The three-way summit between Israel, Greece and Cyprus that took place this week in Jerusalem has regional ramifications due to the tightening of the alliance against the common threat of Turkey. the meetings between the leaders of the countries and the ministers also yielded important economic developments. One of them is the plan to connect Israel’s offshore gas fields, Leviathan, Tamar and Karish-Tanin, to LNG (liquefied natural gas) facilities in Cyprus. This was told to "Globes" by an Israeli and a Greek official who attended the summit.
The countries believe that the expected revenues from such gas exports would persuade private companies to finance the deployment of the relatively short pipeline, so that the governments themselves will not be required to provide financing for the project.
In the more immediate term the deployment of electricity power lines between Israel and Cyprus is expected to begin on the ground, as part of the interconnector project to connect the Israeli electricity grid with the EU grid..
Since taking office as Minister of Energy and Infrastructure, Eli Cohen has examined a number of options for decentralizing Israeli gas export capabilities, such as onshore LNG facilities or floating offshore (FLNG) facilities.
Today, Israeli gas is only exported to two countries: Jordan, which has a very small domestic economy, from which the Pan-Arab (Fajr) pipeline branches south towards Egypt and Syria and even Lebanon in the north. The second country is a separate pipeline that runs directly from Israel to Egypt, which must cope with many challenges. Egyptian consumption stands at about 70 BCM of natural gas per year, with domestic production set to drop to 45 BCM by 2024, creating a gap of about 25 BCM that is filled by imports, including from Israel.
At the same time, Egypt is facing a prolonged economic crisis and wants to find a way to liquefy gas in its LNG facilities, and profit from the difference between the price at which it purchases from Israel and the price of LNG on the open market. These needs led Egypt, despite severe criticism at home and in the entire Muslim world, to sign a huge deal with the Leviathan partners to procure 130 BCM for about $35 billion.
Extensive exports to Egypt
According to the Ministry of Energy and Industry, last year Israel exported 13.2 BCM, and produced 13.9 BCM for the domestic economy. In comparison, in 2020 the ratio was 4.3 BCM for exports and 11.8 BCM for the domestic economy. The reason for that jump in exports is Egypt, which began importing natural gas from Israel in 2020 with a quantity of 2.2 BCM in that year, which grew consistently, including during the war, up to 10 BCM by 2024.
Unlike Egypt, exports to Cyprus are not intended for the Cypriot energy economy. The exported gas will be conveyed to LNG facilities that will be built on the island and connected to Israeli fields for the purpose of liquefaction. The advantage of the process over a pipeline is that liquefied natural gas can be carried in tankers, like oil. Thus, in addition to the price advantage, there is no limit on the scope of exports, and the LNG can be sold on the open market worldwide.
"We are determined to promote joint energy projects," the Cypriot government said at the end of the summit, "including the development of natural gas, electricity interconnection and renewable energy initiatives, as foundations for regional cooperation, based on international law, and respect for all the rights of the countries of the region to their exclusive economic waters and continental shelves."
The reference to international law is a direct message to the common threat to Israel, Greece and Cyprus - Turkey - which is at odds with all the countries in the region except Libya over the boundaries of the economic waters in the eastern Mediterranean, primarily because Turkey is not a signatory to the Continental Shelf Convention and the UN Convention on the Law of the Sea.
While the prevailing view in the international community is that islands constitute independent units entitled to a continental shelf and territorial waters of up to 12 nautical miles, Turkey sees the islands as a direct extension of Anatolia. In their view, earthquakes have caused water to enter between the mainland and the islands, including Cyprus. These differences in perception have in fact led to a kind of compromise, according to which each island is currently entitled to only six nautical miles.
Turkish regional anger
Another issue concerns the status of Cyprus itself. Following a Greek-nationalist military coup in 1974, Turkey invaded Cyprus, and in 1983 it led to the establishment of the Turkish Republic of Northern Cyprus - an entity that only Ankara recognizes. Based on this recognition, Turkey claims economic water rights to which Northern Cyprus is entitled.
Connecting Israeli gas infrastructure to Cyprus is expected to add to the already existing regional Turkish anger, specifically over Lebanon. Recently, Turkey expressed firm opposition to the ratification of the maritime border agreement between the Republic of Cyprus and Lebanon, and is even holding talks to formulate a Turkish-Syrian maritime border agreement with Syrian President Ahmed al-Shara, who is under Erdogan’s patronage. Such an agreement could come at the expense of Cypriot maritime zones, including those where the connection from Israeli gas fields is expected.
Published by Globes, Israel business news - en.globes.co.il - on December 25, 2025.
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