David Wainer and Yaacov Benmeleh
- Aim is to create framework to let companies negotiate
- Negotiations with Italy on second pipeline proceeding
The aim is to create a framework that would let companies on both sides advance their own negotiations, with gas flowing to Turkey in about three years, Steinitz said in an interview with Yousef Gamal El-Din and Shery Ahn on Bloomberg Television. Israel is also in talks for a more ambitious pipeline that would pass through Cyprus and Greece to Italy, whose energy minister plans to visit Israel in early April to discuss the project, he said.
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“The purpose is to conclude by this summer a government-to-government agreement on a gas pipeline stretching from Israel to Turkey, in order to export natural gas from Israel and also the vicinity, to Turkey,” he said. “My vision is that three years from now we will be able to export natural gas to Turkey and six years from now we will be able to complete this cross-Med pipeline” to Italy, he said.
The Israeli push to connect the eastern Mediterranean through pipelines in a region riven by old conflicts is going to be hard to pull off, especially as world energy prices remain depressed. A conduit to Turkey would have to go through Cyprus, which has been divided since a Turkish invasion of the north in 1974.
Israel has discovered two large offshore reservoirs holding an estimated 930 billion cubic meters of natural gas, more than enough to supply its own domestic needs for at least two decades. It is auctioning new fields this summer and is trying to find nearby export destinations to bring in billions of dollars in revenue while strengthening Israel’s geopolitical standing in the region. Jordan has already signed an estimated $10 billion deal to import Israeli gas and Steinitz said talks continue to export gas to two idle liquefaction facilities in Egypt.
The partners in Leviathan, Israel’s largest offshore gas find, started working on a $3.75 billion development plan to service the domestic contracts and the Jordanian market. The companies, led by Houston-based Noble Energy Inc. and Israel’s Delek Group Ltd., are planning to extract surplus gas for export to either Turkey or Egypt in a second phase of development.
The Tel Aviv Oil & Gas Index rose 0.7 percent to 1,098.47 at 10:15 a.m. in Tel Aviv. Israeli gas stocks were among the best performers on the country’s benchmark equity index.
The pipeline to Italy, which Steinitz says would be the world’s longest undersea pipeline, would be more technically complicated and expensive than the conduit to Turkey, and may require additional gas findings offshore Israel to make it commercially viable.
“The general idea is very clear,” Steinitz said. “The East Med Basin, the economic waters of Cyprus, Israel, and Egypt, maybe also Lebanon in the future put together, will be some kind of replacement” to the North Sea.