The EU’s <a href="https://www.thenationalnews.com/business/economy/2024/10/05/gulf-states-in-race-to-make-low-carbon-metals-as-eu-carbon-tax-looms/" target="_blank">green push</a> and continuing conflicts across the <a href="https://www.thenationalnews.com/news/uae/2024/11/07/who-gaza-winter-time-bomb/" target="_blank">Middle East </a>are further complicating efforts to build a $7 billion gas pipeline connecting the Eastern Mediterranean with Europe, as the project struggles to attract investors, industry insiders say. The <a href="https://www.thenationalnews.com/business/energy/israel-cyprus-greece-sign-5-8bn-gas-pipeline-deal-1.959399" target="_blank">EastMed pipeline</a>, which was agreed on in 2020 by Greece, Israel and Cyprus, was floated as an alternative to help reduce Europe's dependence on Russian gas, particularly after the international fallout sparked by Moscow's invasion of Ukraine in 2022. The pipeline will provide a direct route for natural gas from the Eastern Mediterranean region, including Israel and Cyprus, to Europe. However, the project has faced major challenges in the form of financial hurdles, geopolitical tension as well as Europe's shift to liquefied natural gas shipments from the US and Qatar. “Who in Europe is willing to sign up to a 20-year gas supply contract now, which gets them to 2044, when you know they're meant to be net zero shortly afterwards. [It] just makes it very hard to finance,” said Robin Mills, chief executive of Qamar Energy. Despite the setbacks, the development of the pipeline has not come to a standstill, Cyprus’s Minister of Energy, Commerce and Industry George Papanastasiou told <i>The National </i>at Adipec. “The project is not really stuck, it is still a project of common interest supported by the European Commission,” he said. “The EU is heading more towards developing renewables and the technologies around renewables. A pipeline, which is a big investment, despite being a project of common interest, may not be attracting investors simply because of the heavy investment that is required.” The bloc’s REPowerEU plan, introduced two years ago, aims to increase the share of renewable energy in the EU's gross final consumption to 45 per cent by 2030, up from a previous target of 40 per cent. It also includes boosting renewable hydrogen production to 10 million tonnes per year by the end of the decade. The viability of the pipeline project hinges on the amount of gas available on one hand and the level of interest from potential buyers on the other, Mr Papanastasiou said. Israel is expected to be one of the main suppliers of gas to the EastMed pipeline, along with Cyprus. However, the war in Gaza and the escalating tensions in Lebanon have raised concerns that further gas exploration by Israel may be delayed. Israel currently produces gas from the Leviathan, Tamar, and Karish gas fields off its coast. These fields collectively produce about 29 billion cubic metres of gas annually, with nearly 12 billion cubic metres exported to Egypt and Jordan last year, according to official data. Stakeholders in the Leviathan gasfield revealed plans this year to invest up to $500 million to expand its capacity. Israel also approved an additional 118 billion cubic metres of natural gas for export, beyond the previous limit of 105 billion cubic metres. However, work on a third pipeline project from Leviathan was suspended in October, causing at least a six-month delay in completion due to escalating security concerns, NewMed Energy, one of the partners on the project, said last month. “Developing offshore gas resources in the Eastern Mediterranean is now a strategic risk for the same Israeli government that aims to tap reserves to secure domestic supplies,” said Francesco Sassi, research fellow at Ricerche Industriali Energetiche in Bologna, Italy. “Investing in ambitious projects such as the EastMed pipeline in this scenario is certainly not the best business case<i>."</i> Cyprus, which has granted exploration licences for offshore gas fields since 2007, could produce the first gas from its fields in early 2027, Mr Papanastasiou said, adding that Egypt would be a “realistic” destination for the gas. In Egypt, the gas could either be used domestically or turned into LNG to be exported to other markets, he added. “It is a matter of a commercial agreement between the two countries and the operator." However, there have been ongoing disagreements between the Cypriot government and Chevron, the operator of the Aphrodite gas field off the southern coast of Cyprus, regarding the field's development plan. In August, the country issued a "notice of breach" to Chevron, demanding the company begin the front-end engineering design process for the project within three months. In September, Chevron submitted an updated development and production plan for the gas field, which includes drilling initial four subsea wells and transporting the extracted gas to Egypt’s transmission system via a subsea pipeline. “By mid-January 2025, we believe that the operator Chevron will be in a position to give us something which we will be able to support, at least this is what we expect,” Mr Papanastasiou said. Turkey, which has maritime boundary disputes with Greece and Cyprus, has actively engaged in diplomatic efforts to thwart the EastMed pipeline project. Turkey is part of the Southern Gas Corridor, which moves gas from Azerbaijan to Europe. The pipeline system has become increasingly important for Europe's energy security, especially after the Ukraine war led to reductions in energy supplies from Russia. The most efficient route for EastMed gas is through Turkey, which would translate to a shorter pipeline, Mr Mills said. “But to do that, you've got to cut some kind of deal with the [Turkish government],” he added. Meanwhile, Donald Trump’s return to US presidency may not immediately help revive the project. The EastMed pipeline had received support from the first Trump administration, but the Biden administration, in an apparent shift, raised concerns about the project, citing doubts over its economic feasibility and environmental impact. “Whether Trump would back it again and then throw weight behind it, I'm not sure, because the US is selling LNG very happily to Europe. Would it even want the competition?” Mr Mills said.