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Mediterranean Gas Brings Egypt and Turkey Closer

For the Middle East region, the year 2021 could easily be labeled as the year of change. Under unprecedented security and geopolitical pressures, the key players in the region found themselves forced to abandon competition and seek compromise over conflicting visions and interests. Major two highlights of this regional transition are the reunification of Arab Gulf countries after years of diplomatic conflicts, and the rapprochement efforts between Turkey and its most prominent regional rivals; Egypt and the United Arab Emirates (UAE).

While the Turkey-UAE reconciliation process took merely three months to be fully accomplished on the highest diplomatic and political levels, the reconciliation process between Turkey and Egypt, which was first activated in March, is still stuck in a minimal diplomatic negotiations zone. That is despite the fact that Egypt and Turkey are economically and geopolitically tied via the Mediterranean Sea more than any other neighbors in the region. However, the recently released data showing that Turkey has been importing gas, in high volumes, from Egypt, during the last quarter of 2021, is a sign that Turkey and Egypt are finally recovering from the blinding prejudices that kept their relationship broken for eight years.

According to data published by S&P Global Platts Analytics, in the period between October and December, Egypt shipped to Turkey seven cargos of Liquified Natural Gas (LNG), extracted from Idku and Demietta plants, located at Egypt’s shores in the Mediterranean. In the past, similar exports from Egypt to Turkey were only limited to mineral oils and plastics. In general, the trade volume between Turkey and Egypt remained high, even during times of intense political tensions. However, this is the first time Egypt has provided Turkey with such a high volume of LNG exports, despite its contracts with Greece and Cyprus, within the EastMed Gas Organization.

Turkey is always hungry for gas, as it is the main energy resource to warm and light the houses of a population exceeding eighty million people, in addition to at least nine million refugees. Turkey’s annual gas bill exceeds fifty million dollars, with expectations that Turkey’s gas demand will increase to a record 60 billion cubic meters, by the end of 2021. Needless to mention how heavy a burden that is on the already suffering Turkish economy.

Iran, Qatar, and Azerbaijan are the top three exporters of gas to Turkey. Turkey’s contracts with Iran and Azerbaijan have already come to the end of their terms, earlier this year, and no effort was made to renew them. Turkey also imports gas from Algeria, upon a contract that is valid until 2024. However, the unwise decisions made by Algerian decision-makers, recently, are making Algeria appear as an unreliable trade partner to Turkey or Europe. In the heat of its tensions with Morocco over the Western Sahara, the Algerian government abruptly terminated the contract for a gas pipeline that extends through Morocco to deliver gas to Spain and from there to Europe. For the past 25 years, 10% of Moroccan gas supply used to come through this road, as compensation for hosting the Algerian pipeline. In that sense, Algeria thought that by cutting the contract they were punishing Morocco. But, in fact, Algeria is hurting its own economy and reputation as a regional gas exporter, by making such a decision.

The aforementioned factors could, perhaps, explain why Turkey is expected to grow more dependent on the Egyptian LNG imports, in the next few years. In addition, the geographic proximity between Turkey and Egypt makes the potential for cooperation in this particular sector highly profitable to both sides. Turkey can import gas for a relatively lower price from Egypt because the transportation cost will be minimal. If the two countries figure out a way to do a demarcation agreement in the Mediterranean, they will be able to create their own pipeline, which will turn Egypt and Turkey, jointly, into a hub for exporting gas to Europe.

Despite the demarcation agreements between Egypt and Turkey’s opponents Greece and Cyprus, Egypt has always been careful not to trespass on the areas that Turkey identifies as sovereign in the Mediterranean. In early March, the Egyptian Ministry of Petroleum published a new map reassigning the position of its bid block “EGYMED-W18,” showing that its planned gas drilling activities will not extend beyond “meridian-28,” which Turkey identifies as a sovereign area, and labels it as the boundary line of the Turkish continental shelf.

In an immediate response, Turkey’s Defense Minister, Hulusi Akar, welcomed Egypt’s move in a rare statement of this kind. “Egypt’s respect to our continental shelf is important. We have many historical and cultural values in common with Egypt. The activation of these values could make a difference in relations in the coming days;” said Hulusi Akar, who also hinted that a maritime agreement between Turkey and Egypt could be created in the near future. Hulusi Akar’s brief but honest statements, on March 6th, aroused a lot of controversy in the region, especially in Greece and Cyprus, but were positively received in Egypt, on governmental and popular levels.

This particular incident launched a momentum for reconciliation between Turkey and Egypt. In February of next year, the two sides are expected to sit for the third round of negotiations. Let’s hope that the Mediterranean gas that once was a reason for conflict in the Mediterranean be the glue that makes Turkey and Egypt stick together, for their bilateral benefit and also for the benefit of the region.

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