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Home›Iran finance›Israel-Turkey gas pipeline an option for Europe wary of Russia – sources

Israel-Turkey gas pipeline an option for Europe wary of Russia – sources

By Ninfa ALong
March 29, 2022
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* Undersea gas pipeline to Turkey, European idea conceived years ago

* Europe seeks alternatives to Russian supplies

* Industry officials cite production, policy barriers

* Turkey and Israel seek to eliminate diplomatic tensions

By Orhan Coskun and Ari Rabinovitch

ANKARA/JERUSALEM, March 29 (Reuters) – A Turkey-Israel gas pipeline is being discussed behind the scenes as one of Europe’s alternatives to Russian energy supplies, but it will take complicated maneuvering to reach a deal, officials said. government and industry officials from both countries. to say.

The idea, first conceived years ago, is to build an undersea pipeline connecting Turkey to Israel’s largest offshore natural gas field, Leviathan. The gas would be routed to Turkey and to southern European neighbors looking to diversify away from Russia.

Turkish President Tayyip Erdogan said last week that gas cooperation was “one of the most important steps we can take together for bilateral relations”, and told reporters he was ready to send senior ministers in Israel to revive the pipeline idea that has been dragging on for years.

A senior Turkish official told Reuters the talks had been ongoing since Israeli President Isaac Herzog’s visit to Ankara earlier this month and that “concrete decisions” could follow in the coming months on a proposed route and participating entities.

Industry officials are more circumspect, however, saying production restrictions and geopolitics could leave the plan dead in the water.

The Leviathan field already supplies Israel, Jordan and Egypt. Its owners – Chevron and the Israeli companies NewMed Energy and Ratio Oil – plan to increase production from 12 to 21 billion cubic meters (BCM) per year.

By way of comparison, the European Union imported 155 billion cubic meters of Russian gas last year, covering nearly 40% of its consumption.

Much of the additional gas production will be liquefied and exported by ships to Europe or the Far East, according to NewMed. Its chief executive said last month that Turkey could also become a destination, but had to put its “skin in the game” and commit to building the pipeline.

Asked about talks with Turkey, the Leviathan partners declined to comment.

Israeli Energy Minister Karine Elharrar told Ynet News on Sunday that many considerations had yet to be discussed, including finances.

“It has to be found economically feasible, which is not something obvious,” she said.

ENERGY BRIDGE

Israel and Turkey seek to put behind them a decade of diplomatic deadlock, usually over Israeli-Palestinian issues. The energy partnership could be key, especially after the Russian invasion of Ukraine made Europe more determined to find alternatives to its energy supplies.

“There has been a recent rapprochement with Israel and we want its gas to flow through Turkey en route to Europe,” another Turkish official said. “Israel sees this in a positive light, talks have taken place and there is a will to do so.”

Turkey consumes around 50 billion cubic meters of natural gas a year and imports almost all of it, most of it via pipelines from Russia, Iran and Azerbaijan. It is well placed as a transport hub in the region where energy policy can be heated.

Citing Iraqi and Turkish officials, Reuters reported that a plan to bring gas from Iraq’s Kurdistan region to Turkey and Europe with Israeli help is part of what sparked the Iran’s missile attack on the Kurdish capital Erbil this month.

“Turkey is of great interest, for its domestic consumption as well as as a channel to southern European countries,” said a senior Israeli gas official.

The problem, the official said, is that there were already two proposed routes for additional supplies from Leviathan: via existing LNG plants in Egypt or a planned floating LNG facility.

“If Turkey reacts quickly, this could be a third alternative,” the official said.

The pipeline would run 500-550 km and cost up to 1.5 billion to build, according to Israeli officials, making it more manageable than EastMed’s proposed €6 billion pipeline to link Israel with Cyprus, the Greece and Italy.

However, any submarine line would have to cross the waters of Cyprus, which Ankara does not recognize, or Syria, with which Ankara has no diplomatic relations and has backed rebels fighting the government in Damascus.

It could complicate construction and financing if Turkey had a direct stake in the pipeline, said Gokhan Yardim, a Turkish gas industry consultant who has worked on evaluating a possible pipeline for two decades.

Two previous assessments were based on gas flows of 8 to 10 billion cubic meters, and anything less might not be achievable, Yardim said.

(Reporting by Orhan Coskun in Ankara and Ari Rabinovitch in Jerusalem; Additional reporting by Can Sezer in Istanbul; Editing by Jonathan Spicer and Tomasz Janowski)

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