Will the European gas crisis give impetus to Arab gas exports, Sherine Nasr investigates Security of natural gas supplies to EU countries has been a topic of great concern lately. The issue gained new dimensions when a conflict between Russia and the Ukraine over gas transmissions led to a regional crisis. Many EU countries welcomed the new year with barely enough gas supplies to withstand the winter, albeit at temperatures below zero. It doesn't take an expert to recognise that the current gas crisis facing the EU will give fresh impetus to new gas pipelines from potentially rich gas neighbours. It will also help accelerate the completion of other strategic pipelines, including the Arab gas pipeline which is once again in the limelight. Normally, the issue of diversifying natural gas resources to European countries has been on top of the agenda of the EU officials, many of whom were left out in the cold during the latest crisis. "We have to diversify our sources of energy as one tool of facing the problem. Other measures are to encourage energy efficiency policies and to depend more on renewable energy resources," said EU External Relations Commissioner Benita Ferrero-Waldner during a brief meeting with Middle Eastern journalists at the European Commission in Brussels on 12 January. Waldner added that the EU is working closely with Egypt, Jordan and Syria, which it considers to be sources of gas. Iraq, too, she believes, is expected to join the group and play a very important role. For his part, EU Energy Commissioner Andris Piebalgs said that while security of supplies to the EU will be discussed in details during an energy council meeting due to be held in February, it remains a matter of top priority to the EU to increase the number of routes through which gas is delivered. "The situation in natural gas supplies is the worst. We need a strategic energy review and we need to receive gas from various sources," Piebalgs said. EU countries depend on Russia for almost 27 per cent of their total gas imports. Further, compared to other international markets, the EU is very fortunate in that it is surrounded by oil and gas-rich countries. These include Algeria, the Middle East proper and the Caspian, which can provide an equally suitable alternative for Russian gas. Notably, Egypt is the sixth largest natural gas exporter to the EU. Aimed at utilising a wealth of natural gas resources by exporting it to Europe, the Arab gas pipeline connects Egypt, Jordan, Lebanon, Syria and Turkey in a three-phase mega-project, forming one of the largest regional natural gas networks. The first section of the pipeline, completed in 2003, runs from Arish in Egypt to Aqaba in Jordan. This connection was constructed at a $220 million cost and an annual capacity of 1.1 billion cubic metres. The pipeline's second connection runs from Aqaba to Al-Rehab in Jordan, almost 24 kilometres from the Syrian borders, at a length of 390 kilometres and at a cost of $300 million. A 100-million Euro grant from the European Investment Bank was extended to the Egyptian Natural Gas Holding Company in 2004 in order to finance the construction of that second phase. The third section runs from the Jordanian-Syrian border to the Deir Ali power station in Syria. Completed in February 2008, that phase was built by the Syrian Petroleum Company and Stroytransgaz, a subsidiary of Gazprom. In addition, in March 2006, Egypt, Syria, Jordan, Lebanon, Turkey and Romania reached an agreement to build a further extension that would go through Syrian territories to the Turkish borders. From there, the pipeline will be directly connected to the planned Nabucco Pipeline, expected to deliver gas to Europe by 2015. The Nabucco pipeline is a new project that aims at connecting the Caspian region, the Middle East and Egypt via Turkey, Bulgaria, Romania and Hungary with Austria and further on with the Central and Western Europe. An agreement to connect the Arab gas pipeline with the Turkish grid has already been signed in 2008. Moreover, Egypt has been involved in negotiations with Romania and Bulgaria on the export of natural gas to these countries. The whole scenario coincides with a rather optimistic outlook for Egyptian natural gas reserves. An Egyptian government official, who preferred to remain anonymous, recently told Zawya Dow Jones that Egypt's natural gas production could reach 100 trillion cubic feet (tcf) by 2011, up 47 per cent from the current 68 tcf in 2007. Currently some 80 agreements with international firms, aimed at conducting drilling operations worth about $10 billion, are in effect. While oil production maintains its current levels, the potential for exploring more gas remains a wide possibility. The sporadic natural gas network planned to connect these nations with the economic and geographical diversity they represent will give way to deeper negotiations on different issues. "On the bilateral level, we look into issues related to gas pricing, freedom of transit, access to networks, maintenance, distribution and building of refineries," explained Madelaine Tuininga, deputy head of the European Commission's Industrial Sectors Unit.
