By Elena Kosolapova – Trend: An agreement between Turkey and Israel on normalization of relations signed on June 28 creates preconditions for Israeli gas supplies to Turkey, Dr. Michael Tanchum, an expert on energy and geopolitics told Trend by email.
“The restoration of Turkey-Israel relations is one of the two preconditions for building a natural gas pipeline from Israel’s Leviathan field to Turkey,” Tanchum said who is also an author of forthcoming work to be published by the Atlantic Council on Turkey’s changing role in the Eurasian energy architecture.
The other precondition is a resolution of the Cyprus issue to allow the pipeline to cross Cyprus’ economic exclusion zone, according to the expert.
“Meeting this first precondition creates great incentive for meeting the second,” Tanchum said.
The expert noted that all the regional stakeholders are now aligned in finding a solution to the Cyprus issue. Additionally, the leaders of the Republic of Cyprus and the Turkish Cypriots have each suggested that revenues from natural gas sales could be used to help provide financial compensation for lost property as part of the terms for the settlement of the Cyprus issue, the expert said.
Speaking about possible routes for Israeli gas supplies to Turkey, Tanchum noted that Israel and Cyprus do not currently possess enough natural gas to warrant the construction of an LNG facility.
Current estimates say Israeli gas reserves amount to 950 bcm.
“However, if more exploration is conducted and new discoveries of sufficiently large deposits are made, then we may see the creation of a liquefaction facility either on Cyprus or offshore,” the expert said.
But the first route for supplying Israeli natural gas to Turkey likely will be via an undersea pipeline delivering 8-10 bcm annually, which would cost $2-$2.5 billion and extend 450-500 km, depending on the exact route, Tanchum believes.
Overall, the restoration of full diplomatic relations between Turkey and Israel creates greater stability in the Eastern Mediterranean that will promote more regional cooperation, the expert said.
He noted that Turkey-Israel economic relations have continued to grow despite the rupture in diplomatic relations in 2010 – in 2014, the volume of Turkey-Israel bilateral trade stood $5.62 billion, more than doubling their 2009 trade volume of $2.6 billion.
“Investor confidence will be boosted by the restoration of full diplomatic relations and both countries will experience the economic benefit of greater trade and investment,” Tanchum said.
In addition, the expert noted that Turkey’s concurrent outreach to Russia is also significant for Turkey’s economic and energy interests, particularly as Ankara tries to maintain a balance in negotiating with the European Union.
On June 27 Turkish President Recep Tayyip Erdogan sent a letter to his Russian counterpart in which he expressed deep regret for the incident with downed Russian air bomber in November 2015, which led to crisis in relations between two countries and expressed profound condolences to the family of the Russian pilot who was killed in the accident. In his letter Erdogan also noted that Russia is Turkey’s friend and strategic partner, and the Turkish authorities do not want to ruin relations between the two countries. Dmitry Peskov, a spokesman for Russian President Vladimir Putin assessed this letter as an important step towards the normalization of relations with Turkey.
In this light Tanchum reminded that in 2013, Turkey-Russia bilateral trade stood at $32 billion, with Russia constituting Turkey’s 2nd largest trading partner, second only to Germany, and Turkey and Russia had already agreed to visa free travel while a visa-free travel agreement between Turkey and the EU remains a contentious issue.