Turkey not option for Israeli gas until 2030: industry expert | Platts

Turkey not option for Israeli gas until 2030: industry expert
Jerusalem (Platts)--13Mar2014/1104 am EDT/1504 GMT

Turkey is not likely to be an option for Israeli gas exports until 2030 as the Turkish market could be over-supplied by the time Israel's huge offshore Leviathan gas field starts producing in 2017, a senior energy industry consultant said late Wednesday.

Speaking at the Eastern Mediterranean Gas Conference in Tel Aviv, London-based Petroleum Development Consultants Managing Director David Aron said commercial and economic reasons would make the Turkish option unlikely and not geopolitical factors.

Turkey is being touted as one of the potential customers for gas from Leviathan. Noble Energy Inc. and Delek Group, partners in the Leviathan consortium, have been holding talks in recent months with Turkish companies on long-term supplies.

The cost of building a 485 kilometer long pipeline to Turkey is estimated at around $2 billion.

"Turkey is expected to have sufficient gas supplies from Russia, Iran, Iraq and other potential suppliers to meet its needs," Aron said. The PDC managing director added that using Turkey as a transit point for gas sales to Europe would also be problematic as the capacity of the existing and planned pipeline infrastructure would be used by other suppliers.

Aron said Israeli gas exports could play a major role in Jordan, with the first agreement signed recently for gas sales to Arab Potash Corp and Jordan Bromine a signal that Jordan could be willing to buy more gas from Israel. He said other supply alternatives for Jordan are likely to be far more costly.

"Israel could be supplying 2 billion cubic meters of gas to Jordan and 2020 and 4 Bcm by 2025," he forecast.

The other options for Israel are use of a proposed LNG terminal in Cyprus and a floating LNG terminal.

"All options are on the table for the exports of Israeli gas and we are still in the process of evaluating them," Yaniv Friedman, Vice President for Strategy at Delek subsidiary Avner Oil, said recently.

-Neal Sandler, newsdesk@platts.com
-Edited by Jonathan Loades-Carter, jonathan.carter@platts.com

Link to source: http://www.platts.com/latest-news/natural-gas/jerusalem/turkey-not-option-for-israeli-gas-until-2030-26751183