2 Jul 2020 14:20

Primakov Readings: EastMed gas pipeline has neither economic nor political grounds - experts

MOSCOW. July 2 (Interfax) - The project to build the EastMed pipeline to carry gas from offshore fields between Cyprus and Israel to other Southeast European countries has neither sound political nor economic grounds, say participants in the Primakov Readings, organized by Interfax and the Institute of World Economy and International Relations (IMEMO) of the Russian Academy of Sciences.

Greece, Israel and Cyprus signed an agreement to build the pipeline in January. But "on the other hand, Turkey and the Libyan Government of National Accord in November last year signed a memorandum on military cooperation and on understanding regarding the offshore zones that virtually draw a vertical line through the Mediterranean Sea, undermining plans by Greece, Israel and Cyprus to prospect for oil and gas in the zone," said Pavel Korolev, Vice President of the Global Energy Association. The gas pipeline might be routed between Cyprus and Greece, but Turkey says in the memorandum that this is its territory.

Nikolai Surkov, a senior fellow at the IMEMO Center for Middle Eastern Studies, said the pipeline was "unlikely, both politically and especially economically."

Gas prices are plummeting, "and they face losses from the point of view of the cost of producing gas in the region and exporting it to Europe," Surkov said during an online session of the Primakov Readings entitled "The Middle East in the Modern World: 'Hostage to Time.'" "Economists agree that it would be simply unprofitable to export gas from the East Mediterranean to Europe at current lifting costs," he said.

"From the political point of view, Cyprus has an obsession with this project. They would very much like to connect themselves to Greece somehow, to once again demonstrate their own significance, to make other countries get involved in solving the North Cyprus problem. But it is absolutely unclear who will put up the money for that. Another aspect is that the agreement between Libya and Turkey effectively blocks the pipeline's construction. But if there's the political will then it will always be possible to come to terms. I have a feeling that the Turks see this pipeline as a reason for bargaining: they might reach agreement with Cyprus to build the pipeline in return for concessions of some sort, for example on North Cyprus, because it is very important for Erdogan to guarantee Turkey's right to drill on the North Cyprus shelf. Alternatively, this could turn into potentially a very serious conflict," the expert said.

Aleksandr Aksenenok, Vice President of the Russian International Affairs Council and Ambassador Extraordinary and Plenipotentiary, said the initiative was still at an early stage. "It is too soon to evaluate the prospects. This agreement between Greece, Israel and Cyprus is so far a framework agreement, more a memorandum of understanding which the European Union as a potential source of funding is already picking up on," he said.

Vasily Kuznetsov, leading research fellow at the IMEMO Center for Middle Eastern Studies, questioned the strength of the agreement signed by Ankara.

"The agreement between Turkey and the Libyan Government of National Accord is significant but should not be over-estimated because the House of Representatives, Libya's internationally recognized legislature, has not yet ratified it. Moreover the interim government of East Libya is in talks to sign a similar agreement with Greece. So here the legal aspect of the Libyan-Turkish agreements can easily be revised if the political situation inside Libya changes," Kuznetsov said.

The European Union assigned Project of Common Interest or PCI status to the EastMed project at the end of 2015 and has already paid 2 million euros for a feasibility study. It is expected Brussels will decide not later than 2020 whether the EU will take on half the project's overall cost, currently an estimated 7 billion euros. Greece's DEPA and Italy's Edison would undertake the remainder of the funding via the IGI Poseidon joint venture.

The EastMed pipeline would be around 2,000 kilometers long with the capacity to 12 billion cubic meters of gas per year. It would be launched in 2025-2026.


The further financial and economic fragmentation of Libya and its oil market will lead to the country's division, Vasily Kuznetsov said.

Commander of the Tobruk-based Libyan National Army Field Marshal Khalifa "Haftar has long been in control of those [oil fields], but the main question, which existed earlier and persists, is whether it is possible to establish an alternate oil company and an alternate central bank, so that oil transactions could go via the country's east, instead of through Tripoli," he said.

