Insider Secrets

Insider Secrets

Learn how the PROs are making money from the oil and energy market.

Loading, please wait

Turkey’s Zorlu Group Fights for Israel Pipeline

By
Posted on Tue, 05 November 2013 23:04 | 0

While talks between Israel and Turkey over a joint pipeline have been quietly proceeding for some time, Turkish conglomerate Zorlu Energy for the first time last week told reporters it was seeking to purchase 3 billion cubic meters per year of natural gas from Israel’s Leviathan field.

According to Zorlu Energy CEO Ibrahim Sinan Ak, the company was seeking a 15-year contract for 3 billion cubic meters of natural gas annually as part of a hoped-for $2.5 billion pipeline project running underwater from the Leviathan field to Turkey.

In 2010, Noble Energy and its Israeli partners Delek and Avner Oil and Gas made Israelis first hydrocarbons discoveries in the Leviathan and Tamar fields offshore in the Levant Basin. The two fields are estimated to have as much as 30 trillion cubic feet of natural gas.

Israel has a choice to make now in terms of experts: Either a pipeline to Turkey or a total focus on a pending project with Australia’s Woodside Petroleum Ltd. for an LNG terminal geared to exports to Asian markets.

Related article: Kurds Complete Game-Changing Pipeline to Turkey

According to JP Morgan, a pipeline from Leviathan to Turkey would yield a faster and higher return on equity (less than four years) than would the construction of an LNG plant.

But for now, politics and immovable Turkish government negotiating are getting in the way of this pipeline, which would indeed be a game-changer for both Turkey and Israel, giving them immediate access to energy markets in Europe that are keen to get out from under Russia’s grip.

Zorlu is the key player in this because not only is it one of Turkey’s largest companies, it also already has a foothold in Israel, with 25% ownership in Israel’s Dorad Energy Ltd, currently building the country’s largest independent power station.

But while Zorlu is pushing ahead, Ankara is holding out for more from Israel. Still unresolved, from Turkey’s perspective, is the incident in May 2010 when Israeli forces killed nine Turkish activists when they stormed the Mavi Marmara vessel which was trying to break the Israeli naval blockade of Gaza. Ankara has insisted on an apology, compensation and an end to the blockade. It’s gotten the apology, engineered by the Obama administration, and it would likely back down on the request to end the blockade, but will continue to hold out for compensation that may not be forthcoming.

By. Joao Peixe of Oilprice.com


Join the discussion

Special Reports

8 Mega Trends

8 Mega Trends

By Oil & Energy Insider Analysts

8 OIL & GAS INDUSTRY MEGA-TRENDS AND HOW TO PROFIT FROM THEM
Here's what our 400 global energy assets are telling us to be prepared for right now...

LNG Technology

LNG Technology

By Oil & Energy Insider Analysts

THE "FLOATING REFINERY" STOCK THAT COULD FUND YOUR RETIREMENT
This company's incredible tanker technology could eliminate many of the world's offshore pipelines...

Subsea Production

Subsea Production

By Oil & Energy Insider Analysts

THE END OF OFFSHORE DRILLING?
This disruptive market will grow 84% to 270% over the next five years: Discover the 6 equipment suppliers set to profit.

Related Articles

Be the first to comment on this article.


Martin tiller