Fueling new hope in the region, Eastern Mediterranean nations rush to get their share of a gas bonanza, but political and commercial issues between them leave the fate of the region in a state of uncertainty.
Israeli authorities approved a deal on May 22 aimed at speeding up the development of a mega offshore gas reservoir which could pave the way for supplying Europe with natural gas from the Eastern Mediterranean.
Progress in developing the Leviathan gas field stalled in late 2014 when Israel's Antitrust Authority declared Texas-based firm Noble Energy and Israel's Delek Group, which together own 85 percent of the field and were set to invest a total of $12.5 billion, part of an "illegal cartel."
Discovered in 2010, the Leviathan reservoir is one of the largest offshore gas fields found in recent times, with an estimated capacity of 535 billion cubic metres (bcm).
Its discovery also inspired searches in neighbouring countries, which see its existence as indicating that there may be similar reserves in their own Exclusive Economic Zones, or EEZs.
In August 2015 the Israeli government used an obscure clause to override the Antitrust Authority, and announced that the two firms will be allowed to maintain control of the Leviathan reservoir in exchange for giving up their assets in the nearby Tamar reservoir.
However, in March the deal hit another snag when the Israeli Supreme Court ruled that a clause preventing it from being altered for a decade was unacceptable, dealing a major blow to Prime Minister Benjamin Netanyahu, who called the verdict "mystifying."
The court's decision rattled energy firms which had been lining up to bid for licences to explore and exploit untapped gas reserves locked in the Eastern Mediterranean's Levant basin.
But the new agreement which was announced by Energy Minister Yuval Steinitz last week promises to provide regulatory stability in the gas sector for 10 years while keeping taxation, ownership and exports flexible, thus offering more stability to investors.
The Israeli government hopes the field will be online by 2019, after which a range of possibilities including export to Europe could materialise.
Gas-hungry Europe seems to be the most obvious destination for the natural gas located under the Eastern Mediterranean seabed.
Europe has made no secret of its desire to diversify gas imports away from Russia as relations between Moscow and the West continue to sour due to conflicting policies on Ukraine, Syria and a range of other issues.
The Middle East and the wider region – in which many countries already have large gas reserves – has little need for Israeli gas. Therefore, exporting to Europe through pipelines appears to be the most feasible option.
Israel could even combine its own reserves with those found in the EEZs of neighbouring Cyprus and Egypt, possibly linking the Leviathan field to the nearby Aphrodite and Zohr fields.
This in itself presents a number of problems, as the likeliest route for the pipelines to Europe would be through Turkey.
As instability in Ukraine threatens Europe's supply of gas from Russia – and new potential routes for pipelines from reserves in Turkmenistan, Azerbaijan and Iran open up – Turkey's role as an energy hub has become increasingly relevant.
Linking the Eastern Mediterranean gas fields with Ceyhan, a transportation hub in southern Turkey, could allow pipelines to transport gas across Anatolia to Greece.
However, there are a number of unresolved disputes in the region which could obstruct such developments.
Turkey has not recognised the Republic of Cyprus since a coup in July 1974 orchestrated by the military junta ruling Greece at the time overthrew the Cypriot government and attempted to annex the island to Greece.
Therefore, neither Turkey nor the Turkish Republic of Northern Cyprus (TRNC) – which declared independence from the Republic of Cyprus in November 1983 and is only recognised by Turkey – accept the Greek Cypriot administration's claim to its own EEZ.
Turkey is also yet to resolve its EEZ boundaries with Greece, and does not recognise a delineation agreement between Greece and the Greek Cypriot administration which infringes upon the EEZ that Turkey claims for itself.
While the lure of the benefits that the newfound natural gas reserves may bring has breathed new life talks aimed at resolving the dispute between Turkish Cypriots and Greek Cypriots, plummeting gas prices may dampen the will of the two sides to find solutions.
Political wrangling in the wider region could also prove troublesome. Relations between Turkey and Israel have been strained since Israeli commandos killed nine Turkish nationals in international waters in May 2010 as they attempted to break the Israeli blockade on Gaza as part of an international aid flotilla.
The military coup in Egypt in July 2013 likewise led Cairo and Ankara to downgrade diplomatic relations.
Another option being explored is the possibility of an underwater pipeline that would bypass Turkey and link the Eastern Mediterranean gas reserves directly to Greece through the island of Crete.
Plans to form a team of experts that will assess the viability of such a project were announced following a trilateral meeting between Greek Prime Minister Alexis Tsipras, Israeli Prime Minister Benjamin Netanyahu and Greek Cypriot leader Nicos Anastasiades in January.
