Turkey-Israel warming could benefit Cyprus natgas


THE recent deal between Turkey and Israel, which could lead to normalised relations between the two nations since they soured in 2010, could have a positive impact on Cyprus’ own natural gas export plans.

Under the agreement reached recently in Switzerland, the countries will discuss the possibility of constructing a pipeline to supply Turkey with gas.

According to energy expert Charles Ellinas, this rebooted Israel-Turkey cooperation can benefit Cyprus as well.

“Turkey needs gas and Israel needs to sell it, but Cyprus is in the middle, making a perfect triangle. A pipeline from Israel’s Leviathan gas field would need to pass through Cyprus’ EEZ to reach Turkey. But this would require solution of the Cyprus problem. President Anastasiades has already declared that Cyprus would not agree to such a pipeline without it,” he said.

As far as Turkey is concerned, noted Ellinas, “the suspension of talks on the Turkish Stream gas pipeline has been one of the most serious consequences of the expanding Russian-Turkish geopolitical and now economic conflict. Even though Russia has not cut gas supplies to Turkey, its growing gas demand makes Turkey’s future needs vulnerable.”

Turkey will be looking to secure substantial quantities of gas over the next ten years and with its main gas supplier out of bounds it will be a challenge.

“Hence, the recent scrambling to secure gas from Azerbaijan, Kurdistan, then Qatar and now Israel. But it may not be enough,” said Ellinas.

For Israel, gas exports to Turkey had always been the preferred option for the Leviathan gas field. In March 2014, at least ten bids were received in a tender by Noble and its partners to supply 7 to 10 bcm gas to Turkey by subsea pipeline, but by August, Turkey ruled out buying gas from Israel following Israel’s incursion into Gaza.

Meantime, Israel concentrated its efforts into exporting its gas to Egypt and Jordan. But even though the anti-trust case in Israel has just been resolved, gas exports to Egypt have come to a grinding hold. Earlier this month, the International Arbitration Court awarded $1.76bn to Israel’s Electric Corporation against Egypt’s EGAS as compensation for halting gas supplies in 2012. Egypt promptly launched an appeal and stopped all gas import negotiations with Israel.

The latest twist came with the rapprochement between Turkey and Israel, potentially leading to a normalisation of diplomatic ties.

“Given the problems with Egypt, Israel is keen to proceed with this deal so that it can develop Leviathan within the planned time-frame of 2019-2020,” said Ellinas.

Completing this triangle, he added, is Cyprus, where negotiations for the solution of the Cyprus problem have been progressing well.

“Let’s hope that securing gas from Israel is an incentive to Turkey to help resolve the Cyprus problem. Should this happen, gas from the Aphrodite gas field could potentially join Leviathan gas to Turkey.

“Between the two as much as 25 bcm per year could be exported to Turkey, sufficient to make an impact to its needs. The key to this is solution of the Cyprus problem.”


Source: Cyprus Mail