Gazprom VS ENI : A New War in East Mediterranean Sea?

As you can read at the following BBC article, titled “Italy’s Eni discovers huge gas field off Egyptian coast”, August 2015, ENI, the Italian energy giant discovered a huge natural gas field in the Egyptian waters in August 2015.

“Italy’s Eni discovers huge gas field off Egyptian coast”, August 2015.

The Italian public is ENI’s largest shareholder, and the Russians had given ENI a 20% stake in the South Stream pipeline. Therefore the Russians had the Italian support against the EU anti-monopolistic regulation which threatens Russian interests in Europe. After the cancellation of the South Stream and the agreement for the Nord Stream 2 pipeline it seems that Italy and Russia will go separate ways. See “The Clouds Over the Russian-Italian Relations”.

In September 2015 Russia decided to significantly increase her military presence in Syria. See for example the following Time article, titled “Russia Has Added Dozens of Aircraft to Its Growing Military Presence in Syria”, September 2015.

Syria is very important for Russia because an Arab-Turkish pipeline could be constructed in order to send natural gas from the Persian Gulf to Europe through Turkey and Syria. However after the war broke out the construction of such a pipeline network was not possible, and therefore it is strange that Russia suddenly decided to increase her military presence in Syria in such a massive scale. The Russian reinforcements are more strange if it is taken into account that the Americans do not seem very interested in the removal from power of the Syrian dictator Bashar al Assad, who is also an Iranian and Russian ally. See for example “Kerry’s remarks on Syria trouble Turkey”, September 2015

“Kerry’s remarks on Syria trouble Turkey”, September 2015

As you can read at the Al Monitor article, many members of parliament in the United States wonder whether Assad’s removal should be a priority for the United States, given that the Islamic State (ISIS) is causing so much trouble. Turkey’s influence over the Islamic State is not a secret. But why would the Americans want the Turks to have Syria under their control, given how aggressive Turkey has become in her energy policy? It would be much better for the Americans if there were two energy corridors instead of one i.e. the Caspian Sea-Turkey-Europe corridor and the Iran-Iraq-Syria-Mediterranean Sea-Europe one. If Turkey were to control Syria she would be able to blackmail the Americans and the European. See the following map.

Map 1

Map of Natural Gas Pipelines

The more pipelines there are connecting the Middle East and the Caspian Sea to Europe the better it is for the Americans and the Europeans. Turkey is no longer the loyal American ally she used to be.

Therefore given that the Americans are not very interested in Assad fall, and there is no possibility, at least for the moment, of an Arab-Turkish pipeline, it is strange that Russia decide to increase her military presence in Syria in such a dramatic way. As you can read at the following Stratfor article, titled “Russia Uses Syria to Influence Other Powers”, Russia increases her military presence in Syria in order to put pressure on Israel and Turkey, and not to protect Assad.

I mentioned ENI’s recent discovery in Egypt. In addition to this discovery the Israelis agreed to sell natural gas to the Italian ENI and the Spanish Repsol from Tamar, which is their second largest gas field, holding more than 300 billion cubic meters of natural gas. See “Israel’s Agreement with the Italian ENI and the Spanish Repsol”.

Map 2 Israeli Gas Fields : Leviathan and Tamar

Map of Israel's Natural Gas Fields

As you can see at the following map, Egypt’s LNG facilities are located at the Nile Delta.

Map 3

Map of Italy's LNG Plants in Egypt

As you can read at the following Reuters article, titled “Damietta LNG plant files complaint against Egypt’s EGAS –source”, April 2014, 80% of the LNG facility at the Egyptian port of Damietta belongs to ENI and Union Fenosa Gas (Repsol+La Caixa), and the rest 20% belongs to the Egyptian state-owned companies EGAS and EGPC.

