Israel VS Cyprus

Many times in the past I have written about the cooperation between Cyprus and Israel in the energy and defense sector. Israel and Cyprus have adjacent gas fields, and the American energy company Noble Energy is developing the gas fields of both countries, which makes their exploitation a lot cheaper and leaves a lot more room for profit. Moreover Israel and Cyprus have a defense pact against Turkey.

Map 1 Israeli, Cypriot and Egyptian Gas Fields

Israel and Cyprus are hoping to construct common pipeline networks, which will transfer their gas to one of the 3 players who can absorb large quantities of gas i.e. Egypt, Turkey or the European Union. Israel and Cyprus are small countries, while Egypt and Turkey both have a population of 80 million people, and the European Union has a population of 500 million people.  Moreover the two countries have discussed the possibility of constructing an LNG plant in Cyprus, in order to export their gas in liquid form.        

Map 2

Before moving on with the Cypriot-Israeli interests, I must say once more that there is a huge Turkish-Russian conflict running at the background, with Russia supplying Turkey with 30 billion cubic meters of gas per year, and Turkey desperately trying to find alternative sources of gas, in order to reduce her dependency on Russia. As you can read at the following Al Monitor article, the main gas contracts between Turkey and Russia are expiring in 2020.  See Al Monitor

“How the PKK is Entering Energy Wars”, March 2016

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That timing would be perfect, as some of Turkey’s major gas contracts with Russia expire in 2020, including the Blue Stream deal for 16 billion cubic meters, and half of the western route contracts that cover 4 billion cubic meters. In short, if everything goes as planned, Ankara hopes to get rid of Putin’s noose in several years.
http://www.al-monitor.com/pulse/originals/2016/03/turkey-israel-pkk-shadow-player-energy-wars.html

Gazprom’s site says that the contract for the Blue Stream Pipeline, which carries 16 billion cubic meters of Russian gas to Turkey each year through the Black Sea, expires in 2022. See Gazprom.

Blue Stream

History

On December 15, 1997 Russia and Turkey signed an intergovernmental agreement. Under the agreement Gazprom and Turkish Botas inked the contract stipulating that 365 billion cubic meters of gas should be supplied to Turkey via Blue Stream during 25 years.

http://www.gazprom.com/about/production/projects/pipelines/blue-stream/

What is important is not whether the contracts are expiring in 2020, 2021 or 2022. What is important is the race between Turkey and Russia, with Turkey trying to find new sources of gas, and Russia trying to block her, either by using Armenia and Iran to threat Azerbaijan, or by using the Kurds of Turkey (PKK) to block the Iraq-Turkey and the Iran-Turkey pipelines, or by using the Alawites and Kurds of Syria to block the Qatar-Turkey pipeline, or by using Hezbollah to threat Israel. Note that Turkey could use the Azeri, Iranian, Iraqi, Qatar and Israeli gas, not only to substitute the Russian gas that reaches Turkey through the Black Sea (Blue Stream) and Ukraine (Trans-Balkan), but also to export gas to Europe. And we all know how addicted Russia is on her exports to Europe.

Map 3

Map 4

You might think that Russia is acting like a pimp, and you would be right. But Russia is not an exception. The same is true for Turkey and Qatar, that support ISIS, but also for Iran, which many times in the past has supported Al-Qaeda. Therefore it is ridiculous for the Turks and the Iranians to talk about ethics.

But let me go back to Israel and Cyprus. The construction of common pipelines, and the export of gas, is a common objective for both the Cypriots and the Israelis. But Cyprus and Israel face a huge difference in their foreign policy. Turkey is the main geopolitical threat for Cyprus, while Iran is the greatest threat for Israel. Therefore it is very difficult for the two countries to completely synchronize their foreign policies.

