The rapprochement between Tel Aviv and Ankara will give fresh impetus
to a pipeline from Israel to Turkey, experts told New Europe in Athens
on October 25.
During a meeting of Israel’s Energy Minister
Yuval Steinitz and his Turkish counterpart
Berat Albaryrak at the World Energy Council in Istanbul on October 13, Tel Aviv and Ankara agreed to examine the feasibility of the pipeline.
“The ratification of the bilateral relations between Israel and
Turkey possibly makes this project politically viable. The question
right now whether it is economically viable. This is a very challenging
project both geopolitically and economically,”
Amit Mor,
CEO & Founder at ECO Energy Financial & Strategic Consulting in
Israel, told New Europe on the sidelines of a conference by IENE in
Athens. He reminded that Russian gas monopoly Gazprom recently agreed to
a major gas price reduction to Turkey and that liquefied natural gas
(LNG) prices have also dropped.
“Gazprom will do its best to secure its market in Turkey and beyond
so to combat any possible additional penetration to the Turkish market
of additional Azeri gas or Iranian gas or possibly Kurdish gas or East
Mediterranean gas,” Mor said.
Asked if there is room for Cyprus gas in the Israel-Turkey pipeline,
the Israeli expert said that eventually if this project becomes
commercially viable, “the Israeli government will make it clear that a
condition or part of the umbrella agreement is that in due time Cypriot
gas might be mobilised via such a pipeline”.
In order to avoid war-torn Syria, a pipeline from Israel to Cyprus
would have to go through Cyprus’s waters, which means that the problem
of the division of Cyprus must be resolved.
Greek and Turkish Cypriot leaders will reportedly meet in Switzerland for negotiations on November 7-11.
Cyprus Natural Hydrocarbons Company CEO
Charles Ellinas
told New Europe in Athens on the sidelines of the IENE conference that a
pipeline between Israel and Turkey has a chance to be built because
Ankara is looking for diversification of supplies despite Gazprom’s
price discount to Turkey.
Ellinas said the Israel-Turkey pipeline has a good chance of being
built for two reasons: Firstly, unless Russia builds two legs of the
Turkish Stream pipeline, Russia would not be able to get more gas to
Turkey. “But the Turkish market is not sufficient to justify another
leg. Some has to go to Europe,” he said. Secondly, gas prices from
Azerbaijan and Iran are still high.
Ellinas said that if the Cyprus problem is resolved, the
Israel-Turkey “pipeline would be a good idea”. He cautioned, however,
that the demand for Turkey is limited. “Sending it from there to Europe
is prohibitive,” he said. “By the time it gets to Europe it will be too
expensive.”
Mor said the first phase of the Israel-Turkey pipeline would be to
satisfy the Turkish market. At the second phase, if there is room at the
European market and if it is economically and geopolitically viable,
they may consider extending the pipeline to Europe, he added.
Mor reminded that stakeholders in Israel’s Leviathan reservoir have
reached an export agreement with Jordan. He also said that Israel eyes
agreements with small markets like the Palestinian Authority for the
export of gas to West Bank and possibly to Gaza.
Regarding Israeli exports to Greece and onto Europe, he said that
it’s “still a pipe dream but we should all continue to follow up. Once
there is much more gas discovered in the region and pricing looks
different, possibly in the longer run … these projects may materialise”.
Meanwhile, Ellinas said the most viable solution for gas exports from
Cyprus is a floating LNG for Europe and other markets. He reminded that
BP has contracted to buy all of the LNG from the ENI-operated Coral
floating LNG project off Mozambique. “If they succeed, it implies that
even with the current global market prices, Coral FLNG is viable for
Asia, not necessarily for Europe. So that opens possibilities,” Ellinas
said.
https://www.neweurope.eu/article/israel-turkish-pipeline-hinges-cyprus-issue-solution/