2nd Paragraph

The Damietta LNG plant is 80 percent-owned by Union Fenosa Gas (UFG), a joint venture between Spain’s Gas Natural and Italy’s Eni. The remaining 20 percent is split evenly between state-owned companies EGAS and EGPC.

For the shareholder structure of Union Fenosa Gas see “Israel’s Agreement with the Italian ENI and the Spanish Repsol”.

For the Nile Delta see the following map.

Map 4

Map of Suez Canal and Nile Delta

For Egypt’s LNG facilities see also Wikipedia

“Overview of Infrastructure in Egypt”

In Egypt there are two liquefied natural gas (LNG) facilities, Egyptian LNG and SEGAS, both of which are under the control of a consortium of national and international oil companies. The Egyptian LNG plant consists of two operating facilities located in Idku on the Mediterranean coastline, with a 3.6 million ton per year capacity each.[5] With the capability to accommodate the largest LNG vessels up to 160,000 cubic meters, the LNG port at Idku is the largest specialized LNG export facility in Egypt.[6] The SEGAS plant has a capacity of 5 million tons per year and is located in Damietta, further east of Idku and also on the Mediterranean.[7] There are plans to expand both terminals in the near future, depending on export policy changes.[8]

According the EIA country profile, around 70 percent of Egypt’s natural gas is exported in the form of LNG, which amounted approximately 12.7 billion cubic meters in 2009. The In the same year, the United States was the largest recipient of Egyptian LNG, representing 35 percent of Egyptian LNG exports for the year and also 35 percent of U.S. LNG imports. Egyptian LNG export also went to Spain (32 percent) and France (13 percent) with smaller volumes travelling to Canada, Mexico, Asia and other European countries.[9]

The Nile Delta with its LNG facilities is a threat for Turkey, Qatar and Iran, and it is vulnerable to terrorist attacks. See for example the following Breitbart article, titled “11 wounded in explosion in egypt’s Νile Δelta”, October 2014.

ENI’s growing presence in the East Mediterranean Sea is a big problem for Russia too. Russia is always trying to cause wars in the regions that threaten her energy policy. That’s what Russia did in Syria. In 2009 Russia asked the Syrian dictator Bashar al Assad to block the Qatar-Turkey-Europe pipeline, which was promoted by Turkey and Qatar, and in return Gazprom offered to construct the Iran-Iraq-Syria pipeline, and Syria agreed. The Turks and the Arabs of the Gulf were infuriated and attacked Syria. War was the best outcome for Russia. For Russia the Iran-Iraq-Syria pipeline was not as bad as the Qatar-Syria one, but it was still pretty bad. It would still be competition for Russia in Europe. War was the optimal outcome for Russia.

Map 5 Iran-Iraq-Syria and Qatar-Turkey Pipelines

Map of Qatar-Turkey Pipeline

Russia used the same approach in the Turkish Kurdistan. Russia generously supported the Kurds of the PKK in Turkey, and a war between Turkey and the Kurds has almost broken out, which can block the Southern Energy Corridor.

Map 6  Kurdistan and Southern Energy Corridor

Map of Kurdish Pipelines

There is also a problem between the rich in oil and gas Kurds of Iraq and the poor Kurds of Turkey, because the Kurds of Iraq need Turkey in order to export their oil and gas. See also “Who is Responsible for the War”

Russia’s main export market is Europe, and the Russian energy policy is mainly about how to protect her oil and gas sales to Europe. Since Russia’s strategy is to cause war in the regions that threaten her energy policy i.e. her sales to Europe, we should assume that she will try to do exactly the same in the Eastern Mediterranean Sea, a region posing a threat for Russian exports. Russia has three options in order to destabilize the region. The first one is Egypt, the second one is Cyprus, and the third one is Israel.

