THE VIABILITY OF A MEDITERRANEAN ENERGY HUB AND THE INTERESTS OF EUROPEAN UNION AND RUSSIA; COMMON OR CONFLICTED?

It has been a decade since the Southeastern Mediterranean region came to the forefront after the discovery of significant gas deposits in offshore fields located within the Exclusive Economic Zones (EEZ’s) of Egypt, Cyprus and Israel. Gradually, the region drew the attention of major oil companies (Total, Statoil, ENI, Exxon Mobil, BP, Rosneft Qatargas) who proceeded in a series of drilling operation projects in order to share the exploitation of the potential regional gas deposits with the involved countries in the future. Τhe aim of this paper on the first level, is to investigate the viability and competitiveness of a forthcoming energy hub in Southeastern Mediterranean, its role and the inevitably fierce competition by other well-established or emerging gas producing areas. In this task, there are a number of direct and indirect parameters that need to be taken under deep consideration. For example, the dominant options of implementing a Mediterranean energy hub, translated into the construction of the EastMed Pipeline or the promotion of an LNG Terminals Network respectively. On the second stage the paper examines and evaluates the interests of European Union and Russia in terms of energy demand and supply. Undoubtedly, the European Union is reconsidering its energy policy, seeking to enhance its steady gas supply by implementing a strategy of diversification in counterparts, routes and sources. On the other hand, Russia’s energy policy is aiming to raise market share and global influence. Is there any common ground?


Introduction
E nergy has always been a key component of enhancing European sustainability and welfare. Since 2008, the global economy has entered into a new era of economic instability, where globalisation faces protectionism and transnational relations are tested while, in reference to Europe and Eurasia, a new pillar is emerging and it is called Energy Geopolitics. Since 2009, the region of the South-East Mediterranean holds the lion's share of world's interest as the first potential gas deposits in the Levantine Basin came into light. On a pragmatism level, the proven reserves could supply the involved countries (Egypt, Israel and Cyprus) with sufficient quantities of gas and provided them with the appropriate energy independence in order to meet the needs of their domestic markets.
As global oil prices seem to stabilise around USD65-USD75 per barrel and the drilling technology is being updated in a cost-saving direction, the region draws again the attention of major oil and energy companies; the ongoing drilling operations of which, are bringing into light new potential reserves of many trillion cubic feet in offshore blocks of Cyprus. Under this scope, different energy policies come to the forefront as there is a vast necessity to ensure Europe's energy independence in turbulent times. Europe seems to be willing to reduce its energy dependence from Russia, by promoting alternative options, such as the future exploitation of Southeast Mediterranean gas deposits, among others. As a result, the status quo of the region and its energy impact on a worldwide level are about to change.
It needs to be pointed out though, that market dynamics of the global energy sector seem to be very fragile nowadays and status quo is changing; traditional players such as OPEC (mainly Saudi Arabia) seem to step aside via production cuts, while newcomers such as the US (via shale oil and gas production), Russia (via gas production in the Arctic), Qatar (via gas production in South Pars field) and other energy superpowers come to the forefront. Additionally, in terms of consumption, the lion's share is being concentrated in Asia (China, India, Japan and South Korea) under the implementing decarbonisation policies towards a new "green era".
The implementation of a Mediterranean energy hub consisted of Cyprus, Israel and probably Greece, through their gas deposits, creates numerous economic and geopolitical benefits to European Union and the countries involved. Attracting investments and a boost in the regional LNG trade through a potential worldwide acceptance of East Mediterranean gas are only some of the benefits. Additional factors such as close proximity to key maritime routes, the dominance of Greek LNG shipping sector and the existence of all the appropriate infrastructure (port terminals, refineries, shipyards, human capital) ensures Europe's will for gradual energy independence. On the other hand though, it should seriously taken into deep consideration that proven difficulties such as conflicted geopolitical interests, high infrastructutre costs and competitiveness in terms of pricing by other global gas suppliers (Russia, the US, Qatar etc.) and networks, might jeopardise the Mediterranean Energy Hub Project on the long term.

Facts and Figures
It is widely known that the European Union is mainly an energy consumer and not a producer. In the last decade energy production levels in Europe have declined, from 471 million tons in 2007, to 301 million tons in 2017, a decrease of 36%. In terms of global production levels,

Source: BP Statistical Review of World Energy -June 2018
European Union holds a market share of only 2,6%. On the contrary, in 2017 European Union holded 13% of the world's primary energy consumption, reaching 1689 million tons. It is more than obvious, that European energy needs outpace production levels by almost five times. Consequently, in order to support its heavy industry, European Union adopts a diversified energy policy that includes the use of oil, natural gas, coal, nuclear energy, hydroelectricity and renewable energy as it is depicted in Figure 1.
Oil and natural gas account for 62% of energy consumption in Europe 1 . It needs to be pointed out though, that EU's energy consumption levels have been declined in the last decade by 7,4%, due to certain reasons, such as the economic recession, supply disruptions of Russian gas and weather conditions. It is of massive importance though, the increasing use of renewable energy in power generation (wind and solar parks). European Union's change of direction towards "green energy projects" is clearly depicted in Table 1. Global economy seems to enter in a recovery mode period and so does the European Economy. The global GDP growth for 2018 stood at 3,6% and European GDP growth for the same year was 2,2% respectively 2 .
Furthermore, it should be highlighted that since 2014 EU's energy consumption levels are again on the rise, by achieving a 3,8% growth on a three-year basis, as depicted in Figure 2.