There are discussions between Cyprus and Turkey, in order for the two countries to solve the decade long disputes over North Cyprus, which is under Turkish occupation since 1974. Cyprus has a motive to strike a deal with Turkey before the Turkish-Russian conflict is resolved, because the more Turkey needs Cyprus, and the more desperate Turkey is for alternative sources of gas, the more she will be willing to offer Cyprus, in order for Cyprus to accept an Israel-Cyprus-Turkey pipeline. Because Syria and Lebanon do not recognize Israel, and there is no way they will accept such a pipeline.

However things are quite different for the Israelis. The Israelis do not want to go ahead with an Israeli-Turkish pipeline while there is so much tension between Russia and Turkey. The main threat Israelis face is Hezbollah in South Lebanon, and Hezbollah is supported by Iran. But Hezbollah would also be supported by Russia if the Israelis were to sell gas to the Turks. The Israelis have given Gazprom stakes in their second largest gas field, the Tamar, and they also hope to give Gazprom stakes in their largest gas field, the Leviathan, in order to jointly export gas, whether that is to Egypt, Turkey or the European Union. That way the Russians will be happy with the Israelis, and in return for their help they will not interfere in their fight with Hezbollah and Iran.

Therefore speed is good for the Cypriots when it comes to their discussions with Turkey, but it does not help the Israelis. The recent ruling of the highest Israeli court, which rejected the agreement between Israel and the American Noble Energy for Leviathan gas field, seems to be very convenient for the Israelis, even though Netanyahu was supposedly disappointed with it. Noble Energy would have the Leviathan gas ready by 2019, but the court ruling will delay the project by at least one year. For the Israeli court ruling see World Tribune. I do not have proofs that the Israeli court makes life hard for Noble Energy in order to ensure Russian support for Israel, but that’s what it does.

“Israel Court ruling seen as threat to U.S. energy firm”, March 2016

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The ruling was a major setback for U.S.-based Noble Energy, which could delay the firm’s $6 billion natural gas project off the coast of Israel for as much as a year. The project was expected to start up in 2019.

http://www.worldtribune.com/israel-court-ruling-seen-as-threat-to-u-s-energy-firm/

See also “Israel, Russia and the Leviathan Gas Field”.

https://iakal.wordpress.com/2016/03/28/israel-russia-and-the-leviathan-gas-field/

There is Egypt too of course. The largest gas field of the Eastern Mediterranean Sea was discovered in Egypt in August 2015 i.e. the Zohr fied. Turkey and Egypt are currently at war, but the Zohr field might make the difference, if the two countries agree that Egypt exports gas to Turkey. The Turks have already said that they would be willing to consider normalizing their relations with Egypt, if Egypt accepted to relax her stance towards the Egyptian Islamists. See the friendly to the Turkish government Daily Sabah.

“Normalization of relations between Turkey, Egypt possible if conditions fulfilled”, December 2015

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Erdoğan gave a statement to the media in April while returning from a visit to Tehran and listed four conditions that need to be met before Turkey would be willing to normalize ties with Egypt. The first is the immediate release of Morsi, followed by an annulment of all capital sentences given to supporters of the Muslim Brotherhood, which have been handed out to thousands of political opponents of the coup regime and now face execution in Egypt. Third, Erdoğan said Egypt needed to release all political prisoners, nearly 18,000 people. Lastly, all bans on political parties must be lifted so that a normal democratic process may flourish.

http://www.dailysabah.com/diplomacy/2015/12/19/experts-normalization-of-relations-between-turkey-egypt-possible-if-conditions-fulfilled

For the Egyptians and the Cypriots the main enemy is Turkey, while for the Israelis and the Saudis the main enemy is Iran. Therefore in this energy game with Turkey, the Israelis, the Cypriots and the Egyptians perceive the time factor in a very different way.

I must also say that the Egyptians hope to have the Zohr gas flowing by 2017, as you can read at Reuters.

“Egypt's giant Zohr gas field aims to start output in 2017”, November 2015

http://www.reuters.com/article/mideast-investment-egypt-gas-idUSL3N12X4DX20151102