East Mediterranean Eyes EU And Global LNG Markets For Gas Sales

For Europe, whose own output is falling, East Mediterranean gas has become a key target to secure future supplies and help the region to reduce its reliance on Russia.

Yet so far the EU has struggled to access large new reserves that could replace Russia, which supplies around a third of Europe's demand and has plans to cement its dominant position by building the massive South Stream pipeline to southern Europe.

Alternative suppliers like Azerbaijan do not hold enough reserves to act as a major alternative to Russia while others, such as Algeria and Libya, are struggling to keep up export quotas and are politically unstable.

Hopes of large-scale U.S. LNG exports to Europe could also fall flat as Asia, which pays around twice as much for LNG cargoes as European buyers, remains a more attractive market to sell to than Europe.

Both Israel and Cyprus have said they would be keen to supply Europe's markets through a pipeline, and with Cyprus the EU would gain a new and internal supply source.

A pipeline to Europe would guarantee access to, and revenue from, the world's biggest gas market with its annual consumption of around 500 billion cubic metres.

At the same time, an LNG terminal would allow selling cargoes flexibly across the globe, wherever prices are highest.