European Gas Demand
Despite the fact that global economy is on a recovery mode, many analysts project that, by 2040 natural gas will be the primary source of energy, not only as it refers to the European Union's energy needs but also, on a worldwide level 3 . The re-shape of global gas market is based on: a) consecutive shutdowns of coal plants around the globe, b) the rise of Asian gas demand (mainly attributed to China's energy shift) 4 , c) the optimisation of drilling costs and d) the new drilling technology (such as fracking) that has led to US shale revolution. Moreover, gas might well play an increasing role in the transportation sector, as a fuel for trucks and vessels (lng-fuelled) 5 .
As it refers to the European Union, gas is an essential component of the region's energy mix by constituting 24% of primary energy consumption, contributing mainly to electricity generation, heating and fuel for industry and transportation 6 . On a worldwide level, European gas demand holds a share of 12,7%; during the last decade it have plunged from a peak of 505 billion cubic meteres (bcm) in 2007, to 401 bcm in 2014, in order to rise again in 2016 (due to lower global energy prices) at 449 bcm and reach 467 bcm in 2017, as depicted in Figure  3. Currently, gas demand in Europe seems to be in a modest process, totally corellated with the economic recovery of the Union. On the contrary, the annual gas production in the European Union during the last decade is on a declining mode, from 197 bcm in 2007 to 118 bcm in 2017, covering only 25% of European gas needs.
European Union holds only 0,6% of world total proved gas reserves, translated into 1.2 trillion cbm (or 41.7 trillion cbf). If the analysis proceeds into a wider region, Eurasia for example that holds 32% of world's proven gas reserves (62.2 trillion cbm), it comes as no surprise why Europe targets on specific regions in its eastern borders, such as Russia, Ajerbaijan and others, in order to cover its energy deficit. In 2017, European Union's natural gas trade movements that took place by pipeline stood at 423 bcm (86% market share) while the LNG imports -via LNG vessels-stood at 66 bcm (14% market share). The European Union imports natural gas via pipelines mainly from Russia and Norway, accounted for 189 bcm (40%) and 109 bcm respectively, while in terms of LNG imports (via vessels), Qatar supplied 24 bcm and Algeria 14 bcm respectively.

Source: BP Statistical Review of World Energy -June 2018
It is more than obvious that European Union's energy needs are highly depended on a small number of external suppliers and that exactly had generated over the years a broad european debate on the issue of gas supply security 7 . Moreover, after consecutive and long lasting gas disruptions in many European countries amid Russian-Ukranian disagreements on pricing and other geopolitical issues, the European Union took the decision in 2008 to launch a strategic plan about the diversification of its gas supplies. Furthermore, the recent findings in Eastern Mediterranean gas deposits support the European Union to achieve a steady and reliable gas supply by implementing a strategy of diversification in counterparts, routes and sources 8 .

Facts and Figures
In the last decade, energy consumption levels in Russia are on a modest rise, from 673 million tons in 2007 to 698 million tons in 2017, holding only 5% of market share worldwide in terms of energy consumption. Russia uses mainly oil and natural gas (74% market share), at lower rates coal, nuclear energy, hydroelectricity and almost no renewable energy as it is depicted in Figure 4.

Source: BP Statistical Review of World Energy -June 2018
It is widely known that Russia adopts an energy policy that targets in increasing production levels and since the latter outpace Russia's consumption levels -by almost twice-there is enough room for export activity. Russia holds 11,5% of world energy production in terms of oil, natural gas and coal, as it is depicted in Table 2. Moreover, in the last decade, energy production levels in Russia are on the rise, from 1158 million tons in 2007 to 1307 million tons in 2017, an increase of 12,8%, as it is depicted in Table 3. Oil and natural gas hold the lion share in Russia's production levels with 84%. Право и управление. XXI век

Russian Gas Production and Exports
Gas is an essential component of Russian energy policy, consisting 42% of primary energy production. Moreover gas production levels achieved a 5,6% increase in the last decade reaching 636 billion cbm, as it is depicted in Figure 5. Russia is also the second largest gas producer worldwide, following the US with 735 billion cbm in 2017.
As it refers to proved gas reserves, Russia holds the world's largest ones with a market share of 18% and 35 trillion cbm (1235 trillion cbf). Most of these are located in large natural gas fields in West Siberia (Yamal-Nenets region) 9 . The state-run Gazprom dominates Russia's natural gas sector with a 65% market share in terms of production 10 . Other important Russian energy companies are Novatek, Rosneft and Lukoil. Source: BP Statistical Review of World Energy -June 2018

Source: BP Statistical Review of World Energy -June 2018
It comes as no surprise that Russia targets on its global energy dominance. As it is already mentioned, since the mid-2000s, natural gas consumption in The Organization for Economic Cooperation and Development (OECD) Europe has generally been flat to declining, prompting Russia to look to Asia and LNG as means to diversify its natural gas exports. Furthermore, the US and European Union sanctions, implemented in 2014, accelerated Russia's pivot to the east, with Russia to begin pipeline supplies -via "Power of Siberia Pipeline"-to China in late 2019 in order to achieve an important market share by 2025 11 .
In 2017, Russia's natural gas trade exports that took place by pipelines stood at 215 bcm (93% market share) while LNG exports -via LNG vessels-stood at 16 bcm (7% market 9 Five of Gazprom's largest operating fields in the region are Yamburg, Urengoy, Medvezhye, Zapolyarnoye and Bovanenkovo 10 Gazprom until recently had a legal monopoly on pipeline gas exports 11 "Power of Siberia: Russia's mega gas pipeline to China almost complete", Russia Today (2018, September 6) available at https://www.rt.com/business/437753-power-of-siberia-china/ share). Russia's main natural gas importervia pipelines-is Europe with 189 bcm mainly allocated between Germany and Turkey, while in terms of LNG exports, the Asia-Pacific region remains the sole destination of 15 bcm in 2017, with Japan holding the lion's share with 10 bcm.
On the other hand, in 2017 Russia presented a limited importing activity via pipelines, with 12.1 bcm of natural gas from Kazhakstan and 6.7 bcm from of natural gas from Uzbekistan.

