Strategically located between Israel, Syria, Turkey and Egypt, Cyprus is an extremely popular tourist destination, especially for wealthy Israelis, Lebanese and Russians. In the past it was also known as a tax haven. The probable natural gas deposits on the coast of the island (experts are talking about 14 large deposits) seem to be changing the facts in recent years. Many Cypriots hope that their country will acquire an upgraded role in the wider Eastern Mediterranean region.

Cosme Oyeda, a professor at the University of San Pablo in Madrid and an expert in the Eastern Mediterranean, expresses the hope that the exploitation of the deposits can provide an additional impetus for peace in the Middle East, as well as the rapprochement of Greek Cypriots and Turkish Cypriots. “These deposits can provide a significant ‘prosperity injection’ for all involved,” says Oyeda. “No one can implement such important infrastructure projects alone. Even former enemies are sometimes forced to cooperate in their implementation.”

Israel-Hamas deal?

At the moment, the geopolitical coordinates are different, as the war in Gaza shows, with Cyprus clearly siding with Israeli interests and Turkey criticizing Israel in high tones. Moreover, argues Eli Rettig, assistant professor of political science at the Sadat Center for Strategic Studies (BESA), the recent tensions between Germany and Russia over the Nord Stream pipelines have probably discouraged would-be investors. However, “the natural gas fields that have been identified in the Middle East could reduce the importance of other providers, such as Qatar, as well as the dependence on them,” notes the Israeli analyst. That is why he believes that Qatar, as well as countries such as Turkey, Russia and Iran, have every interest in maintaining the conflict with Hamas.

And all this, Rettig notes, at a time when energy cooperation seemed to even lead to a rapprochement between Israel and Hamas. “There was a draft agreement between Israel and the government in Gaza, which has not been made public, that provided for the joint exploitation of the Gaza Marine Coworking field,” the Israeli expert says. “Such an agreement would significantly improve Israel’s relations with the Palestinians, with positive implications for the wider region.” However, the plans have been “frozen” following the Hamas terror attack on Israel.

LNG Pipelines or Storage?

In recent years there have of course been other cooperation agreements or protocols between the countries concerned, for example Israel with Lebanon or Cyprus with Greece. “But so far no binding treaty has been signed,” Rettig emphasizes. Interest in the import of natural gas from Cyprus, an EU member country, has also been shown by German Chancellor Olaf Scholz, who, last May, welcomed the president of Cyprus, Nikos Christodoulidis, in Berlin. Energy giants such as Chevron, Total Energies and Eni are already operating near the Cypriot coast.

As the transport of liquefied natural gas (LNG) is a simpler short-term solution than the expensive construction of a pipeline, the government of Nicosia now wants to invest, as soon as possible, in an LNG terminal on its territory. The issue is that Turkey also lays claim to underwater deposits in Cyprus. Interest (which, however, did not continue…) had previously been shown by Russia, which in 2013, when the banking and financial crisis broke out in Cyprus, had intervened to support the Cypriot economy by providing a loan.

Reducing dependence on Russia

For Cyprus, the utilization of natural gas offers an opportunity to get rid of the Russian factor. Speaking to DW before the start of the war in Gaza, the Cypriot expert in digital technology Kyriakos Kokkinos, said that the upgrading of economic relations with Israel would also contribute in this direction. He has been Chief Scientist in Cyprus (Head of Scientists for Research and Technology). As he explains, “this position was established by the Israelis and we adopted the same idea, because we also want to develop into an international research and technology center”. The utilization of natural gas, the Cypriot expert believes, would constitute a bridge of economic cooperation to the wider region.

All this has not changed since the terrorist attack by Hamas, points out the Israeli expert Eli Rettig. In fact, the original plan drawn up by the Noble company envisaged the start of natural gas extraction in 2018. In addition, in 2022 the governments of Lebanon and Israel signed a historic agreement for the joint exploitation of natural gas fields. The war in Gaza seems to be delaying the implementation of the plans. “We are seeing a constant review and rearrangement of power relations, a lot of patience is needed,” comments analyst Cosme Oyeda.

PPC Quantum Energy’s plan to connect Cyprus with the rest of Europe and Asia with an undersea electric cable, which will be the largest in the world, looks promising. Eli Rettig believes that, under the current circumstances, this plan has a better chance of being implemented than the construction of pipelines. These plans do not include Turkey. But Rettig believes that with this particular project “the Turkish government would have fewer problems than with a natural gas pipeline connecting Greece to Cyprus”.