But a number of experts have already dismissed the project as unviable, pointing out commercial and political issues, as well as the extreme 2,000 metre depths and high seismic activity the pipeline would have to withstand.
There is also concern in Europe over Greece's warm relations with Russia, especially amid an atmosphere of mistrust between Athens and Brussels stemming from disagreements over financial bailouts.
Greece showed its willingness to do business with Russia last year after agreeing to allow Moscow to build an extension of a gas pipeline the country was planning to build through Turkey.
The pipeline, dubbed the "Turkish Stream," would have transported gas under the Black Sea, bypassing Ukraine, and then on into Europe through Greece.
The project was later suspended following a diplomatic crisis after a Turkish F-16 downed a Russian fighter jet on Turkey's border with Syria border in November 2015.
In the unlikely event that a pipeline is built linking Greece with the Eastern Mediterranean, Europe will be determined to keep it from falling under Russian influence.
Egypt – which was traditionally an exporter of natural gas – has been experiencing an energy crisis since 2011 due to increasing consumption and declining production, and has thus turned into a net importer.
The decline of Egypt as an exporter of gas coincides with the new discoveries off Israel and Cyprus. There has been talk of reversing the flow in pipelines running across the Sinai peninsula that previously supplied Israel with gas from Egypt.
But public opinion in Egypt and security concerns in the Sinai leave such a deal vulnerable to criticism and attack.
In a bid to revive the country's gas production, Egyptian President Abdel Fattah el Sisi secured $36.2 billion in investment deals after a three-day conference last year.
During the conference, Italian energy giant Eni signed an agreement worth $5 billion over 4-5 years for concessions in the Mediterranean, the Western Desert, the Nile Delta and the Sinai. The deals also include a record investment by British Petroleum and its Russian partner DEA of $12 billion in Egyptian fields that will produce 3 billion barrels of oil.
Last year, Eni also discovered the mega 30 trillion cubic feet-capacity Zohr gas reservoir in Egypt's EEZ, meaning Egypt is likely to meet its own gas demand once the field comes online.
It's possible that Eastern Mediterranean gas could be exported as liquefied natural gas (LNG). At present, there are two liquefaction plants in Egypt which could be used to convert the gas to LNG.
Early 2015, the Greek Cypriot administration and Egypt signed a Memorandum of Understanding to outline the technical details of an undersea pipeline that would supply a BG Group-operated network in the Egyptian ports of Idku and Damietta with gas imports by early 2018 from the Cypriot Aphrodite gas field.
A new LNG plant has also been considered in Cyprus, but these plans have been put on hold as the amount of gas found so far does not economically justify its construction.
Likewise, a Floating LNG plant, despite dodging some of the political obstacles that affect onshore plants, would cost billions of dollars to maintain and would be seen as a luxury expense during a time when energy firms are cutting costs.
The next question would be where to export the LNG. There is a market for LNG in Spain and France, but Eastern Mediterranean gas would struggle to compete against long-term LNG supplier Algeria.
As for the Far-East, where Qatari exports have the advantage, transportation costs would make LNG exports unprofitable.
One of the few success stories for Eastern Mediterranean gas so far has been Jordan. With its close proximity to the Mediterranean making pipelines feasible, Jordan seems to be an ideal destination for the reserves.
Jordan recently agreed to begin importing natural gas from Israeli reserves in the Eastern Mediterranean over the course of 10 years.
A pipeline running under the Dead Sea is set to become operational as early as 2017. The gas will be pumped from the Tamar field, which is close to the Leviathan field but unlike the latter does not face as many problems preventing it from coming online.
Gas from the Leviathan field is also expected to start being delivered in 2019 for 15 years.
If the political deadlock over Gaza is resolved and the blockade of the Palestinian enclave is lifted, it is possible that the Marine gas field, which was discovered in 1999, could also finally start exporting to Jordan.
Jordan relies on imports for 97 percent of its gas demand. The vast majority of Jordan's gas imports – as much as 80 percent – used to come from Egypt via the Arab Gas Pipeline, but due to Egypt's gas crisis and a number of attacks on the pipeline in the Sinai this supply was repeatedly disrupted between 2011 and 2014.
By importing from the Eastern Mediterranean, Jordan is likely to save $1.5 billion annually. But with a population of under 7 million, Jordan's gas demand is minimal and does no justice to the quantities of gas found in the region.
Author: Ertan Karpazli