Russian Engagement in the Arctic
Russia's economic growth is driven by energy exports, given its high oil and natural gas production mentiond above. Oil and natural gas revenues accounted for 36% federal budget revenues in 2016 12 . In the last decade though, Russia's economy faced two recessions: a) between 2008 and 2009 due to the outburst of global economic crisis and b) between 2014 and 2015 due to the sanctions imposed by European Union and the US after the annexation of Crimea, translated into lower energy imported volumes. In the meantime, between 2011 and 2013, Russia recorded an economic slowdown, as it is depicted in Figure 6.

Source: IMF
Since 2016, Russian economy is recording concecutive growth, as depicted in Figures 6 and 7, mainly attributed to stable energy prices and the strategy of contracting efficient and long lasting energy agreements. Economic recovery through a rapprochement with European union has paved the way for Russia to strengthen its strategy about the exploitation of its reserves in the Arctic coast alongside Siberia, as depicted in Map 1. According to 2016 data, 93% of Russia's natural gas production is taking place in the Siberian region (West/East Siberia and Far East), with Yamal-Nenets and Sakhalin regions holding the lion's share 13 .

Figure 7. Russia's Gross Domestic Product 2007-2018 (in trillion dollars)
Source: IMF Право и управление. XXI век Since 2009, Russian Gazprom operates a large-scale LNG export facility, the Sakhalin Basin, with the majority of LNG contracted to Japanese and South-Korean buyers under long term agreements. The annual capacity of Sakhalin LNG Basin is 10 million tons of lng. In 2013, Russia modified its Law on Gas Exports to allow Novatek and Rosneft to export LNG, breaking Gazprom's monopoly on all natural gas exports. The second operative Russian LNG project is, Yamal Plant which began production in 2013. Owned by a Consortium of Novatek (50,1% stake), Total and China National Petroleum Company-CNPC (20% stake) and the Silk Road Fund (9,9% stake) it has an annual capacity of 16.5 million tons of LNG, a great part of which is about to supply China via the "Power of Siberia Pipeline" 14 .
To export LNG from its arctic location to Far East or Europe, Yamal Plant had commisioned the construction 16 ice-class tankers 15 . As it refers to Far East, the ice-class tankers transfer LNG cargoes during most of the year, transiting the Arctic Ocean and the Bering Strait. Europe on the other hand, imports Yamal cargoes via ship-to-ship transfers in Norwegian waters, a procedure that finds the opposition from the US 16 . By transferring LNG to more conventional tankers in Norway, the Arctic vessels cut in half the distance they would cover to deliver gas to Europe, enabling more frequent shipments from the Novatek terminal and increasing Russia's gas exports.
Russia also plans to build a number of large-scale LNG projects across Arctic, Pacific and Baltic coasts, such as Arctic LNG-2, Baltic LNG, Far East LNG eand others, while in 2019 the Kaliningrad FSRU begun operation. The exploitation of the above projects is taking place via consortia consisted of Russian energy companies Rosneft, Novatek, Gazprom, Western companies ExxonMobil, Eni, Statoil, Total, Shell, Asian companies and financial institutions. All things considered, Russia seems to win the race to develop Arctic Energy 17 .

Feasibility of a Mediterranean Energy Hub
As it was refered, the European Union strongly promotes the enhancement of its internal energy market in order to foster steady natural gas flows between its member states and since 2008 it studies the promotion of a -European based-Southeast gas corridor, based on potential resources of the Eastern Μediterranean region 18 . The implementation of a such an energy corridor is recognised as one of highest energy security priority for the European Union.

Source: Total
In 2009, Noble Energy Inc. discovered the first major gas deposit of 250 bcm capacity in Israel's Tamar Field. In 2010, a more important gas deposit of 476 bcm was also discovered in Israel's Leviathan Field. In 2011, Noble Energy discovered a gas deposit of 170 bcm in Cyprus' Aphrodite Field (Block 12). The first round of major gas discoveries in Eastern Mediterranean ended with 2015 ENI's discovery of the biggest -so far-gas deposit, Zohr Field with a capacity of 850 bcm. All the above reserves are depicted in Map 2.
As a result, in less than a decade the Southeastern Mediterranean came to the forefront of the global oil industry's concern by shaping new regional geopolitical balances. The above gas discoveries totaling 1.7 trillion cbm did not reveal a sufficient amount of reserves that would ensure a steady gas supply to Europe on a permanent basis. Instead, the pragmatic scenario ordered the coverage of involved countries domestic needs on a first phase and until new larger discoveries come into light.
In July 2017 Total and ENI began drilling operations in Block 11 of the Cyprus EEZ, as it was expected to hide immense quantities of gas, similar to the neighbouring Egyptian megagas field, Zohr. In February 2018, Total and ENI officially announced that a lean gas discovery in Block 6 (Calypso) offshore Cyprus -a region under dispute with Turkey-has been made of about 170-227 billion cbm (6-8 trillion cbf) 19

