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Tugce Varol

Tugce Varol

PhD. Tugce Varol; academic, author and strategic analyst. Tugce Varol has been working as a scientific adviser for 21st Century Turkey Institute since 2011.  She…

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Russia Remains Determined To Stop Israel-Turkey Pipeline Deal

Putin Erdogan

It has been six years since the Israeli raid on the Mavi Marmara ship that was aiming to reach the Gaza coast in May 2010.

In the wake of the Mavi Marmara crisis, Turkey and Israel relations rapidly worsened; both countries withdrew their ambassadors and cut diplomatic ties. Turkey's downing of a Russian jet along the Syrian border on November 24, 2015 has forced Ankara to adjust its foreign policy and address its energy security issues. The crisis between Turkey and Russia firmly highlighted the dependence of Turkey on Russian energy resources.

To reduce that dependence, Ankara began to seek alternative energy suppliers and new routes. Turkey turned to Israel, hoping to once again normalize relations between the two states. Erdogan now aims to build an East Mediterranean natural gas pipeline, which could transport natural gas supplies from Israel to Cyprus. In January 2016 he stated that “Israel is in need of a country like us in the region. We have to admit that we also need Israel.” Thus began a new chapter for Turkey-Israel relations. Related: Did The Saudis Exaggerate Their U.S. Treasury Holdings?

Turkey and Israel are negotiating over several issues, including the lifting of the embargo on Gaza and ending the presence of Hamas in Turkey. One of the main disputes noted by President Erdogan involves Turkey’s offer to send a ship, anchored in Israel's Ashdod port, to provide electricity for Gaza. Another significant topic of negotiations is the Russian military presence in the East Mediterranean region. Ankara aims for the first transfer of Israeli gas to take place by 2020, but Russia’s aggressive foreign policy towards Turkey poses a significant challenge to the East Mediterranean pipeline.

Turkey not only wants to lift the embargo on Gaza, but also demands weapons from Israel as part of the normalization effort. The Turkish government needs high-tech weapons to fight PKK rebels in the southern regions of Turkey and to protect its border from ISIS rocket attacks. Russia, however, is fervently against this proposal and has threatened to sell modernized offensive weapons to both Syria and Iran in retaliation. Israel then asked Turkey to rescind its veto over Israeli activity within NATO, and permit Israel to open an office in NATO headquarters. Israeli Prime Minister Netanyahu confirmed on May 4th, 2016 that the decision to allow Israel to open the offices was enabled by Turkey adhering to this request. This represented yet another step towards Turkey’s reconciliation with Israel. Now the time has come for an agreement on energy ties between the two states.

Related: Oil Edges Higher Ahead Of Weekly Inventory Report

The Cyprus problem, which remains far from a resolution, must be solved before any construction can begin on the East Mediterranean natural gas pipeline. According to reports, the forecast of Israeli natural gas production capacity for 2020-2021 is between 20-25 billion cubic meters (bcm) and will reach maximum capacity of 30 bcm in 2030. Considering Israel's export agreements with Jordan and Palestine, plus its domestic consumption volumes in 2020, Israel will only be able to export a maximum of 15 bcm of natural gas per year. This gas forecast is not sufficient for Turkey’s domestic needs. Nevertheless, Turkey and Israel remain determined to sign an agreement.

Israeli Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz said in an interview that Turkey wants to consume half of the quantity of gas in the Leviathan gas reservoir, starting in 2020. In the secondary stage, gas may be transported from Turkey to the rest of Europe. Israel alone does not have the capacity to sell gas to Europe via subsea pipelines. In other words, the Eastern Mediterranean natural gas pipeline can only be built if the pipeline carries gas from both Israel and Cyprus. Related: Oil Price Spike Is Not As Far Away As Many Think

Aside from the economic issues, there is a huge geopolitical challenge facing a potential pipeline between Turkey and Israel: Russian military presence.

 

(Click to enlarge)

In conclusion, Israel has taken advantage of the negotiations with Turkey to open an office in NATO headquarters, to end Turkey's support of Hamas, and to normalize relations with Ankara. In reality, Israel has been using the unlikely potential of a natural gas pipeline in order to obtain concessions from Turkey. Concurrently, energy companies operating in Israeli fields are negotiating with Egyptian and British gas companies to send gas from Israel to Egypt and then sell the gas as LNG. Furthermore, Israel and Russia are about to agree upon a modus operandi in the East Mediterranean area concerning weapons and natural gas deals. It appears that while Israel is aware of the fact that Russia will do everything in its power to prevent an East Mediterranean pipeline, Turkey remains oblivious.

By Tugce Varol for Oilprice.com

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