Baku, Azerbaijan, Nov.2
By Leman Zeynalova – Trend:
The recent talks between Israel, Greece, Italy and Cyrus on Israeli gas export to Europe
are largely political talks, Charles Ellinas, oil market expert, executive president at Cyprus National Hydrocarbons Company (CNHC) told Trend Nov.2.
Such a pipeline can become commercially viable if gas prices in Europe double, to over $8 per mmBTU, which is not likely to happen in the foreseeable future, said the expert.
Touching upon the possibility of building a pipeline from Israel to Turkey, Ellinas pointed out that this pipeline is priority and is also commercially viable.
The only obstacle is that it is has to go through Cyprus, which could be easier with solution of the Cyprus problem, he added.
However, the expert said that there is also some resistance to the construction of such a pipeline both in Israel and in Turkey.
“By the time Israeli gas reaches Turkey, joins the Southern Gas Corridor and reaches Europe, it will be too expensive, over $7 per mmBTU, to find buyers,” he said.
Israel's best hope is the Turkish market, said Ellinas, adding that it will not be able to compete with European gas prices.
Further, he added that Russia’s Gazprom company is determined to defend its markets both in Turkey and in Europe against any competition.
“It can keep prices to $4 per mmBTU or even less. Any new entrants to these markets will have to beat this,” said the expert.
Also Gazprom has over 100 bcm/y spare production capacity and it can use this flexibly to supply anybody's demand and support its prices, he added.
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