Право и управление. XXI век
In early 2018, ENI's drilling operations on Block 3 of Cyprus EEZ were postponed after intense military presence by Turkish Navy in the region. In late 2018, Exxon Mobil and Qatar Petroleum proceeded with drilling operations on Block 10 of Cyprus -another disputed area with Turkey. Within a three months period the "Glaucus-1" gas deposit revealed a capacity between 142-227 billion cbm (5-8 trillion cbf) and an estimated value of USD40 billion 21 . According to the US Ambassador to Greece, the ExxonMobil's discovery affects the energy markets positively and boosts European Union energy security by reducing dependence on Russian natural gas 22 .
The promotion of Mediterranean Energy Hub and the exploitation of the above reserves can be so far implemented by two alternative options; a) the EastMed Pipeline Project that would connect Israel, Cyrpus and Greece's potential deposits, despite the fact that it would face a great competition from the existing European pipeline network 23 and b) the adoption of a Mediterranean LNG Terminals Network, cabable of storing and regasification of liquified natural gas, in order to take advantage of the regional maritime cluster and the geopolitical importance of regional infrastructures (port terminals, refineries and shipyards) that would probably boost mediterannean gas trade on a worldwide level.
In any case, the importance of promoting a Mediterranean Energy Hub is twofold: a) it enhances Europe's gas security of supply via diversification of routes and sources; b) it develops the European Union's indigenous resources such as the offshore gas reserves around Cyprus and Greece.

The EastMed Pipeline Project
The EastMed Pipeline Project refers to the construction of a combined offshore-onshore natural gas pipeline that would connect directly East Mediterranen gas resources of Cyprus and Israel to Europe via Greece.
Fulfilment of the project demands the additional construction of a complementary pipeline that will connect Epirus region (Greece) with the Italian region of Otranto. The project is being currently designed to transport initially 10 bcm annualy 24 , through 1.300 km of offshore pipeline and 600 km of onshore pipeline 25 , as it is depicted in Map 4.
The EastMed pipeline is preliminarily designed to have exit points in Cyprus, Crete, mainland Greece as well as the connection point with Italy. Furthermore, the pipeline would allow to feed Cyprus internal consumption with additional 1 bcm annualy.
The EastMed Pipeline Project was initially proposed in August 2010 and then aggresively promoted by Benjamin Netanyahu in 2011, especially after the deterioration of Turkish-Israeli relations that followed the Mavi Marmara incident. The Project was also strongly supported by Greece's Prime Minister of that time Antonis Samaras, as it was stated that EastMed pipeline was the only export project worthy of serious Greek diplomatic support.
In May 2015, under the support of the Cypriot, Greek and Italian governments, the European Commission declared the EastMed Pipeline as a Project of Common Interest (CPI)included in the second PCI list among other southern gas corridor projects 26 . The EastMed Project has also been included in the last Ten Years Development Plan (TYNDP), in line with the objective of the European Network Transportation System Operators of Gas (ENTSOG) in order to create a single European market for gas and a reliable and safe transmission network capable of meeting Europe's current and future needs. In 2015, the project was also awarded with European grants of EUR2 million through the Connecting Europe Facility Programme (CEF), necessary for the cofinance of the Pre-FEED studies on technical and commercial issues of EastMed Pipeline 27 .
In April 2017, Israel, Greece, Cuprus and Italy signed a preliminary agreement 28 to promote preparations for the construction of the pipeline. During 2018 the above nations proceeded in further advanced talks for the materialisation of the project 29 . Finally, in March 2019 and after recent gas discoveries by Exxon Mobil in Block 10 of Cyprus, the final intergovernmental agreement for the construction of EastMed Pipeline was decided to be signed at the second half of 2019, after the European Parliament elections 30 , under US consensus 31 . The project is expected to be completed and operative by 2025.
Furthermore, since 2019 Eastern Mediterranean countries have agreed to launch East Med Gas Forum (EMGF) in an effort to promote the region into a major energy hub, to ensure supply and demand and to offer competitive prices 32 . The countries that join EMGF are Egypt, Cyprus, Greece, Italy, Israel, Jordan and the Palestinian territories.