Map 7

Map of ENI in Egypt

Cyprus is a member of the European Union, but a traditional Russian ally. Egypt was an ally of the Soviet Union until the mid 70s, when it became an American ally. Recently Egypt has moved towards Russia again, because the United States accepted the Muslim Brotherhood in Egypt. Turkey was behind the Muslim Brotherhood in Egypt, and the Americans need Turkey a lot more than they need Egypt. The Russians know that the Americans need Turkey a lot more than they need Egypt, and therefore Egypt will need Russia. Therefore the Russians do not want to cause problems in the Egyptian-Russian relations. After all there is already a lot of turmoil in Egypt, because Turkey, Qatar and Iran are supporting many terrorist attacks against Egypt from Libya and the Gaza Strip.

Israel on the other hand depends on the US for its survival. Israel and Russia have significantly improved their relations due to their cooperation against the Islamist militants supported by Turkey and Qatar. Israel also gave Gazprom exclusive rights over a part of its second largest gas field Tamar. See Wall Street Journal “Gazprom Signs Deal to Market Israel’s Tamar LNG Project”, February 2013.

However the Russians know that Israel is dependent on US for its survival, and if Israel has to choose between Russia and the United States it would have to go for the United States. Therefore Israel might be the ideal geographical location for Russia to start a war. At the following Stratfor article, titled “Russia Uses Syria to Influence Other Powers”, September 2015, you can read that the reason Russia is increasing her military presence in Syria is because she wants to put pressure on Israel and Turkey.

At the following Business Insider article, titled “Hezbollah is joining a formal alliance with Russia, Iran, and the Syrian regime”, September 2015, you can read that Russia is forming an official alliance with Hezbollah in Lebanon.

Hezbollah is Israel’s number one rival in Southern Lebanon, and it is a Shite Muslim organization supported by Iran. If Hezbollah is supported by Russia she will be a lot more confident and a lot more aggressive towards Israel. Until now, if Syria and Lebanon attempted to bring weapons of mass destruction near Israel, Israel would destroy them. But now the Russians will have advanced radars, anti-aircraft missiles and aircrafts in Syria, and if they support Hezbollah they will make life much harder for Israel, because there will be a high probability of a clash between Russian and Israeli forces.

What I am trying to say with all the above is that Israel might be the best location which can be used by Russia to destabilize the region, and also punish Israel for its agreement with ENI and Repsol.

Israel and ENI are not the only “lucky” ones to worry about the rising Russian presence in Syria. Turkey is another player the Russians are aiming at. In August 2015 Russia signed an agreement for Nord Stream 2, which will double the capacity of the Russo-German network from 55 to 110 billion cubic meters per year. Turkey wants to send natural gas to Europe in order to earn transit fees and receive discounts on energy prices, but also to increase her geopolitical importance. If the Russians are flooding Europe with Russian gas through Germany, that goal becomes much harder for Turkey. After the Russians made the Nord Stream 2 agreement the Turks announced they would freeze discussion over the Turk Stream pipeline. The Turk Stream pipeline is a Russo-Turkish pipeline which will send Russian natural gas to Europe through Turkey. Turkey of course prefers the Southern Energy Corridor (TANAP-TAP) which will provide Europe with an alternative for the Russian gas. The Turks have always made it clear that they are interested in the Turk Stream project as long as it does not pose a threat to the Southern Energy Corridor, and that’s something that really annoys the Russians.

In August and September 2015 some major events took place. The Kurds of the PKK, which are mainly supported by Russia, attacked the South Caucasus Pipeline (Azerbaijan-Georgia-Turkey). The Islamic State (ISIS) carried out its first attack in the Russian province of Dagestan. The Russians signed the agreement for the Nord Stream 2. The Turks announced they are freezing discussions for the Turk Steam Pipeline. The Russians increased their military presence in Syria. Therefore the increased Russian presence in Syria has three targets i.e. ENI, Israel and Turkey.

Everything I say is a simple discussion of what is happening today, and it does not mean that any of it will come true. Russia might sort things out with ENI, Israel or Turkey. I do not know what I will happen tomorrow. I am only discussing what is happening today.

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