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Geopolitical issues may increase interest in Israeli gas

Oil&Gas Materials 23 January 2017 10:45
Israel will be facing an increasing competition on the European gas market, especially if Egypt and/or Cyprus would be joining the supply.
Geopolitical issues may increase interest in Israeli gas

Baku, Azerbaijan, Jan.23

By Leman Zeynalova – Trend:

Israel will be facing an increasing competition on the European gas market, especially if Egypt and/or Cyprus would be joining the supply, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend Jan.23.

The expert believes that the opportunities for Israeli gas export to Europe are based on two issues.

“First, Israeli gas could, if done via LNG projects, be an addition to possible requirements in Europe in case of a lack of supply,” he said, adding that secondly, European markets would be interested in this, based on possible geopolitical considerations, as Israeli gas can also substitute possible Arab North African gas options.

Regarding Europe’s need for Israeli gas, Widdershoven noted that at present, gas markets are even more oversupplied than oil markets.

“Additional gas supplies from Iran to Europe also would be a dent in the options for Israel. A better way to address this would be to link up to the Turkish gas grid, bringing Israeli gas to Turkey, while at same time have access to Southern European options,” he added.

All in all, competition is high, but geopolitics and regional security issues could propone Israeli supplies into several markets, according to Widdershoven.

Earlier, senior officials from Italy, Greece, Cyprus and Israel agreed to advance talks on a pipeline from Israel to Europe after an EU-sponsored study showed the project would be very feasible.

The study showed the pipeline, which would traverse Cyprus and Greece before reaching Italy, would cost about 5 billion euros ($5.5 billion).

A pipeline to Greece would have to go deep underwater and would be the world’s longest undersea connection, said previously Israel’s Energy Minister Yuval Steinitz.

He said that the idea of exporting gas to Turkey, with which Israel has held talks about a pipeline, is still on the table.

“This would not be instead of Turkey,” he said. “I’ve always said we need at least two pipelines.”

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Follow the author on Twitter: @Lyaman_Zeyn

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