Contribution of EastMed Pipeline
The construction of the EastMed Pipeline could enhance European security of gas supply, in terms of developing European indogenous resources 33 . Greece and Cyprus are devoted to the principles of the European Union, consisting important pillars that provide sustainability in a very fragile region -political unrest in Turkey and Libya, Syria Civil War etc. It is common sence that the majority of international oil companies' stakeholders and certain political leaderships through Europe, under no occasion want to see Turkey's conversion into a major energy hub and Europe's energy needs to be determined by Prime Minister's Erdogan wills 34 . Moreover, alternative plans about promoting exports from Levantine basin through Egyptian LNG terminals (Idku and Damietta) instead of, for example, EastMed Pipeline seem to be quite a risky business, as the Egyptian government owes approximately USD 3,6 billion in international oil companies 35 . Greece and Cyprus remain two reliable and peaceful countries, willing to promote the interests of the European Union.
The EastMed Pipeline could be a project with huge political and economic cumulative 26 Official Journal of the European Union (2016), available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?u ri=OJ:JOL_2016_019_R_0001&from=EN 27 European Commission (2015), Innovation and Networks Executive Agency, available at https://ec.europa.eu/inea/ en/connecting-europe-facility/cef-energy/projects-by-country/multi-country/7.3.1-0025-elcy-s-m-15 28 Euractiv (2017), "Italy, Greece, Cyprus and Israel eye longest offshore gas pipeline", available at http://www. euractiv.com/section/energy/news/italy-greece-cyprus-and-israel-eye-longest-offshore-gas-pipeline/ 29 Geropoulos K., "Greece, Cyprus, Israel to disguss gas exports to Europe", New Europe (2018, December 14), available at https://www.neweurope.eu/article/greece-cyprus-israel-to-discuss-gas-exports-to-europe/ 30 Especially due to certain political difficulties in approaching the new Italian government 31 Geropoulos K., "Greece-Cyprus-Israel EastMed gas pipeline reaches Washington", New Europe (2019, March 14) available at https://www.neweurope.eu/article/greece-cyprus-israel-eastmed-gas-pipeline-reaches-washington/ 32 Geropoulos k., "East Med countries agree to create regional gas market", New Europe (2019, January 16), available at https://www.neweurope.eu/article/east-med-countries-agree-to-create-regional-gas-market/ 33 Tzogopoulos N., "The EastMed Pipeline could be a giant step towards enhancing regional security", BESA Perspectives (2017, June 22), available at https://besacenter.org/perspectives-papers/eastmed-pipeline-security/ 34 Ellis A., "Erdogan threatens gas companies", Kathimerini printed edition (2017, March 19), available at http://www. kathimerini.gr/901241/article/epikairothta/politikh/o-erntogan-fovizei-tis-etaireies-aerioy 35 Baconi, T. (2017), "Pipelines and Pipedreams; How the EU can Support a Regional Gas Hub in the Eastern Mediterranean", European Council on Foreign Relations, available at https://www.ecfr.eu/publications/summary/ pipelines_and_pipedreams_how_the_eu_can_support_a_regional_gas_hub_in_7276 impact on a regional and -probably-global level as well. The succesful operation of EastMed Pipeline would mean a lot especially for Greece and Cyprus, two countries that have been under strict European financial supervision in recent years and are in a high need to attract massive investment programs. According to IMF data, Cyprus' GDP reduced by USD7,8 bn between 2011 and 2015 due to banking sector issues and since then, it is achieving an extraordinary economic performance translated into an average annual growth of 3,8% between 2015 and 2018. On the other hand, Greece's GDP reduced by almost USD160 billion between 2008 and 2015. Since 2017, Greece has returned in positive annual growth rates of almost 2%. According to the Internatinal Energy Agency (IEA) estimates of the amount of proven reserves in Eastern Mediterranean (Israel, Cyprus and Egypt) could reach 2 trillion cbm, "a second Norway" as IEA's head Mr. Fatih Birol stated 36 . The above would have an indsiputable impact on strengthening of the local economies in terms of supporting entrepreneuship, reducing high unemployment rates and skilled workforce on the medium term. The development of the domestic gas market in Cyprus and Greece could generate thousands of jobs especially during the construction phase of the import infrastructure and the national and regional distribution network of pipelines 37 . The combined profits for Cyprus and Greece from direct sales of gas to regional markets could generate several billion of euros on a long term basis -ten years-as most of the profits would be generated from savings and investment on gas infrastructures 38 .

EastMed Pipeline: Viability and Barriers
In 2018, the results of the Pre-FEED studies confirmed that in the best case scenario the EastMed Pipeline is: a) technically feasible -since there is an important number of industry players to confirm their availability of infrustructure and equipment to secure the Project's realisation, b) economically viable -since according to current estimates the total project's cost and projected capital expenditures are going to be lower than other import projects in the European Union of similar capacity, securing gas prices from fluctuation, and c) supportive to other multiple export schemes -such as a Mediterranean LNG Terminals Network, since there is still a wide region under explore and so as, future discoveries. The EastMed Pipeline Project development activities are currently focusing on performing marine surveys along the route, in order to improve accuracy and to finalise preparation of the tender packages for initiating the proper development phase, that would allow the project to reach investment decision status.
The adoption of a modest scenario reveals important -but not-inaccessible barriers. The cost of constructing EastMed Pipeline is the main obstacle that needs to be overcome. The project demands a high capital investment of about USD6-USD7 billion due to certain technical challenges such as the unprecedented depth of three kilometres in Southern Crete that the pipeline must reach. High infrastructure costs would jeopardise the final gas prices that will have to rival the cheaper Russian or Qatarian gas, creating a very challenging condition 39 . A positive notion to the above claim is that many of the energy companies that have expressed interests in exploring Levantine gas fields are supermajors of the global oil and gas industry, fully expertised in similar project around the globe and all the appropriate equipment (platforms, drilling vessels, ultra-deep pipe laying vessels etc) and as a result could handle their operational expenses efficiently. It should be also mentioned that as global energy market remains fragile and global energy prices growth remain modest, energy companies' appetite in investments is clearly negatively affected.
In developing such projects, the energy companies invlolved are seeking third-party financing 40 . The project that will actually be developed is the one that can secure financing 36 Ellis A., "Eastern Mediterranean reserves equal to that of Norway", Interview of IEA's Executive Director Fatih Birol at Kathimerini printed edition (2017, July 31), http://www.kathimerini.gr/920695/article/proswpa/synentey3eis/ ta-koitasmata-ths-anat-mesogeioy-einai-san-ayta-ths-norvhgias 37 Giamouridis  EastMed Project faces competition from many similar existing or planned energy projects, that are goint to be analysed in chapters to come. In order to proceed as fast as possible, elimination of bureaucracy must take place. As it mainly refers to Greece, bureaucracy must be adressed by creating a friendly and safe investment environment 41 , with the minimum requisite state control and efficient offshore licensing rounds. For example, a licencing round in Greece may last between two and half to three years while in Cyprus it is completed in nine months. The Cypriot method tends to be profitable, as Cyprus in May 2017 received EUR103,5 million from signature bonuses with major energy companies.
On the political level, Israel is now convinced that the EastMed Pipeline is a project of common economic and geopolitical interest for the countries involved 42 , eliminating the alternative option of implementing an underwater pipeline from Levantine to Cayhan that will transfer gas to Turkey 43 . That would created an imballanced trade relationship and promoted Turkey's dominance in the region, as the main gas hub 44 . Moreover, an important aspect that should be adressed by the European Union has to do with Turkey's ambitions in the region Southwest of Cyprus 45 , as it has been stated to the United Nations many times already.

