Towards energy independence from Moscow?   The EU, Egypt and Israel sign a gas agreement in Cairo

Towards energy independence from Moscow? The EU, Egypt and Israel sign a gas agreement in Cairo

While the member states of the European Union (EU) are seeking to forge new bilateral partnerships to alleviate their domestic dependence on Russian gas and oil, the EU’s institutions are also working to find new energy partners for the bloc. At the end of March, Josep Borrell, EU High Representative for Foreign Affairs and Security Policy, traveled to the State of Kuwait to strengthen strategic ties with this major oil producer (Kuwait is home to nearly 7% of the known global oil reserves). New partnerships for energy supply have become increasingly pressing since the 27 agreed an embargo on Russian oil at the EU summit held in Brussels on 30 and 31 May 2022. 

Despite the numerous challenges ahead, the EU is finding new partners to help guarantee its energy security. During an official visit to Cairo, Egypt, on 15 June 2022 where she participated in the East Mediterranean Gas Forum, the President of the European Commission, Ursula Von der Leyen, signed a provisional agreement with Israel and Egypt. Under the terms of the deal, Israeli gas is to be sent to liquefaction facilities in Egypt before being exported to Europe. 

During a press conference with Egyptian President Abdel Fattah al-Sisi, Von der Leyen declared: “Russia's war against Ukraine has exposed our European dependency on Russian fossil fuels, and we want to get rid of this dependency (…) We want to diversify to trustworthy suppliers, and Egypt is a trustworthy partner.” The agreement is expected to allow the EU to partially wean itself off the gas up to now supplied by Moscow.

Israel's Gas Field

The Leviathan gas field was discovered in 2010 off the Israeli coast. Operated since 2019, the Leviathan is set to ensure the energy independence of the Jewish state over the next 40 years. The Russian-Ukrainian conflict and the subsequent increase in energy prices worldwide also presented the government of Tel Aviv with unexpected economic and diplomatic opportunities at a time when it was looking for new exportation routes. “This technical public cooperation, that is coming to help Europe, to which we are the closest countries in the region, is incredibly important,” Itzhak Levanon, former Israeli ambassador to Cairo, said. 

The Memorandum of Understanding (MoU) signed in Cairo stipulates that the three partners “will endeavor to work collectively towards enabling a stable delivery of natural gas to the EU that is consistent with long-term decarbonisation objectives and is based on the principle of market -oriented pricing”.

In 2020, Israel had already signed a USD 15 billion deal with the EU for the exportation of its gas to the North via Egypt. However, the MoU signed on 15 June provides for a significant increase in the volumes exported to the bloc. Even though the contribution of Israel only represents a fraction of the Russian supply, it will nonetheless call for considerable long-term investments to adapt the current infrastructure to the transportation of much larger volumes of liquified natural gas (LNG).

Enhanced Collaboration with Egypt

The agreement signed with its Israeli and European partners also comes at the right time for Egypt. Due to the war in Ukraine, the North African country has seen a spike in the price of wheat, a staple food for a hundred million Egyptians, 80 % of which is usually imported from Moscow. Coupled with an increase in oil prices, the upward trajectory of food prices could burden the Egyptian government’s budget with an additional USD 10 billion.

When signing the agreement, Commission President Von der Leyen also pledged EUR 100 million aid to Egypt to guarantee its food security. EUR 3 billion will also be released over the next few years to finance agriculture and nutrition, water and sanitation programmes in the region.

During her visit, the President of the European Commission also underlined the country's potential to become a locomotive of the energy transition owing to its abundance of sunshine and strong winds, the "energy of the future". “We are starting to tap into the full potential of EU-Egypt relations, by putting the clean energy transition and the fight against climate change at the heart of our partnership,” Von der Leyen said in Cairo.

Egypt will host the next United Nations summit on climate change (COP 27) next November.

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