News Analysis: Eastern Mediterranean Gas Forum possible new OPEC: experts

Source: Xinhua| 2019-01-21 21:18:45|Editor: xuxin
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by Marwa Yahya

CAIRO, Jan. 21 (Xinhua) -- The establishment of Eastern Mediterranean Gas Forum (EMGF) in Cairo is likely to become a nucleus for founding a new entity for natural gas similar to Organization of the Petroleum Exporting Countries (OPEC), energy experts said.

Cyprus, Greece, Israel, Italy, Jordan, Palestine and Egypt agreed on Jan. 14, 2019 to set up a forum to create a regional gas market, cut infrastructure costs and offer competitive prices.

"Establishing the forum is part of the Egyptian and the eastern Mediterranean countries' strategy to boost their economies from the rich natural gas in the region," said Gamal Qalyoubi, professor of oil and energy of the American University in Cairo.

"The forum will support Egypt's position as a hub for energy, and will allow the surrounding countries to benefit from the strong infrastructure in Egypt," Qalyoubi told Xinhua.

The seven-country deal will achieve a kind of tranquility in the Mediterranean region especially for the forum members, and also for the European Union countries which import gas from Israel and Cyprus via Egypt, he added.

The Eastern Mediterranean countries own one third of the world's reserve of natural gas, according to Qalyoubi.

The new organization aims to "create a regional gas market that serves the interests of its members," a statement of the Egyptian Petroleum Ministry said.

Apart from the seven-country members, other Eastern Mediterranean countries may join the forum later, the ministry said, adding that the EMGF will be monitored openly by international and regional organizations.

The EMGF will support gas producing countries by "enhancing cooperation with consuming parties in the region, taking advantage of existing infrastructure and developing further infrastructure options to accommodate current and future discoveries," the ministry added.

Unlike the oil, there are no laws, organizations or institutions for the gas affairs, Qalyoubi noted.

He attributed the choice of Egypt as the base for the forum which will importantly impact on developing the energy in the region.

He predicted some large gas powers like Russia and Iran could join the EMGF, but for political reasons, it will take more time for Qatar to join.

Medhat Youssef, ex-chief of the Egyptian Petroleum Authority, said that the EMGF will constitute a bloc similar to OPEC.

"The new bloc will achieve balance in the international gas market as the Eastern Mediterranean countries possess 87 percent of the gas reserve in the Mediterranean Sea," Youssef told Xinhua.

However, Ramadan Abu el-Ela, oil expert, ruled out the possibility that the EMGF would work as the OPEC with the absence of the top three natural gas mega producing countries of Russia, Iran and Qatar.

He deemed that the EMGF will be a political platform for resolving the Palestinian-Israeli cause, adding that the Israeli and Cypriot gas couldn't be exported to Europe without passing through Egypt.

Egypt has rapidly increased its production of natural gas in hope to become a hub for exporting to Europe after making a series of big discoveries in recent years, including the largest gas field in the Mediterranean, Zohar.

Cyprus and Egypt will construct a pipeline connecting Cypriot Aphrodite gas field to Egypt's liquefied natural gas facilities. Egyptian gas is expected to reach Jordan in January, according to Jordon's energy minister.