"Most members of the international community, including Russia, will speak against that, considering that the GNA (Government of National Accord) remains the internationally recognized government. But, if fragmentation of the financial and economic field, as well as the oil market, is finalized in Libya, that will be another step toward the country's division," Kuznetsov said.


The Primakov Readings also addressed Syria. Aleksandr Aksenenok said that unconditional support for the regime of Bashar al-Assad in Syria could make Russia hostage to the "enormous ambitions" of Damascus.

"Speaking of prospects, currently, the policy of full and unconditional support for the Assad regime is fraught with major complications for Russia, " Aksenenok said during the online session.

There has been another wave of public discontent in Syria, not just social, but also against the regime; the socio-economic situation in the country is "catastrophic," he said.

"No doubt, Russia is doing everything it can to help Syria. Reconstruction is out of the question, as is economic recovery. This is about survival: helping to survive as much as possible," Aksenenok said.

The Syrians are demanding far greater financial clout and humanitarian aid, and whether Russia is ready for this is a "big question," he said.

"If Russia entirely associates itself with all the failures and errors of the Syrian regime, there is a danger of it becoming hostage to Damascus's enormous ambitions, its narrative of a past long gone," Aksenenok said.

Damascus thinks that Russia needs Syria more than Syria does Russia and is trying to portray the bilateral relationship as a "full and harmonious union," which would not be possible even between allies, he said.

The Syrian conflict, however it concludes, could give rise to other conflicts and, under certain circumstances, might even spur normalization of the relations between Russia and the United States, "or, at least, the cooling down of the confrontation," Aksenenok said.


Turkey's purchase of Russia's S-400 systems was also a topic for discussion at the July 1 readings. Ankara will continue its course as a member of NATO, as it is its priority is a priority, even after the purchase of S-400 systems from Russia, head of the Center for Middle Eastern Studies of the Russian Academy of Sciences' IMEMO Irina Zvyagelskaya said.

"The very fact of the purchase of S-400 systems was very important for Turkey not only from the point of view of boosting its security, but also politically. Being a NATO member, the southern flank of NATO, having fairly tense relations with the United States at that moment, Erdogan had to demonstrate that he could make far-reaching decisions, despite the obligations associated with being a NATO member," Zvyagelskaya said.

"It doesn't at all follow that Turkey will ever question the need to be a NATO member, in any case, this will be a priority for it," she said.

Turkish President Recep Erdogan showed his independence when he bought those systems from Moscow, Zvyagelskaya said.

"As far as I know, they were supplied with certain flaws, because we have this system in operation. I don't know if he will continue buying them: the Americans really exerted fairly serious pressure," she said.

Vitaly Naumkin, a researcher with the Institute of Oriental Studies at the Russian Academy of Sciences and a member of the Russian Academy of Sciences, said Turkey will have to take "a second test" if the United States really offers to buy the S-400 systems from Ankara. "It's an interesting moment, which may or may not happen. It's a second test for Turkey to show its independent decision-making," Naumkin said.

The Primakov Readings is a new joint project of Interfax and the Institute of World Economy and International Relations (IMEMO) of the Russian Academy of Sciences. As part of the project, Interfax will host a number of online meetings of experts, politicians, and public figures that will address topical problems and international relations, as well as the global economy amid the crisis. The project is supported by the Chamber of Commerce and Industry, the Gorchakov Foundation, and the Moscow World Trade Center.

The previous sessions of the Primakov Readings were held in June:

"U.S. can't afford to contain both Russia and China - experts,"
"TAPI's future to remain hostage of politics for long time - experts,"
"Cancellation of EU restrictions against Russia unlikely in near future - Russian diplomat,"
"Russia to remain negative factor in U.S. domestic politics - Deputy FM Ryabkov."

Interfax, IMEMO to hold the final online session as part of the Primakov Readings with participation of Russian Foreign Minister Sergei Lavrov,  titled "Russia and the post-Covid world," at 11 a.m. on July 10.