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Saturday, March 25, 2023

Russia-wary EU considers Israel-Turkey gas pipeline

EconomyRussia-wary EU considers Israel-Turkey gas pipeline

Ankara/Jerusalem (Times Of Ocean)- A Turkey-Israel gas pipeline is being discussed behind the scenes as an alternative to Russian energy supplies for Europe, but a deal will require complicated negotiations, officials in both countries say.

The idea was conceived years ago to build a subsea pipeline from Turkey to Israel’s largest offshore natural gas field, Leviathan. Gas would flow to Turkey and then to neighbors in southern Europe looking to diversify away from Russia.

According to Tayyip Erdogan, gas cooperation is “one of the most important steps we can take together for bilateral relations,” and he plans to send top officials to Israel to revive the pipeline idea that has lingered for years.

Reuters reports talks have continued since Israeli President Isaac Herzog visited Ankara earlier this month, and “concrete decisions” may be forthcoming on the proposed route and participating entities in the coming months.

Industry officials are more circumspect, saying production restraints and geopolitics could preclude the plan from moving forward.

Israel, Jordan, and Egypt are already supplied by the Leviathan field. Chevron (CVX.N) and Israeli companies NewMed Energy and Ratio Oil (RATIp.TA) plan to increase production from 12 to 21 billion cubic meters (BCM) a year.

Last year, the European Union imported 155 billion cubic meters of Russian gas, covering close to 40% of its total consumption.

NewMed says that much of the extra gas output will be liquified and exported by ships to Europe or the Far East. Last month, its CEO said that Turkey could become a destination too, but it had to put “skin in the game” and commit to developing the pipeline.

Leviathan partners declined to comment on talks with Turkey.

On Sunday, Israeli Energy Minister Karine Elharrar told Ynet news that many things remain to be discussed, including the finances.

“It needs to be found economically feasible, which is not something self-evident,” she said.

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