Last December, soon after the downing of a Russian jet, and a bad year for Turkey, a flurry of diplomatic activity started with Israel aiming to restore full diplomatic ties with Ankara.
After years of false starts, Israeli and Turkish negotiators went to Geneva two weeks ago for talks aimed at ending this long-running conflict.
A consequence of Turkey’s confrontation with Russia is a threat to its gas supplies, which are heavily dependent on imports from Russia.
Turkey needs friends in its neighbourhood, but it also needs to secure alternative supplies of gas. Israel needs to export its gas, but it also needs friends to contain Iran’s increasing influence in the region. Any gas from Israel to Turkey has to go through Cyprus’ EEZ, putting Cyprus in the middle.
Turkey-Israel relationship
Turkey used to be Israel’s closest ally in the Middle East and it is very important to remember this when considering the more recent developments.
Once a key partner of Israel, Turkey in recent years has turned into a foe. Relations started souring in 2002, when AKP won the elections and aligned Turkish foreign policy with the Arab world and in favour of the Palestinians while cooling ties with Israel.
Diplomatic relations broke down completely after the May 2010 Mavi Marmara incident.
It is interesting to note that at that time Turkey was allied with Syria, building bridges to the rest of the Arab world, friendly with Egypt and Iran and on good relations with all superpowers.
But since then, Syria’s civil war and refugees, renewed and escalating conflict with the Kurds and tensions with Egypt, Iran and Russia, have thrown Turkey into crisis.
Not only has it been embroiled in Syria’s war either directly or indirectly, with accusations of supporting ISIS, but the downing of the Russian jet has led to open confrontation between the two countries. In addition, its actions in Syria have put Turkey at odds with the US and EU.
Turkey’s international situation has never in the past been as chaotic and explosive as it has become recently, raising major concerns for the country, which is now seeking friends in an unstable region.
This is perhaps the reason which led Turkey’s President Recep Erdogan to say recently: “Israel is in need of a country like Turkey in the region. We have to admit that we also need Israel”.
The talks between the two countries in Geneva last week ended with tangible progress. Restoring ties with Israel could give Erdogan a rare regional win and a friend.
Risks to Turkey’s gas supplies
Turkey’s gas consumption was 48.7bcm in 2014, with about 55% supplied by Russia. Turkey’s 14bcm/y western route gas supply contract with Gazprom will be up for renewal in 2021 and the 16bcm/y Black Sea route contract in 2025.
In total, over 36bcm/y contracts will be up for renewal between 2021 and 2025. And on top of these, Turkey would need to find another 20bcm/y by 2025 to cover its growing gas needs, expected to reach at least 65-70bcm/y by then. It is this growing gas demand which makes Turkey vulnerable.
Understandably, within Turkey-energy security has become a major issue, something that was not considered a priority issue a few months ago. Russia has not cut gas supplies, but Turkey needs to ensure its future energy needs are secure through cooperation with potential partners.
Turkey considers Israel to be potentially one such partner, which can deliver to it gas and reduce its dependence on Russia, whom it no longer trusts.
Potential of Israeli gas exports to Turkey
It appears that Israel wouldn’t mind strengthening ties with one of its few Middle Eastern trading partners. It should be noted that Turkish-Israeli bilateral trade remained almost intact throughout the dispute years.
Israel’s main motivation is economics. But there might be another angle to this rapprochement – an axis with Turkey to contain Iran’s growing influence in the region.
Since 2014, Prime Minister Benjamin Netanyahu has been pushing approval of the gas regulatory framework deal, which he says is essential for the national security of Israel, and would allow development of Leviathan.
A deal with Turkey could both restore it as an ally and make it a large buyer of Leviathan gas. That could be a success for Netanyahu, and it could make Leviathan’s development commercially viable. Certainly Noble and Delek have been pursuing such gas sales to Turkey since 2014.
But this is not without risks. What happens if there is another flare-up between Israel and Gaza? How would Turkey react?
Russian views
And then there are reports that Russia may be dissatisfied with such rapprochement, especially with regards to Israeli natural gas exports to Turkey to which Russia is currently the main supplier.
Such opposition may have significant impact on Israel. Damage to its ties with Russia could do harm to its interests in Syria, such as Israel’s air force freedom of action there, Russian support to Hezbollah in Syria and stronger support to Iran.
As a result of the above, there is now a view that Israel should not be in a hurry to sign the agreement with Turkey. Israeli officials have said that several disagreements still need to be resolved. In any case, global gas prices, Noble’s financial problems and the questioning of the gas deal stability clause by Israel’s Supreme Court may delay any gas developments.
Russian President Vladimir Putin has said that Israel should consider bringing-in Gazprom to develop Leviathan. This would be controversial, but a Reuters article states that it could enhance Israel’s security and strengthen its broader geopolitical position.
Russia wants in on Israel’s gas. Over the past four years, Russia has made several attempts to enter Israel’s gas market. In 2012, Gazprom bid for 30% share of Leviathan, but lost out to Woodside and in 2013 it signed a deal to market LNG from Tamar, but the project did not proceed.
Russia would prefer that Israel’s gas does not compete with Gazprom, not only for sales to Europe but more critically to Turkey. Leaving aside Russian views and any other concerns, Israel is still keen on supplying gas to Turkey, as confirmed earlier this month by Energy Minister Steinitz.
A gas deal between Israel and Turkey would require a subsea-pipeline through Cyprus’ EEZ. This would not be possible without a Cyprus settlement. It should, therefore, be an incentive for Turkey to promote such a solution proactively.
Rapprochement with Israel and a Cyprus solution can enable Turkey to be woven into, and benefit from, the developing East Med regional geopolitical and energy network.
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