Promotion of an LNG Terminals Network in Eastern Mediterranean; an Alternative Option
In 2010 Noble Energy and Israel's energy company Delek proposed the construction of underwater pipelines linking Leviathan gas deposits and those in the Aphrodite's field with Vassilikos LNG Plant, a terminal with a projected annual capacity of 6.8 bcm annualy 46 . The project though was delayed due to the insufficiency of existing gas reserves as it is already mentioned. Since late 2018 and as Glaucus-1 reserves came into light, the Cypriot government promotes the construction of Vasilikos FSRU Terminal with a storage capacity of 125.000 cbm, capable to accommodate LNG carriers ranging in size from 120.000 cbm to 217.000 cbm 47 .
In 2018, DESFA's Revythousa LNG Terminal was expanded by adding a third tank, raising storage capacity to 225.000 cbm from 130.000 cbm and annual capacity at 7 billion cbm 48 . The expanded Revithoussa LNG terminal in conjunction with the Trans Adriatic Pipeline (TAP) and the Interconnector Greece Bulgaria (IGB) as well as a planned pipeline between Право и управление. XXI век Bulgaria and Romania will open new routes for natural gas supply in Europe, diversifying energy supplies in the Balkan region, which heavily relies on Russia for gas supplies. Indeed, in late 2018 and early 2019 Revythousa LNG Terminal imported from the US two LNG cargoes of 150.000 cbm and 170.000 cbm respectively 49 .
Moreover, a Floating LNG Terminal or Floating Storage and Regasification Unit (FLNG or FSRU) is promoted by Gastrade and Cheniere in Alexandroupolis 50 . The annual capacity of the project will be 6.1 bcm in a close proximity to the national pipeline network 51 . The project is also supported by the US on the political level 52 .
Τhe LNG Terminals Network is a solution promoted by the Greek-Cypriot maritime cluster. In such a case, there is strong fundamental as Greece operates the second largest fleet of LNG vessels in terms of capacity with a value of USD11 billion. According to Petrofin Bank Research 53 , the Greek LNG fleet is consisted of 105 vessels -17% of global fleet-with an average transfering capacity of 170.000 cbm per vessel, while the global fleet accounts for over 600 units. On the other hand, Cyprus plays a prominent role as a leading shipping and shipmanagement centre and continues to strengthen its position in the world shipping by providing a sound maritime infrastructure, favourable tax regime, competitive ship registration and annual tonnage tax rates 54 . Regional gas exports on a steady basis -via LNG vessels-could provide the Greek-Cypriot maritime cluster with robust cash flows and the national economies with financial stability 55 .
The imposed IMO policies in order to reduce sulphur emissions and a proposed dimension towards Green Shipping are widely discussed matters so far 56 . In such a case, there is a high potential for an LNG Terminals Network in East Mediterranean region, to provide LNG bunkering to vessels and serviving commercial shipping that takes place in the world's most intense maritime route, that of Asia-Europe. As many analysts agree, LNG is the marine fuel of the future 57 .
Finally, Poseidon Med II is a project cofunded by the European Union and involves three countries, Greece, Italy and Cyprus, six Mediterranean ports (Piraeus, Patras, Limassol, Venice, Heraklion, Igoumenitsa) as well as the Revithoussa LNG terminal, promoting LNG as a fuel in order to establish a well-functioning and sustainable market 58 .
It is more than obvious that there is a huge potential for establishing an LNG Terminals Network that could exploitate East Mediterranean gas reserves at the most profitable way. The uncertainty though remains upon whether all the above projects could operate collaboratively, under the same scope and incentives.

Pipeline Competition: Russian Existing and Future Networks
The existing Russian gas pipeline network to Europe consists of: a) Gazprom's "Nord Stream Pipeline" with an annual capacity of 55 bcm and a total length of 1225 km connecting Russia and Germany across the Baltic Sea, b) Gazprom's "Yamal-Europe Pipeline" with an annual capacity of 33 bcm and a total length of 2000 km connecting Russia and Germany through Belarus and Poland, c) Gazprom's "Blue Stream Pipeline" with an annual capacity of 16 bcm and a total length of 1213 km connecting Russia and Turkey, servicing Turkey's ambitions to be converted into the main energy hub in South-East Europe and an alternative import gate of Russian gas into Europe, d) the "Urengoy-Uzhgorod Pipeline" with an annual capacity of 100 bcm and a total length of 4.500 km connecting Russian Siberia through Ukraine. All the above are clearly depicted in Map 5.

Nord Stream 2 Project
Since 2015, Russia intends to gradually abandon gas supplies to Europe through Ukraine and the "Urengoy-Uzhgorod Project" that holded the lion's share of gas supply to Europe, in order to be replaced by other forthcoming projects. In early 2017, five European energy companies -Shell, Engie, OMV, Uniper and Wintershallhave signed financing agreements with Gazprom about the "Nord Stream 2 Pripeline" 59 , a 1200 km pipeline that would annually transfer 55 bcm of Russian Gas through Baltic Sea to Germanyparaller to existing Nord Stream Pipeline, as it is depicted in Map 6. The total cost of the Project is estimated at USD10,3 billion, with Gazprom being the main shareholder of the Project (50% stake). The new pipeline is scheduled to be completed by the end of 2019. 59 Nord Stream 2 (2017), "Nord Stream 2 AG and European Energy Companies Sign Financing Agreements", available at https://www.nord-stream2.com/media-info/news-events/nord-stream-2-ag-and-european-energy-companiessign-financing-agreements-47/

