Introduction
The East Mediterranean has in the recent past experienced what could be described as a gas revolution. Having historically seen limited exploration activity, resulting in modest proven hydrocarbon resources, the region is now considered a ‘new frontier’ for offshore gas exploration in the Middle East and North Africa (MENA). The discovery since 2009 by Israel and Cyprus of large gas deposits, estimated to contain a combined 980 Bcm (35 Tcf), has spurred a flurry of exploration activity, leading some to believe that the discoveries are ‘potentially so vast that the economic map of the region is already being redrawn.
Indeed, Israel and Cyprus – the two countries most advanced in offshore gas exploration – are now facing the prospect of becoming self-reliant producers of natural gas for decades to come, with the possibility to further monetise their resources through exports. For both countries, this stands in stark contrast with their traditional dependence on imports for almost their entire energy needs. Domestic factors within Cyprus and Israel are now lik ely to determine the kind of game changer East Mediterranean gas will be. In particular, both countries need to decide how quickly to develop their natural gas resources, what proportion – if at all – to dedicate to exports, and, eventually, how to deliver gas to export markets.