Turkey-Israel: the new Great Game

by Daniel Dombey | Financial Times

There is a new Great Game afoot and it is taking place beneath the sea floor of the eastern Mediterranean.

Turkey and Israel’s tentative reconciliation is a process so fraught that US Secretary of State John Kerry appeared in Istanbul at the weekend to chivvy the two sides towards restoring full diplomatic ties. But if the steps he set out can be taken — agreeing compensation for nine Turks killed by Israeli forces in 2010, avoiding inflammatory talk, exchange of ambassadors — then a whole series of changes could be unleashed from Damascus to Brussels.

 In particular, there is the question of a pipeline that could ferry newly discovered Israeli natural gas to energy-hungry Turkey — a move that would knit the two US allies closer together, despite enduring suspicions.

“It is possible that cooperation in energy between Turkey and Israel could follow an anticipated rapprochement,” said Taner Yilidz, Turkey’s energy minister, on Monday.

Turkish officials caution that bilateral talks on such cooperation can only really get going after ambassadors are exchanged — but add that business contacts on the topic are already burgeoning.

Ozgur Altug at BGC partners in Istanbul contends that rapprochement means that “relatively weak Israel-Turkey economic relations will pick up again”. He observes that although Turkish exports to Israel have risen over the last decade (falling back slightly in 2012) to their current level of $2.5bn, they have declined as a proportion of Ankara’s total exports (of which they now account for about 1.5 per cent rather than more than 2 per cent previously).

The ‘Great Game’ in the Levant

by Semih Idiz | Al-Monitor

With billions of cubic meters in estimated gas reserves, the Eastern Mediterranean, or the “Levant Basin” by another name, is turning into the stage for a contemporary version of the 19th Century “Great Game,” which has as much potential for catalyzing peace, as it does for contributing to new tensions in a region already rife with conflict.

The key event this respect came on March 30, the historic date when natural gas from the Tamar field, off the coast of Israel, started flowing to the Israeli mainland, thus kicking off a process that will not only make the Jewish state largely energy independent, but also turn it into a key supplier for European markets.

The Tamar field, discovered as recently as 2009, is said to hold 250 billion cubic meters [427 billion square feet] of gas, and is the smaller of Israel’s two offshore fields, the bigger one being the Leviathan field with its estimated 425 billion cubic meters of gas, but which has yet to be developed.

Texas-based Noble Energy and the Israeli Delek Energy, the two largest shareholders in the Israel gas fields are said to be looking for a go-ahead now from the Israel government to export the larger portion of the gas, since demand in Israel is insufficient to cover the cost of developing the Leviathan field.

Turkish Minister: Anatolia only feasible gas route for Israel, Greek Cyprus

Hürriyet Daily News

Turkey awaits normalization with Israel to discuss energy projects, as Israel’s energy plans would only be reasonable if Turkey was involved, Turkish Energy Minister has said

Turkey is not indifferent toward Israel’s energy projects for transferring the Eastern Mediterranean natural gas and oil to the international markets, since the resources would be not be feasible unless they were transferred through Turkey, Turkish Energy Minister Taner Yıldız said.

“It is the same for Greek Cyprus,” Yıldız told reporters yesterday. “It will have no benefit to your people if you say ‘I will do it even if it is expensive.’ I’m telling this both for Israel and Greek Cyprus,” he said, adding that the projects would be meaningful only if the right move is made.

But, discussing energy deals before the restoration of ties between Turkey and Israel has been finalized would be impossible, according to the minister.

“As relations normalize in the future, then we can discuss if natural gas could be transferred by a pipeline through Turkey,” the minister said.

Turkey dismayed at lack of US partnership on second nuclear plant: Minister

Hurriyet Daily News

Turkey expected to form a partnership with the United States to build Turkey’s second planned nuclear plant, Energy Minister Tamer Yıldız told daily Hürriyet in an interview published April 6.

“If I don’t build the nuclear plant with the U.S., which strategic project will I do? Will I sell tomatoes and peppers?” Yıldız said, adding that Turkey had made a proposition to the “highest officials” in Washington about participating in the tender.

“They told us that the project was not feasible. It may not be feasible, but it is strategic. [Making] this strategic contribution falls upon Washington,” he said.

China and a Japanese-French joint venture are competing to build the plant, which will be located in the Black Sea province of Sinop, Yıldız said April 4. The first plant in Akkuyu, in the Mediterranean province of Mersin, will be constructed by Russia’s Rosatom company.

Turkey: Does Ankara Hold the Key to Ending Cyprus Financial Woes?

by Justin Vela | Eurasianet.org

Some 60 trillion cubic feet of gas reserves around the divided island of Cyprus, a find possibly worth hundreds of billions of dollars, could find its way to Turkish and European markets through Turkey. Combining a deal of exporting natural gas from Cyprus with delivering water and electricity to the island may benefit Ankara to mediate a settlement for the divided island. (Photo: Council of Europe)

Turkey’s potential as a regional energy hub could help alleviate the financial turmoil hitting the divided Mediterranean island of Cyprus, analysts say. But before any steps are taken, Ankara would like to see movement toward a resolution of the decades-long conflict between Greek and Turkish Cypriots. And that is a long shot over the short term.

The International Monetary Fund’s 1-billion-euro (over $1.28 billion) contribution to a 10-billion-euro (over $12.8 billion) rescue package, announced on April 3, may ease concerns that the meltdown of Cyprus’ financial system could trigger a major crisis for the euro zone, but Greek Cypriots still have an incentive to seek alternative ways of stimulating their economy, observers note.

Turkey, capitalizing on its growing role as a regional energy hub, has offered options. But its 38-year-long territorial conflict with Cyprus over the self-declared Turkish Republic of Northern Cyprus could prove an insurmountable barrier to a solution. The major area of possible cooperation is over hydrocarbon deposits in the waters off Cyprus. These resources -- estimated to include some 60 trillion cubic feet of gas reserves, a find possibly worth hundreds of billions of dollars -- are deeply contentious. Greek Cypriots have granted exploration licenses to international energy companies without consultation with northern Cyprus.