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The European Commission (EC) has proposed a deal to the member states that could lead to an increase of natural gas imports from Egypt and Israel, reported Reuters, citing a draft document that it had seen.
This draft memorandum of understanding (MOU ) is part of the European Union ’s (EU) efforts to reduce its reliance on Russian natural gas imports in the wake of Moscow’s military incursion on Ukraine.
The MoU is still subject to changes and requires ratification from the governments.
The nine-page document reads: “The natural gas to be shipped to the European Union will originate either from the Arab Republic of Egypt, the State of Israel, or any other source in the East Mediterranean region, including EU Member States in the region.”
Although the EU has stated publicly it plans to conclude a deal with Egypt and Israel before summer, the details stated in the draft document have not been made public.
EU Commission President Ursula von der Leyen is expected to be in Egypt next week. It is, however, not known if the MoU will be signed during the visit.
The draft document details the key principles laid out for fuel cooperation between the EU, Egypt, and Israel. Despite this, it does not indicate how much gas would be imported to the EU or the delivery timelines.
According to the document, the MoU would be valid for nine years from the date of the signing, although this is likely to change.
Israel and Egypt are planning to increase production and exports in the years to come.
In 2021, Egypt exported 8.9 billion cubic metres (bcm) of LNG, and 4.7bcm until May 2022, as per the Refinitiv Eikon data. The majority of its exports go to Asia.
Israel is expanding its projects and bringing new fields into production. It intends to double its annual gas production to nearly 40bcm in a few years, according to industry officials.
Israel expects to strike a gas supply deal with Europe and is also looking at building a pipeline to export more gas to Egypt.
In 2021, the EU imported 155bcm of gas from Russia, which represents approximately 40% of its total consumption.
The document reads that the parties “will work collaboratively to set forth the appropriate ways and means for implementing the purpose of this memorandum of understanding in order to expedite the export of natural gas to the EU.”
The MoU does not place any binding legal or financial clause on the parties, the document said.
The EU could also finance new infrastructure in Egypt if the projects are aligned with its commitment to not encourage investments into fossil fuel infrastructure projects in countries, “unless they are fully consistent with an ambitious, clearly defined pathway towards climate neutrality”.
The EU may also provide funds to develop technologies that help to mitigate emissions and lead to natural gas decarbonisation.