ROVING EYE Arab Pipelineistan's high
stakes By Pepe Escobar
To follow Pepe's articles on the Great
Arab Revolt, please click here.
Once again this week the Arab Gas Pipeline
had to be shut down - with no gas flowing to
Israel and Jordan. An "unknown armed gang" bombed
the al-Sabil gas terminal near the coastal city of
el-Arish, less than 350 kilometers northeast of
Cairo in the Sinai Peninsula.
On March 27,
an "unknown armed gang" tried to blow up the
terminal but failed. On February 5, they did
succeed - the flow of gas to Israel and Jordan was
The Sinai Peninsula is a de
facto red zone. Local Bedouins rule. Security is
spotty. Weapons smuggled to Gaza and other parts of
he Middle East flow through
the Sinai - that is, within striking distance of
the Arab Gas Pipeline.
The Arab Gas
Pipeline is the star of Arab Pipelineistan -
linking Egyptian gas to the north to Israel and to
the south towards the Gulf of Aqaba and from there
across Jordan to Syria and via Damascus towards
The Arab Gas Pipeline has the
potential to grow east and west - turbulent
politics and economic allowing. From Damascus it
could go to southern Turkey, and then connect to
the perennially troubled, still in the making,
Nabucco project exporting gas to Europe. The other
possibility is an extension towards Italy and
Spain including Libyan and Algerian gas.
In strategic el-Arish, the Arab Gas
Pipeline breaks in two; one of the arms goes
northeast, to the Israeli city of Ashkelon. The
el-Arish-Ashkelon pipeline has been supplying
Israel since 2008. For the moment, Israel gets 1.7
billion cubic meters a year; before Tahrir Square
there were plans to increase it to 2.1 billion. As
it stands, Egypt supplies about 10% of Israel's
energy mix, and is responsible for over 30% of
Israel's electricity. Over half of the total
natural gas consumed in Israel comes from Egypt.
Few may know that Egypt - with 63 billion
cubic meters a year - is one of the largest
producers of natural gas in the Maghreb. In
Africa, it's only behind Algeria (80 billion).
While Egypt is increasing production, Algeria is
decreasing. Cairo and Algiers are fierce
competitors in the natural gas market. At the same
time, Egypt is also investing heavily in liquefied
natural gas (LNG) - to be transported by sea - so
it may offset its dangerous dependency on Middle
exports are regionally strategic - but especially
to Israel. Sabotage may hurt the Israeli economy
and its military/energy security. Bit it also
hurts Egypt's regional and international
credibility as a gas hub; the Hosni Mubarak regime
was very keen to cultivate this image.
Because president Anwar Sadat and then
Mubarak killed any attempts to diversify the
Egyptian economy, the country has to rely on
tourism; remittances from Egyptian workers abroad;
tolls in the Suez Canal; payment for dodgy
privatizations; and their oil and especially gas
exports. A hefty chunk of all these proceeds ended
up in Mubarak's Swiss banks accounts.
wonder Israel defended Mubarak until the last
minute. Mubarak's sons Gamal and Alaa pocketed
hundreds of millions of dollars in "commissions"
from the sale of Egyptian gas to Israel. As much
as Tel Aviv paid these "commissions" to get gas at
a ridiculously low rate, average Egyptians could
not even dream of enjoying at least some financial
benefit for working in the gas fields. No wonder
in mid-April new Egyptian Prime Minister Essam
Sharaf ordered a serious review of the pricing
deals with Israel.
The new gas rush Now there's another huge game at play in Arab
Pipelineistan. Texas-based Nobel Energy has found
massive natural gas deposits - trillions of cubic
meters - in the eastern Mediterranean. The waters
encompass all number of key regional players;
Israel, Lebanon, Cyprus, Gaza, Egypt and Turkey.
No treaties demarcate these territorial waters.
What everyone may eventually enjoy is no less than
over 300 years of assured energy; at least in
theory, that would mean the end of a regional
Turkey is at the moment
involved in a complex push to develop regional
Pipelineistan not only along an east-west axis but
north-south as well; this means it must cultivate
a complex web of relations with no less than nine
countries - Russia, Azerbaijan, Georgia, Armenia,
Iran, Iraq, Syria, Lebanon and Egypt. Before
Tahrir Square, serious negotiations were already
ongoing regarding an extended Arab Pipelineistan
that could link Cairo, Amman, Damascus, Beirut and
Baghdad. This would certainly do more to unify and
develop the Middle East than any "peace process".
The same applies to the newfound eastern
Mediterranean gas. An ideal world would point to
multi-nation corporation in charge of exploiting
these new gas finds, maybe located in Cyprus,
which is neutral and a member of the European
Union (EU) to boot. That would simplify the sale
of much of this gas to energy-hungry Europe, thus
alleviating its dependency on Russian gas.
Russia's energy giant Gazprom anyway won't
fail to be part of the action. It has already
offered Lebanon its prospection services. China is
already on the spot, ready to buy from anyone. For
the moment, the heart of the action in this New
Gas Rush is Cyprus airport. The Delek corporation
- which controls the second-largest quota, after
Noble Energy, of the extraction rights in Israel -
wants to install a LNG refinery in Cyprus, on a
site strategically located between two American
So reality will be messy -
especially with Israeli/US interests trying to get
the upper hand while Arab governments think they
could use this new gas bonanza as a way to pierce
the economic/military hegemony of Israel.
At least one front of the great 2011 Arab
revolt might seem to be spelling a rosy future, as
in "natural gas"; commodity, capital and
infrastructure leading to development for all. Or
maybe not; and this will turn out to be yet
another lethal chapter of ongoing energy wars.