Israel-Cyprus-Turkey pipeline would provide new strategic triangle, says former US Ambassador Bryza - DAILY SABAH

ALI ÜNAL, ANKARA

02.10.2016

The former Deputy Secretary of State and U.S. ambassador to Azerbaijan, Matthew Bryza, said the solution of Cyprus's problem would provide the most economically attractive export route for Cypriot natural gas as well as for the Israel-Cyprus-Turkey pipeline, which also can elevate Turkey's strategic importance and secure its economic benefits by becoming an energy transit hub

The former Deputy Secretary of State and U.S. Ambassador to Azerbaijan Matthew Bryza said it is incorrect to say that the price drop in natural gas makes it economically infeasible to transport Leviathan gas to Turkey and added his hope that gas export from the Leviathan field would start in 2019. A former senior diplomat Bryza currently serve as a board member of Turcas Petroleum which is the leading Turkish energy investment holding that created Turkey- Israel natural gas pipeline project. Answering to Daily Sabah's questions on pipeline politics Bryza said that thus far, energy reserves have had a minimal impact on regional states' relations. Underlining that if the Cyprus problem solved Turkey would provide the most economically attractive export route for Cypriot natural gas Bryza added that in this case an Israel-Cyprus-Turkey pipeline, would also provide a powerful mechanism for building a new strategic triangle among Turkey, Cyprus, and Israel.

Cyprus Blocks Israel-Turkey Gas Pipeline Untill Ankara Mends Ties - HAARETZ

Jul 05, 2016 6:40 PM
Michele Kambas

After a rapprochement is reached with Ankara, Israel hopes to export gas to Turkey across Cypriot waters. But Cyprus, that doesn't have diplomatic ties with Turkey, gives a red light.

REUTERS - Turkey needs to mend relations with Cyprus before the Cypriot government will allow a Turkish-Israel gas pipeline to cross its territory, a government spokesman said on Tuesday.

The remarks came a week after Israel and Turkey reached a rapprochement, ending a six-year diplomatic rupture and raising hopes that Israel can reach an agreement to export natural gas from its offshore Mediterranean fields to Turkey. But to reach Turkey a pipeline would have to traverse the territorial waters of Cyprus, which was split into [the internationally recognized Republic of Cyprus] and a Turkish enclave by a Turkish invasion in 1974.

Turkey-Israel-Cyprus – Could this be the Next Gas Triangle? | Natural Gas Europe

December 25th, 2015

Turkey natural gas consumption was 48 bcm in 2014 and it is expected to reach 75 bcm by 2025. Russia currently supplies Turkey 55% of its gas needs. With this relationship going sour and the Turkish Stream project on-hold, Turkey is in search for alternative gas supplies, especially in order to ensure its future needs are met.

At the same time Israel, having approved the gas regulatory framework deal but with potential gas exports to Egypt under question, is in need to identify other gas export markets to enable development of Leviathan.

Turkey needs gas and Israel needs to sell it, but Cyprus is in the middle, making a perfect triangle. A pipeline from Israel’s Leviathan gas field would need to pass through Cyprus’ EEZ to reach Turkey. But this would require solution of the Cyprus-problem. President Anastasiades has already declared that Cyprus would not agree to such a pipeline without it. 

Lets look at this East Med triangle in more detail.

Turkey: Suspension of talks on the Turkish Stream gas pipeline has been one of the most serious consequences of the expanding Russian-Turkish geopolitical and now economic conflict. Even though Russia has not cut gas supplies to Turkey, its growing gas demand makes Turkey’s future needs vulnerable. In addition, among others the western route Russian gas supply contract will be up for renewal in 2021 and Black Sea route contract in 2025. In total over 36 bcm per year contracts will be up for renewal between 2021 and 2025. And on top of that Turkey would need to find another 26 bcm by 2025 to cover its growing gas needs. Turkey will be looking to secure substantial quantities of gas over the next ten years and with its main gas supplier out of bounds it will be a challenge.

Hence the the recent scrambing to secure gas from Azerbaijan, Kurdistan, then Qatar and now Israel. But it may not be enough. 

Israel: Gas exports to Turkey had always been the preferred option for Leviathan. In March 2014 at least 10 bids were received in a tender by Noble and its partners to supply 7 to 10 bcm gas to Turkey by subsea pipeline, but by August Turkey ruled out buying gas from Israel following Israel’s incursion into Gaza.

Soon after that the anti-trust case raised its head. In the meanwhile Israel concentrated its efforts into exporting its gas to Egypt and Jordan. But even though the anti-trust case has just been resolved, gas exports to Egypt have come into a grinding hold. Earlier this month the International Arbitration Court awarded $1.76billion to Israel’s Electric Corporation against Egypt’s EGAS as compensation for halting gas supplies in 2012. Egypt promptly launched an appeal and stopped all gas import negotiations with Israel. 

But soon after there was another twist to the story!

With the rapprochement between Turkey and Israel they will be proceeding to normalize of diplomatic ties. At the centre of this lie negotiations to export Leviathan gas to Turkey. Given the problems with Egypt, Israel is keen to proceed with this deal so that it can develop Leviathan within the planned time-frame 2019-2020.

Cyprus: Negotiations between Greek Cypriots and Turkish Cypriots for the solution of the 40+ year-old Cyprus problem have been progressing well. It is hoped that 2016 will be a watershed. Turkey’s role to achieve this is critical.

Lets hope that securing gas from Israel is an incentive to Turkey to help resolve the Cyprus problem. Should this happen gas from the Aphrodite gas field could potentially join Leviathan gas to Turkey. Between the two as much as 25 bcm per year could be exported to Turkey, sufficient to make an impact to its needs. The key to this is solution of the Cyprus problem.

Dr Charles Ellinas

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