Israeli gas supply to Europe not “Mission: Impossible” – expert
Baku, Azerbaijan, July 17
By Leman Zeynalova – Trend:
Israeli gas export to Europe is not “Mission: Impossible”, but it will not be easy, Francis Perrin, energy expert, chairman of Energy Strategies and Policies (France) told Trend.
He was commenting on the recent announcement made by Israeli Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz that Turkey and Israel intend to sign an agreement on construction of a gas pipeline to Europe by late 2017.
“Both countries stressed their willingness to go ahead with this Israel-Turkey-Europe gas pipeline project, which is important of course. When you look at such a project you always have some key issues to study: reserve availability (it is OK as far as Israel is concerned thanks to the Leviathan field), technical feasibility (no problem), economic profitability and political and geopolitical challenges,” said the expert.
Perrin pointed out that profitability is related to costs and to gas prices, which are always a sensitive matter in the discussions between gas exporters and gas importers.
“As regards politics, the main problem here is that this gas pipeline would cross Cyprus' Exclusive Economic Zone. Turkish high officials explain that there would not be any problem but the reality is more complex. These economic and political issues can be solved of course but they must seriously be taken into account,” the expert believes.
Perrin said that the project could be built in two phases: Israel-Turkey and, later, Turkey-Europe.
The connection with the Trans Anatolian Natural Gas Pipeline Project (TANAP) is an interesting option, as TANAP is under construction, the expert believes.
“I am cautiously optimistic as far as the outlook for the Israel-Turkey link is concerned as both countries would benefit from it, Israel in terms of outlets and Turkey in terms of security and diversity of supplies, increased competition between its suppliers and increased energy transit role,” he noted.
The expert believes that it would definitely be a plus for the European Union because security of gas supplies is a key part of the Energy Union, a strategy presented by the European Commission at the beginning of 2015.
“The Eastern Mediterranean is a future gas province and Israel and Cyprus, which is a EU member state, could contribute to the diversification of European gas imports. Israel is keeping several irons in the fire in this regard, in particular with another gas pipeline project, Israel/Cyprus/Greece/Italy,” he added.
Perrin went on to add that it is true that gas demand fell in Europe in the recent period but there are some hopes of increase due to the declining domestic production of this region (North Sea and the Netherlands).
“From an importer and consumer viewpoint it is always good news to have three or four potential new sources of supply rather than one. Of course, at the end of the day, economic criteria must be met, otherwise these projects or some of them will not be built,” he added.
That being said the Southern Gas Corridor is not threatened, said Perrin.
“It includes three main components, the South Caucasus Pipeline, TANAP and the Trans Adriatic Pipeline (TAP). The first one is already there and, for TANAP and TAP, construction is under way and on time for the first supplies of Shah Deniz gas to Europe from 2020,” noted the expert.
Follow the author on Twitter: @Lyaman_Zeyn