ANKARA: Experts believe Jerusalem will export 8-10 BCM to Turkey annually by 2020; official negotiations will begin soon. The rapprochement agreement between Israel and Turkey presented Monday – and expected to be signed Tuesday – will also likely lead to the signing of a gas export deal by the end of next year, according to executives in the Leviathan partnership. The partners revealed they have opened talks with a consortium of 15 Turkish energy companies which expressed interest in half of the available reservoir.
The gas could also flow on from Turkey to Europe – which no longer wishes to rely on Russian gas. Both Israeli and Turkish sources believe Europe will import 8-10 BCM annually starting in 2020. Turcas Petrol CEO Batu Aksoy said, “The primary benefit to creating a consortium of companies is the spread of the risks which are inherent in such a significant deal.” The Leviathan partners said Monday they were also holding talks with European companies operating in Turkey.
“The export of Israeli gas to Turkey is a win-win for both parties,” Turkish gas exeutive Nusert Comert told “Globes” on Monday, “This is the best deal financially and the right decision strategically.” Comert says Turkish gas consumption has doubled in the past decade – up to 48.6 BCM – and will likely double again in the next twenty years. Turkey does not have its own natural gas reserves and is forced to import from a number of suppliers (including Iran, Russia, and Azerbaijan) at high prices.
Furthermore, ISIS activity in northern Iraq prevents the import of gas through the region, the gas flow from Russia through Ukraine is inconsistent, and the Tran-Anatolian gas pipeline (TANAP) through Azerbaijan – scheduled to open by 2018 – will now only be ready at the end of that year. Another proposed Russian pipeline – Turkish Stream – has been delayed and experts believe it will likely be scrapped entirely.
From Israel’s perspective, the deal will finally get the ball rolling on Leviathan’s development. In Israel, the realization has dawned that Egypt is no longer an attractive destination for a number of reasons: in the past year oil and gas prices have fallen rapidly, making exports to an Egyptian LNG facility (which will then export the gas to Europe) economically unsound; Egypt itself has discovered new gas reservoirs; and the price of natural gas in the country has risen, attracting international interest. If those reasons weren’t enough, Shell acquired BG – and it’s difficult to imagine the company would want to engage with Israel for such a large transaction.
