East Med pipeline proposal presented by the Greek Public Gas Company (DEPA) for the

connection of Cyprus with the Greek mainland via the island of Crete has recently been

included in the PCI list (“Projects of Common Interest”) by the EU authorities. Its estimated

annual flowrate would be equal to 8 billion cubic meters in return of a construction cost of

approximately 5 billion USD. This should eventually establish a physical interconnection

between the European mainland and the gas reserves at the Eastern Mediterranean basin

(Israel 1400 bcm, Cyprus 1250 bcm, Lebanon 750 bcm according to estimates from the

Israeli Ministry of Energy).

Although some may argue that the prospective flows through this pipeline will not have a

noticeable impact on the overall EU energy supply picture (409 bcm in 2014), the potential

of East Med pipeline to become a real “game-changer” for Southeastern Europe should be

unquestionable. Its projected annual flowrate could match the Russian gas volumes currently

exported to the four largest Balkan markets combined; Romania, Greece, Bulgaria and Serbia.

In other words, for the first time Gazprom would obtain a real contestant in the region and

consecutively supply alternatives and market competition could almost double. Besides the

significant economic benefits of expanding the number of market players, using Cypriot (i.e.

domestic to the EU) and other Eastern Mediterranean natural gas to expand the supply options

of European markets is a direct implementation of the European Energy Security Strategy,

the importance of which has only increased in the face of recent sharp changes in Russian

foreign policy behavior......contine reading