Право и управление. XXI век
The Nord Stream 2 Pipeline had initially drawn criticism from a number of Eastern European and Baltic nations, such as Bulgaria, Czech Republic, Estonia, Greece, Latvia, Lithuania, Poland, Romania, Slovakia, Finland, Sweden and Denmark 60 . They had sent a letter of compaint to European Commission, supporting that the project would increase Europe's dependence on Russian gas. On the other hand, they would no longer be entitled to lucrative gas transit fees as the pipeline will bypass them completely. At this point a question raises about the extent of the European Union's will to change in its energy policy direction towards new potential gas reserves, instead of Russian gas supplies 61 . Moreover European Commission had to take steps in order to clarify a new legislation framework about importing gas via pipelines from countries outside the European Union's internal market, replacing the existing Third Energy Package.
The US have entered the equation by tightening existing sanctions against Russian companies and individuals, as US energy policy promotes the correction of the transatlantic energy imbalane with Europe, by selling more liquified natural gas 62 . For the US, Russian gas to Europe via Nord Stream 2 Pipeline is a major competitor 63 . In early 2018, Germany approved the construction of the Nord Stream 2 Pipeline, seeking to tighten its economic relations with Russia. The bilateral trade between the two countries in 2017 stood at EUR58 billion, while exports to Russia represented only 2% of total German exports. The conflict of interests between US and Germany has led to sanction in German companies working on Nord Stream 2 Pipeline in early 2019 64 .
TheEuropean Union energy security cannot not be guaranteed without Nord Stream 2 and Russian presence, due to a number of factors, the most important of which is lackage of European internal sources, as it was mentioned already 65 . Consequently, in 2019, European Union members and leaders agreed on compromise for Nord Stream 2 Pipeline, under the scope of European energy security and strategy. Moreover, the European Parliament and the Council with the participation of European Energy and Climate Change Commission agreed to promote new pipeline rules via a new gas directive that covers both internal EU gas pipelines, as well as gas pipelines from non-EU countries into the European Union 66 .
All things considered, it seems that common sense prevailed and Europe took the necessary steps to ensure a steady gas supply from Russia, amid a global fragile energy environment.

TurkSream Pipeline
In 2014 the promoted "South Stream Pipeline" was cancelled in the wake of the Ukranian matter. Russia accused the European Union and the latter supported that the project was not in compliance with EU legislations. Since 2017 Russia promotes the construction of Gazprom's "TurkStream Pipeline" with an annual capacity of 31.5 bcm and a total length of 910 km. The pipeline will transfer gas from Russia to Turkey's Eastern Thrace across the Black Sea at it is depicted in Map 7. The project aims to the equal supply of Turkey and southeastern Europe (17.5 bcm each), planned to be operative in late 2019 67 .
Russia -which is already Turkey's largest gas provider -seeks diverisfied energy routes that would seal its dominance over European gas markets 68 . Turkey on the other hand, aims to become a regional oil and gas hub for energy from the Caucasus, Central Asia, Middle East and Eastern Mediterranean, in order to ensure domestic energy security, cement its geostrategic importance and earns billion of euros by supplying gas to the rest of Southeastern Europe 69 . Furthermore, Turkey's domestic gas production meets just 2% of its needs, while its annual gas consumption reached a historic record high of 53.5 bcm in 2017.
In the medium term, Russia plans to extend Turkstream to Europe via a second line, either through Balkans (Bulgaria, Serbia, Hungary and the Baumgarten hub in Austria) 70 or through Greece and Italy 71 . So far, Bugaria seems to wins ground since the country hosts 80% of the Balkan compressor stations 72 . Russia though is waiting for a clear signal from Brussels in order to proceed with line 2 of TurkStream Pipeline through the Balkans, adopting a modest approach with European Union.

TANAP & TAP Pipeline Projects
It is commonly accepted that Russia found in Turkey an important pillar in order to promote its energy interests in the European Union. Nevertheless, as it is already mentioned, Turkey's energy policy targets at the emerge of the country as a sole energy hub in Southeast Mediterranean. At the same time, Turkey remains the only energy gateway to Europe for emerging gas producers sush as Ajerbaijan. As a result, a competitive to Russian interests pipeline network could be the "Trans-Anatolian Natural Gas Pipeline (TANAP) that would transit gas from Ajerbaijan's eastern edge of the Caspian Sea (Shah-Deniz field) to Italy's Southeastern shore, connected with Greece's "Trans Adriatic Pipeline (TAP) " 73 , as it is depicted in Map 8. The TANAP Pipeline, is a part of a USD40 billion project called "Southern Gas Corridor" -which is consisted also of South Caucasus Pipelinethat aims at turning Turkey into a an energy hub and diversifying European Union natural gas supplies away from Russia.
The 1850 km pipeline will transfer 16 bcm of Azeri gas on an annual basis, of which 6 bcm will cover Turkish domestic needs and the rest 10 bcm, will be delivered to European countries via TAP Pipeline. At futures stages, TANAP is planned to increase deliveries up to 31 bcm Право и управление. XXI век annualy. TANAP Pipeline had a construction cost of USD8,5 billion and it is operational since June 2018 74 .
As it refers to Trans Adriatic Pipeline -TAP, the project was selected by the Shah Deniz Consortium in order to also carry gas to Balkans via interconnectors such as the IGB -instead of cancelled Nabucco West Pipeline. The pipeline is designed with an initial transport capacity of 10 bcm annualy with an option of transporting 20 bcm annualy in the future, having a combined length of 878 km. It is estimated that the construction cost of the pipeline will reach USD4,5 billion and expected to attract direct foreign investments of EUR2 billion to Greece 75 . TAP Pipeline is projected to be operative by early 2020.
On a political level TANAP and TAP Pipelines receive the support of the European Union, as the European Commission Vice President in charge for Energy Union praised the inauguration of TANAP as a key milestone improving European energy security in the most vulnerable parts such as Southeast Europe and Southern Italy, providing diversification and in energy suppliers and routes at the same time.

