• sumru elden

Israel and Turkey restoring full diplomatic ties: a possible solution to the EU natural gas problem

Sumru Nur Elden, Bluebird Co-Editor, writes a briefing on Israeli Turkish energy relations and how the EU’s natural gas problem can be mitigated by the abundant resources in Eastern Mediterranean. It was edited by Malou van Draanen Glismann, Bluebird Managing Editor.

 



The recent developments of restoring full diplomatic ties between Israel and Turkey have come after years of estrangement and to the surprise of many. After a series of high official visits and Israeli President Isaac Herzog’s visit to Turkey, the two countries announced that they would re-appoint their ambassadors after their withdrawal in 2018. These events, coming after the striking EU energy crises due to Russian Ukranian War, illuminate a new possibility of satisfying the EU’s energy needs.


The EU has been highly dependent on Russian natural gas, with an import figure of 155 billion cubic meters per year, and the war in Ukraine has posed a severe threat to energy supplies both short and long term. In the short-term, Russia’s significant cuts in the flow of natural gas as retaliation for economic sanctions, from 40% to 20% in Nord Stream 1, have caused an unprecedented soar in prices. The reduced gas supplies coupled with high prices have also halted the EU’s economic growth and reconstruction of its economy after Covid. Experts expect the eurozone to enter a period of recession in the fall, with high inflation ongoing. These cuts have highlighted Europe’s crippling dependency on Russian gas and its inability to shelter itself from Russia’s policies concerning gas exports. In the long term, the volatility in the region and Russia’s aggressive actions have shown Europe that it needs to lessen its dependency on Russian gas. The aftermath of these realizations has shown itself in the EU’s search to diversify its natural gas sources, with Israeli and Eastern Mediterranean gas being significant contenders.


Israel’s natural gas reserves were discovered in the early 2000s, and the uncovering of Leviathan gas fields, estimated to hold as much as 620 billion cubic meters, has enabled Israel to position itself as an energy exporter. Currently, Israel utilizes its reserves to supply its domestic market and export to its immediate regional neighbours. However, with the increasing capabilities of its extraction facilities and the ongoing search for more gas reserves, Israel has been keen to start its exports to the EU. There have been two routes in consideration, the first option being exporting it as liquefied natural gas (LNG) either through preexisting facilities in Egypt or with the help of a planned floating LNG facility. The second one entails the construction of a pipeline that cuts across the Mediterranean to reach Cyprus and then Greece.


Both scenarios have considerable downsides. If Israel chose to utilize Egypt´s preexisting facilities for its gas exports, its exporting capacity would be limited. In the short term, it is estimated that only 1-2 billion cubic meters per year could be exported, while in the long term, these numbers are expected to reach 4-5 billion cubic meters. The construction of a new floating LNG plant would mean that the export capacities would be enhanced to reach around 10 billion cubic meters per year; however, export costs would rise. The second option of exporting natural gas through an undersea pipeline to Cyprus was first conceived in 2014. The project, named EastMed, encapsulated a pipeline that would go to Cyprus and then Greece to be distributed to the rest of Europe, which proved to be a difficult financial and technical task. The project was estimated to cost around 10 billion dollars; unlike the shallow waters of the Baltic Sea, which Nord Stream 1 crosses, the pipeline would have to cross the deep waters of the Mediterranean for 1,900 kilometres, sometimes reaching the depth of 2,000 meters. While bearing a high economic cost, the project also ran the political cost of alienating Turkey, which is an influential player in the region and sees itself as a natural hub for energy transfers. In 2021, the Biden administration withdrew support from the project due to purported economic costs and the long completion time. Amongst its considerations, however, the exclusion of Turkey and the heightened tensions it would lead to were regarded as significant factors.


A third option that is being revived with the normalization of relations between Turkey and Israel is to export Israeli natural gas through a pipeline to Turkey. Then, this pipeline would link with the Trans Anatolian natural gas pipeline (TANAP) to reach Europe. This option was first conceived in 2016 but quickly fell apart as both countries withdrew their ambassadors in 2018 following the political fallout from the confrontations on the Israel-Gaza border. Estimates demonstrate that the pipeline would run 500-550 kilometres with a cost of up to 1.5 billion dollars. The pipeline would start from Israel’s largest offshore natural gas field Levithan and would have the capacity to transport 10 billion cubic meters of gas with the chance to increase up to 16. Compared with the EastMed project, the distance and economic cost of running a pipeline to Turkey are more advantageous and feasible; however, political tensions in the region have to be solved before a serious commitment can be established.


Turkey, largely dependent on Russian gas, is also looking for ways to diversify its energy supplies. Furthermore, due to its geolocation, one of its most significant geostrategic interests is to become a hub for energy transfer. Therefore, Turkey highly values the realization of this project, and Turkish officials highlight this project as one of the most critical steps that can be taken to strengthen bilateral ties. By working closely with and utilizing Turkey’s regional influence, Israel can counterbalance the dominance of Iran in the region. It would also have an economically feasible and technically easier way to export its gas to the EU.


On the other hand, for this project to be realized, a vast array of political tensions have to be eased. The most notable is the issue of Cyprus, as the pipeline would have to cross its Exclusive Economic Zone (EEZ). Currently, there are two de facto states on the island, and Turkey rejects the presence of the Republic of Cyprus. The Republic of Cyprus, on the other hand, refuses to engage with Turkey until the two islands are unified. These factors greatly limit the diplomatic conversations between the two and render an agreement on a pipeline highly difficult. Another layer is added to the complexity in the region when the Republic of Cyprus’s planned 128 billion cubic meter Aphrodite gas field is taken into consideration. Although too small to be exported as its own, the Cypriot gas can be fed into the Israeli pipeline. This would benefit the concerned parties as Cyprus could export its gas to the EU, and there would be an increased amount of gas reaching and satisfying Europe’s growing need. An ambitious next step, the experts say, is to engage with Egypt to combine the exports from its 850 billion cubic meters worth of gas field, Zohr, to the pipeline. This would mean that a significant amount of Eastern Mediterranean gas could be exported to the EU. It is usually agreed upon in the energy sector that the addition of a new country to a project adds at least two more years of negotiations. This grand plan, for the time being, is not feasible as there are a lot of political issues to be sorted out, starting with the Turkish-Cypriot solution. At a minimum, concessions or a resource-sharing agreement must be reached between the two for the pipeline to be realized.


Although a long way ahead, the natural gas problem of the EU and its possible solutions have led to the normalization of relations between Turkey and Israel for a long time. This is a positive new step for the security and stability of the tumultuous region as both countries hold significant regional influences. The transportation of the abundant Eastern Mediterannean gas, however, is a topic of great interest to the many countries involved, and diplomatic conversations need to start immediately to realize the great potential of Eastern Mediterannean gas.











81 views0 comments