News
Cyprus & World News

Israel's energy cooperations change Cyprus gas plans

15 April, 2014

Israel`s drive to export its new-found natural gas could help to rebuild strained ties with old regional allies Egypt and Turkey, but could deprive Europe of a precious alternative to Russian gas, through Cyprus, according to Reuters.

The news agency notes that Israel has in recent months already signed energy deals with Jordan and the Palestinian Authority and if all goes well, the latest developments could see first pipelines being laid between Israel and Turkey as soon as 2015, and gas cooperation between Israel and Egypt is also emerging, which would allow export access to Asia`s major markets.
Those developments, it is added, have “put Israel`s previous plans to pump its gas reserves into a future export plant in Cyprus on the back burner, dealing a major blow to the indebted Mediterranean island`s ambitions to become a global player in the gas market”.

A Cypriot LNG export plant was due to deliver at least 5 million tonnes a year to Europe and Asia, allowing Europe to reduce its growing dependency on Russia, which has become of particular concern since the crisis in Ukraine cast a Cold War chill over East-West relations, Reuters notes.
"If Israel has really ditched Cyprus as a partner to develop the region`s gas resources, then we (Cyprus) really do have to find quite a lot more gas if we want to become a viable exporter, and that would inevitably throw our plans back by several years," said one source involved in developing Cyprus' gas reserves.

Cypriot officials had counted on additional supplies from Israel to make the export project feasible, encouraged by the fact that Noble and Delek, two of Leviathan`s main developers, also own Aphrodite.
“Deepening Israeli reluctance to share its gas with a rival Cypriot project has stalled those talks”, Reuters says.

Meanwhile, talks between the Leviathan consortium and Turkish counterparts are focusing on building a 10 billion cubic metre (bcm) sub-sea pipeline at an expected cost of $2.2 billion, giving Israel access to a major emerging market and one of Europe`s biggest power markets by 2023.

"We think construction phase for a pipeline to transport Israeli gas to Turkey could begin in the second half of 2015," a Turkish energy official said.
A separate yet-to-be-built pipeline linking Europe with the Caspian through Turkey in 2019 could eventually also open up a new market for Israeli gas in western Europe.

An envisaged 25-year supply deal would steady Turkey-Israel ties and boost economic links, while Turkish sanctions against Israel would be lifted and ambassadors reinstated, he said.