The Decreasing Probability of an Israel-Turkey Pipeline
A 72-hour truce ended on Friday, causing the violence between Israel and Gaza to resume. Ceasefire efforts brokered by Egypt were able to secure another cessation of hostilities, albeit only temporary.. With no sight of a real solution to the problem, the probability of a pipeline from the Leviathan to Turkey is decreasing by the day. Turkey’s Energy Minister said: “If a pipeline is built from Israel, it will flow not with gas but with the blood of innocent children and mothers,” as reported by Hurriyet.
The diplomatic ties between Israel and Turkey were headed towards normalisation since the March 2013 US-brokered apology by Prime Minister Netanyahu to the Turks over the Mavi Marmara incident. The Israelis had also fulfilled the second condition imposed by the Turks by committing to compensate the families of the nine victims who were killed on board of the Mavi Marmara ship that was headed to Gaza to break the blockage and bring humanitarian aid to the people of Gaza. The amount of the compensation was yet to be determined by Israel. The third condition imposed by the Turks to resume diplomatic ties with Israel was the lifting of the blockade on Gaza.
Energy experts believe that Turkey would benefit economically from an energy deal with Israel and would realise its energy hub ambition by connecting the East Med to Europe. Turkey’s stance on Gaza has however remained unchanged throughout the years, and whether it stems from noble principles or pure populism is debatable.Another obstacle to an Israel-Turkey deal would be the problem of the division of Cyprus, Cypriot officials insist that any energy collaboration between Turkey and Israel needs the approval of the Republic of Cyprus.
Since Israel’s action in Gaza, the Israeli-Turkish relation has regressed. Israel has yet to find a way to transport its large amounts of natural gas to export markets. Egypt has played a role in brokering the talks between Israel and Gaza. Egypt could play the role of a corridor to facilitate the transportation of Israeli gas to export markets namely Europe and Asia.
Egypt has unused export facilities that could be used by Israel. On June 27 the Leviathan partners signed a letter of intent to hold talks with a subsidiary of BG Group PLC about supplying the company’s gas liquefying plant in Egypt. The Tamar partners also signed on May 5 a non-binding agreement of intent to sell gas from the Tamar field to Union Fenosa Gas SA’s liquefied natural gas plant in Egypt.
Historically, Israel received most of its natural gas needs from Egypt until the 2011 Egyptian revolution caused repeated sabotaging of the pipeline transporting gas from Egypt to Israel. Egypt is now suffering from its own energy problems as it undergoes severe shortages of natural gas due to flat production, growing consumption and ongoing export obligations. An energy deal between the two countries seems to be the optimal solution for the Israel’s quick, low cost and simple access to LNG markets.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Email Karen on karen@minoils.com. Follow her on Twitter: @karenayat