generalspeaking

Ideological Rankles

"Obviously they need that gas. Turkey's main concern is that Cyprus and Israel establish a relationship that impacts Turkey. Turkey is trying to lure away Cyprus from that deal."
"When it comes to energy, Turkey is pretty pragmatic. That it's trying to establish a relationship with Cyprus is a complete new departure for Turkey ...[it] shows they are ready to throw overboard past differences."
Halil Karaveli, editor, Turkey Analyst


Turkey in fact warned Israel against signing a gas deal with Greek Cyprus. "The Greeks' insistence on unilateral disposal of natural resources in the south of the [Cypriot] island shows that they don't have the will to re-establish a partnership with Turkish Cypriots", according to a recent Turkish foreign ministry statement.

Turkey's swiftly swelling economy and energy shortage makes it anxious to have something to say about where Israel's gas bounty winds up. Once it announced its decision to bring an end to the 30-year conflict with Kurdish separatists in Turkey, Ankara signed a deal with the Kurdistan Regional Government in Iraq to pump oil through Turkey to the international market.

Israel's offshore natural gas reserves are huge, larger than previously considered to be the case. And those reserves express the potential to alter the country's economic fortunes by a wide margin. Energy imports from Middle East sources will no longer be imperative to serve Israel's needs, and it will position itself as a new natural gas source for Europe, one of the largest liquefied natural gas markets.

Recoverable natural gas in the Levant Basin located within Israeli and Cypriot waters of the Eastern Mediterranean amounts to a massive 18.9 trillion cubic feet. The Leviathan Field located 130 kilometres off the Israeli coast under five thousand feet of water, presents as the third-largest in the Middle East, and it promises to change regional dynamics.

Natural gas exploitation will produce huge volumes of gas estimated at some 750 million cubic feet daily when the field opens in 2016. From a country with little-to-no domestic energy resources, the find has transformed Israel's future potential. The Tamar field which opened in 2013 will meet domestic demand for the forthcoming 25 years, leaving the Leviathan gas produce free for export markets.

After signing a memorandum of understanding with Greek Cyprus and Greece on cooperation on the energy file which binds Israel and Cyprus over Leviathan, Israel began talks with others, including Turkey on the construction of a pipeline to pump gas through to Europe. A strategy that will hugely benefit Europe, leaving it less dependent on the surly interactions with Russia that have resulted in past friction.

Tensions between Turkey and Greek Cyprus and Turkey and Israel are yet to be resolved. The growing Islamist ideology in Turkish government finding itself increasingly with less in common with its former collegial relations enjoyed between the two countries under previous governments. And relations strained with Greek Cyprus over disagreements relating to the Turkish northern half of the island.

"It's obvious the considerations are not only economic, there are political ones, too. Much depends on some sort of long-term guarantees that relations with Turkey would be stable", said Eytan Sheshinski of the Hebrew University in Jerusalem. Territorial disputes in the eastern Mediterranean, points out a report in the U.S. Energy Information Administration, "jeopardize joint development of potential resources in the area and could limit cooperation over potential export options."

Israel is attracted to the potential of selling its gas product further than just Europe to take advantage of the higher gas prices realized in the Far East. Selling energy to China and Japan has a strong allure. Israel, according to an executive involved in companies with the Leviathan field exploration project, claims Israel can export to both markets, Europe and Asia.

The fly in that ointment is no facility either in place or projected on the near horizon to liquefy and transport Leviathan's reserves. Unless the prospect of a joint project and the wealth it will produce can convince the two countries to unite through the prospect of bringing gas to waiting markets. 

"There is enough gas to justify a pipeline through Turkey ... we believe this to be a win-win outcome for both sides" said an insider. Unfortunately pure malice seems to motivate Turkey to cut off its nose to spite its economic-energy needs.

Labels: Conflict, Energy, Greece, Israel, k Turkey, Natural Resources

posted by Pieface @ Monday, December 23, 2013