Unreliable Energy Focus: Europe's Natural Gas Dreams

Italian energy giant Eni announced today that it has discovered a supergiant gas field in the Mediterranean Sea off the coast of Egypt. The gas field may surpass the South Pars / North Dome field in the Persian Gulf, which is currently the largest in the world. The time it will take to develop the field will depend on the field's exact geology as well as the resources available. It will also depend on Egypt's near-term stability.

While natural gas near Egypt will greatly support the rising demand by Egypt's growing population, there is likely also another nearby customer interested in natural gas and willing to pay a premium for it - Europe. Apart from Norway, every other European nation is a net energy importer, and natural gas is a particular contributor to that dependency (though not as much as crude oil). European natural gas needs (and the price Europeans are willing to pay for it) would likely far outstrip those of Egypt, though the thought of exporting natural gas that may be needed domestically could prove unpalatable in Egypt's unstable environment.

(Source: Mappery)

For years, Europe has sought to move away from its extreme natural gas dependency on Russia. That dependence has complicated foreign policy, even as Russia's own dependence on its energy reserves for export has proven to be a potential weakness. The new field in the Mediterranean may present Europe with such an opportunity to diversify and divest without much impact to its own economies.