions with Turkey, Greece has opted for the official 'freeze' of GSI project operations. This decision significantly reduces its negotiating power on broader regional issues affecting both Greece and the EU. ADMIE’s immediate concern is the interconnection of the Aegean islands, as it directly contributes to the economic and social cohesion of the islands. The goal is not to be blamed when consumer electricity prices rise due to delays and payment penalties owed to French cable manufacturers for the 1,000-kilometer-long cable, Italian shipowners of research vessels determining the cable’s placement, and Greek contractors. The GSI project, which was initiated 13 years ago in 2012 by Israel—alongside the EastMed project—was part of a significant agreement between Israel, Cyprus, and Greece, signed in January 2016. Initially, Belgian and Chinese investors showed interest, but they were later replaced by other foreign investors and European banking institutions. The goal of the GSI project is to establish an electrical connection between Israel, Cyprus, and Greece, while the GREGY project aims to link Greece and Egypt. Both projects seek to transport electricity to Europe, generated from renewable energy sources and natural gas.
Greece looks to the significance of exporting electricity from renewable energy sources, while Israel and Cyprus focus on natural gas exports—a stable energy source that ensures consistent electricity production through gas combustion. The GSI and GREGY projects align with the goals of the European Network of Transmission System Operators (ENTSO) and the Mediterranean equivalent, Med-TSO, as these interconnections are considered essential for reducing congestion points in Europe, which currently number around 100. At the same time, they aim to link the Middle East with Europe while laying the groundwork for future connections with Asia. The first electricity transfer is expected to take place in at least five years, around 2030-31. This timeline allows Israel to make new natural gas discoveries by 2031, ensuring exports while reserving part of its production for participation in the GSI. Meanwhile, Cyprus can prepare for selling natural gas to Egypt by 2031, aiming to contribute to liquefied natural gas (LNG) production. For Greece, which lacks access to national natural gas sources, the strategy will be to exchange future electricity flows with Cyprus and Israel, sourced from photovoltaics and battery storage. The availability of electricity through GSI and GREGY will depend on the rapid development of new renewable energy installations and the availability of natural gas, which in turn depends on new hydrocarbon discoveries in the Southeastern Mediterranean by 2031.
New discoveries in Israel, Egypt, and Cyprus are expected to significantly increase reserves in the coming years. Major discoveries in 2022 by Chevron, ENI, Energean, Exxon, and TotalEnergies are estimated at around 300 billion cubic meters (Bcm). Additionally, eight new drilling operations are planned by the end of 2025. Based on estimated reserves, annual natural gas production in the Southeastern Mediterranean is projected to exceed an average of 57 Bcm from 2025, excluding future exploration efforts. The U.S. continues to import gas into Europe. Libya has announced 22 new concessions—three of which border Greece’s median line. These areas target geological environments similar to those south and west of Crete and do not fall within the Turkish-Libyan memorandum zone. International oil companies (IOCs) are returning, including Eni, OMV, Total, ADNOC, BP, and Repsol, which resumed exploration activities in 2024. Eni signed an $8 billion gas production agreement to generate 750 million cubic feet of natural gas per day from 2026, destined for Sicily. Turkey has announced its readiness to invest in Libya’s offshore fields to exploit its vast natural gas reserves, which happen to be located south of Crete—particularly in the island’s southwest, where Greece is also preparing to conduct drilling. However, the increasing likelihood of Russian military presence complicates the outlook. Now that Libya is opening bids for three offshore blocks along Greece’s median line and three more near Malta’s and Italy’s Exclusive Economic Zones (EEZs), international alliances will form to submit applications, including Turkey’s state-owned oil company, TPAO. Greece has the opportunity to leverage this situation by declaring to the United Nations that the Turkish-Libyan memorandum is a commercial agreement disguised as an international sovereignty pact. It could also reissue tenders for areas south of Crete, which have remained inactive since 2019.
"NEA KRITI RADIO - March 26, 2025"