Map 8. TANAP and TAP Projects
Source: IEA

The Upgraded Role of Greece as an important hub of gas supply to European Union
Greece is becoming an energy hub as: a) by 2025 gas from Cypriot and Israeli reserves will be transfered to Europe via the EastMed Pipeline, b) by 2020 gas will be transitted from Azerbaijan to Europe via theTAP Pipeline, c) Revythousa LNG terminal had already its capacity expanded, d) by 2020 LNG from US will be imported at the FLNG Terminal of Alexandroupolis, further connected to the national pipeline network, e) by 2021 Bulgaria and Balkans will be supplied with gas via the construction of the 182 km IGB Interconnector that could carry 3-5 bcm annualy, a project supported by the European Union in order to boost security of supply in the region 76 and, f) new sufficient reserves from Western and Southern Greece are expected to come into light 77 .
All the potential infrastructure mentioned above, are totally supported by the US in a way that, they could easily meet an important portion of current and future demand in Southeast and Central Europe (Greece, Bulgaria, Serbia, Hungary or even Ukraine). Besides the obvious reason of diversification of routes and resources, the US LNG is seeking to gain access in these new markets by eliminating the Russian factor and dependence at the same time. In collateral, Greece could strengthen its energy security and 74 Ucok A., "Turkey opens TANAP Pipeline that will bring Azeri gas to Europe", Deutche Welle (2018 June 12), available at https://www.dw.com/en/turkey-opens-tanap-pipeline-that-will-bring-azeri-gas-to-europe/a-44192422 75 Liaggou C., "TAP Pipeline and regional changes", Kathimerini printed edition (2016 April 10), available at http:// www.kathimerini.gr/856113/article/oikonomia/epixeirhseis/o-agwgos-tap-kai-ti-anamenetai-na-shmatodothseisthn-perioxh 76 Geropoulos K., "EU approves state support plans for Greece-Bulgaria gas interconnector", New Europe (2018 November 9), available at https://www.neweurope.eu/article/eu-approves-state-support-plans-for-greece-bulgariagas-interconnector/ and Geropoulos K., "EU energy policy to boost security of supply in the Balkans", (2019 January 11) available at https://www.neweurope.eu/article/eu-energy-policy-to-boost-security-of-supply-in-the-balkans/ 77 In the next months drilling operations are expected to start by consortiums of ELPE with Total, Exxon Mobil and Repsol achieve a sufficient gas supply by detouring the Ukranian option that nowadays cover 60% of its needs. The US have been pressing Europe to cut its reliance on cheap Russian gas and buy much more expensive US LNG instead. Despite many European countries, including industrial heavyweight Germany, have so far resisted, the US approach seems to be effective as LNG imports from the US to the European Union have increased by 181% between July 2018 and February 2019 78 . Russia has repeatedly warned that Europe will soon face a gas shortage and price spikes if it tries to rely on US gas imports to cover rising demand instead of increasing purchases from Russia 79 .
Under any occasion, Greece should be further geopolitically supported and promoted as an important energy hub in the region that could operate as a regional regulator and the last frontier against Turkey's expansive ambitions to become the only energy hub in East Mediterranean.

Conclusion
Natural gas is among the fastest growing forms of primary energy worldwide; a very important element, especially if we take into account the efforts taken to reduce global emissions. The emergence of a Mediterranean Energy Hub may not be the EU's top priority right now, but sustained engagement at this early stage could yield fruitful results in the future. Such a project changes geopolitical stability and strengthens the status quo among the involved countries as the European market represents the best option for East Mediterranean gas at the moment.
Our research has shown that the energy inderependence -in terms of oil and natural gas supply, between Europe and Russia will continue until 2025 at least. By that time, the European Union will continue to process different expoitation strategies, as the appropriate infrastructure of the alternative Mediterranean networks -terminals, pipelines and interconnectors -will be taking shape, in order to provide steady production levels. Besides, it should be clarified that, in terms of so far proven gas discoveries, a Mediterranean Energy Hub is about to have a supplementary role in meeting the European Union energy needs and under no occasion it could replace Russian -or any other supplier's-gas volumes. That is the main reason why the European Union is primarily concerned at securing a steady flow of Russian gas and blinks the eye to the american factor as well.
Russia aims to promote its energy plans through Turkey, seeking alliances in the East Mediterranean region, that might prove to be fragile due to Turkey's unstable political and economic environment. Moreover, Russia has to deal with the consecutive US geopolitical expansion in East Mediterranean, especially after the Syrian issue. On the contrary, as Russia and the European Union have common energy interests in the long term, a rapprochement with the countries that consist that future Mediterranean Energy Hub should not be eliminated.
Finally, the existing obstacles that have to do with territorial or maritime disputes between nations, must be adressed decisively on a diplomatic level, as the current need of mutual concessions is more critical than ever. All things considered, the South-East Mediterranean region is at the doorstep of a new unprecedented era, being given the opportunity to exploit and commerce important volumes of gas deposits. Any reckless action would jeopardise all the attempts that have already been made and will end the chapter of energy in the Mediterranean at least for the decade to come. 78 Geropoulos K., "LNG imports from the US to EU continue to rise, up by 181%", New Europe (2019 March 8), available at https://www.neweurope.eu/article/lng-imports-from-the-us-to-eu-continue-to-rise-up-by-181/ 79 Zhdannikov D., "Gazprom warns Europe of gas shortage without increased Russian imports", Reuters (2018 February 9), available at https://www.reuters.com/article/us-gazprom-europe-interview/gazprom-warns-europeof-gas-shortage-without-increased-russian-imports-idUSKBN1FT1BU