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

1CM

29/03/2022 06:00

* Subsea gas pipeline to Turkey, Europe idea conceived years
ago
    * Europe seeking alternatives to Russian supplies
    * Industry officials cite production, political hurdles
    * Turkey, Israel looking to put diplomatic strains behind

    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 any deal, government and
industry officials in both countries say.
    The idea, first conceived years ago, is to build a subsea
pipeline from Turkey to Israel's largest offshore natural gas
field, Leviathan. Gas would flow to Turkey and on 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 ties," and told reporters he was ready to
send top ministers to Israel to revive the pipeline idea that
has lingered for years.
    A senior Turkish official told Reuters talks have continued
since Israeli President Isaac Herzog visited Ankara earlier this
month and "concrete decisions" could follow in coming months on
a proposed route and participating entities. 
    Industry officials are more circumspect, however, saying
production restraints and geopolitics could leave the plan dead
in the water.
    The Leviathan field already supplies Israel, Jordan and
Egypt. Its owners - Chevron  CVX.N  and Israeli firms NewMed
Energy  DEDRp.TA  and Ratio Oil  RATIp.TA  - plan to crank up
production from 12 to 21 billion cubic meters (BCM) a year.
    By comparison, the European Union imported 155 billion cubic
meters of Russian gas last year, covering close to 40% of its
consumption.
    Much of the extra gas output will be liquified and exported
on ships to Europe or the Far East, according to NewMed. Its
chief executive said last month Turkey could become a
destination too, but needed to put "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 many considerations had yet to be discussed, including
the finances.
    "It needs to be found economically feasible, which is not
something self-evident," she said.
    
    ENERGY BRIDGE
    Israel and Turkey are looking to put a decade of diplomatic
impasses, usually over Israeli-Palestinian issues, behind them.
Energy partnership could be key, especially after 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 transit Turkey en route to Europe," said another
Turkish official. "Israel is looking positively on this, some
talks have been held and there is a will to do it."
    Turkey consumes about 50 billion cubic meters of natural gas
a year and imports nearly all of that, most through pipelines
from Russia, Iran and Azerbaijan. It is well placed as a
transport hub in the region where energy politics can be heated.
    Citing Iraqi and Turkish officials, Reuters has reported
that a plan to bring, with Israel's help, gas from Iraq's
Kurdistan region to Turkey and Europe is part of what triggered 
Iran's missile attack on the Kurdish capital Erbil this month.
 urn:newsml:reuters.com:*:nL5N2VS28E 
    "Turkey is of great interest, for its domestic consumption
as well as a channel to countries in southern Europe," said a
senior official in the Israeli gas sector.
    The problem, the official said, is that there were already
two proposed routes for the extra supplies from Leviathan: via
existing LNG plants in Egypt or a planned floating LNG facility.
    "If Turkey responds quickly then it may 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 the 6 billion euro pipeline EastMed proposed to
connect Israel with Cyprus, Greece and Italy.
    However, any subsea line would need to cross waters of
either Cyprus, which Ankara does not recognize, or Syria, with
which Ankara has no diplomatic relations and has backed rebels
fighting the government in Damascus. 
    This could complicate construction and financing if Turkey
had a direct stake in the pipeline, said Gokhan Yardim, a 
Turkish gas industry consultant who worked on the assessment of
the possible pipeline over two decades. 
    Two previous assessments were based on 8 to 10 billion cubic
meter gas flows, and anything less may not be feasible, Yardim
said.

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EXCLUSIVE-Iran struck Iraq target over gas talks involving
Israel - officials      urn:newsml:reuters.com:*:nL5N2VS28E
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 (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)
 ((ari.rabinovitch@thomsonreuters.com;  +972-2-632-2202; Reuters
Messaging: ari.rabinovitch@thomsonreuters.com@reuters.net))