Turkey-Israel gas partnership more viable than ever: Experts

The recent rapprochement between Turkey and Israel has made a gas partnership between the two countries more viable than ever, experts say, although past relations need to be fixed and political regional challenges need to be overcome.

Tapping into the Eastern Mediterranean gas resources has become a more urgent priority recently with Europe’s accelerated efforts to find alternative energy sources to Russian gas since the outbreak of war in Ukraine in February.

Amid the European efforts to cut 155 billion cubic meters (bcm) of annual Russian gas imports, the first high-level meeting between Turkey and Israel took place on March 9 in Ankara.

During Israeli President Isaac Herzog’s meeting with Turkish President Recep Tayyip Erdoğan, in which both presidents expressed the aim to revive bilateral relations based on common interests, they also utilized the opportunity to discuss enhancing energy cooperation.

“Energy cooperation is a major topic in the current dialogue between Israel and Turkey. The main potential for cooperation is the idea of ​​constructing an underwater gas pipeline between Israel’s Leviathan field and Turkey,” Elai Rettig, assistant professor at the Department of Political Studies at Bar-Ilan University told Anadolu Agency (AA) on Friday.

Rettig said that another topic includes cooperating on joint gas production and encouraging more private companies to look for new oil and gas fields in the East Mediterranean. However, he stressed that the two sides do not fully agree on the priorities of the dialogue.

“The Turkish side want to make energy cooperation the focal point of the dialogue, with other longstanding political issues to be discussed later. But the Israeli side wants to emphasize first the creation of a more positive political atmosphere between Israel and Turkey, before agreeing on any long-term binding energy trade deals,” he explained.

Stressing that both sides see energy trade as something very positive and important, he, however, urged that it be part of a more comprehensive “reset” of their past relations.

The first working-level energy dialogue between the two countries took place in Istanbul in 2016. The sides discussed a proposed natural gas pipeline project to transport natural gas supplies to Europe from the Leviathan gas field in the Mediterranean Sea off the coast of Israel.

However, in 2018, Turkey recalled its ambassador in Tel Aviv over the deadly attacks against Palestinians in the blockaded Gaza Strip, who were protesting the US administration’s decision to move its embassy from Tel Aviv to Jerusalem.

Drawing attention to the advanced negotiations between the Israeli gas companies and Turkey’s state-owned energy importer BOTAŞ, Rettig said that the negotiations got stuck over the question of price as the latter demanded a lower price for the gas than the Israeli companies could offer, leading to the freezing of talks for seven years.

However, I have pointed to several developments in recent months that have made this project more viable than before, causing both sides to look at it with fresh eyes.

These include the announcement by Amos Hochstein, the US special envoy for energy, that Washington no longer supports the EastMed pipeline between Israel and Greece, a growing need by Turkey to replace unreliable gas imports from Iran amid the rise in natural gas prices.

“All of this makes an Israeli-Turkish gas deal more financially viable than ever before. But regional political issues still need to be resolved as part of a deal, including perhaps some level of participation by Cyprus in the deal,” he suggested.

Pipeline to Turkey

The amount of exportable gas from Israel will depend on the mode of transfer, according to Rettig.

“If we’re talking about LNG (liquefied natural gas) through Egypt, it’s just 1-2 billion cubic meters per year in the short-term, and maybe 4-5 bcm in the long-term,” he said.

If a new LNG plant is to be built by Israel, then it could be 10 bcm per year, while a pipeline to Turkey could be 10-16 bcm per year, depending on the width of the pipeline, he said, adding that it will be a cheaper gas than LNG.

Rettig expressed his doubt that any Israeli gas would go directly to Europe through Turkey as the current dialogue revolves around “swap” deals, where Turkey will purchase Israeli gas to supplement its supply problems in the southeast, and that will free up more Azerbaijani gas and other sources of gas to flow towards Europe instead of being consumed in Turkey.

“The net result will be more gas for Europe, but it doesn’t necessarily have to be ‘Israeli gas molecules’ that go through the TANAP pipeline. For Europe it doesn’t make a difference. The more gas Israel sells to Turkey, the more gas is freed for Turkey to sell to Europe,” he asserted.

Circumventing Turkey ‘not feasible’

Samuel Doveri Vesterbye, the managing director at the European Neighborhood Council (ENC), who specializes in Turkey, Central Asia and the Middle East, also said that the expectation between Turkey and Israel in terms of energy dialogue is the prioritization of the Eastern Mediterranean energy development over the pursuit of Iranian energy.

“This is Israel’s main priority, both because Israel has a well-structured and functioning (pumping) energy reserve in its exclusive economic zone (EEZ), namely in Leviathan and Tamar,” Vesterbye explained.

He added that Turkey wants to build a pipeline to Ceyhan, which would allow Ankara to become an energy transit and trading hub, whereas Israel is at a major advantage point, since the most developed and existing production sites, as well as highest reserves, are within Israel.

Vesterbye noted that building a Mediterranean pipeline that circumvents Turkey is not feasible at the moment, because the US has clearly indicated that it is neither supportive of such an initiative due to timing, price and environmental factors.

“Instead, a potential pipeline to Turkey is an option, however, it runs into an age-old problem, which is that it needs to pass through the seabed of Cyprus. This means that such a pipeline needs the support of Cyprus, which means that the Turkish-Greek and Turkish-Cypriot solution would need to be found first, or – at a minimum – some type of concession or resource sharing agreement would need to be found ,” I suggested.

Stressing that Israel uses its natural gas for domestic consumption and – a small portion – is destined for its immediate regional neighbors, Vesterbye argued the Eastern Mediterranean gas can achieve its economic and volume potential if exported beyond the immediate region and if the totality of reserves is pooled together and exported at once.

“If each county’s discoveries, whether Israel, Cyprus or Egypt, are left to be exported individually, the viability in terms of costs and production volume decreases dramatically. That is why the point of fostering good economic and political relations between Egypt, Israel, Cyprus and Turkey are vital for the success of Eastmed gas,” Vesterbye warned.

I have underlined that only two realistic options exist. “One option is piping Egyptian, Cypriot, and Israeli gas to Turkey and export to Europe via TANAP (or LNG). A second option is piping the same discoveries to existing LNG terminals in Egypt and exporting it across the world from there.”

A prerequisite for all these options remains that Turkey develops good relations with its neighbors, I have concluded.

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