Israel giving Gas to new foreign policy talks


The long-awaited approval of the natural gas deal by the Israeli government has the potential of turning Israel into a major energy exporter and therefore into a different kind of geopolitical player. This change is already being felt vis-à-vis a former regional ally-turned-challenger: Turkey.

In September 2014, the owners of the Leviathan gas field (Noble Energy and the Delek Group) signed an agreement with Jordan’s national electric company (NEPCO) for the export of 45 BCM (billion cubic meters) of natural gas over 15 years. In June 2015, Noble Energy and Delek signed a letter of intent with British Gas to provide 105 BCM of natural gas to the British Gas LNG (liquefied natural gas) plant in Idku, Egypt, for 15 years.

Turkey, too, is interested in Israel’s natural gas. The CEO of the Turkish energy company Turcas, Batu Aksoy, recently declared: “We can still create a win-win opportunity here. There are large quantities of gas there [in Israel], and they [the Israelis] want to supply gas to Egypt and Turkey.” Turcas added that “if they [the Israelis] supply Turkey with 8-10 BCM a year and sign a 20-year gas agreement, this will meet Turkey’s needs.” In other words, Israel can meet Turkey’s natural gas needs, and Turkey sounds interested in becoming a major customer

Turkey depends on natural gas for the production of 50% of its electricity, and its natural gas consumption is expected to double over the next 20 years. Yet Turkey has no natural gas resources and depends on expensive suppliers such as Russia, Iran, and Azerbaijan. Turcas is said to be negotiating the purchase of 7 BCM of natural gas over the next 20 years from Israel’s Leviathan field. Turkey’s gas bill would be significantly reduced if the gas were delivered via a pipeline from Leviathan (buying LNG from Russia is far more expansive).

IMG_1080Yet under Recep Erdogan’s leadership, Turkey would find it hard to sign a multi-billion natural gas contract with Israel without delivering on its promise to ease the naval blockade of the Gaza Strip. Yasin Aktay, an adviser to Turkish Prime Minister Ahmet Davutoglu, revealed recently that Turkey is discussing with the government of Greek Cyprus the establishment of a seaport that would deliver goods to the Gaza Strip under international supervision (possibly by NATO forces). Turkey is also said to be brokering a long-term ceasefire between Hamas and Israel.

If Turkey can claim the partial lifting of the Gaza blockade, it will be able to sign a natural gas agreement with Israel without being accused of ignoring the fate of the Palestinian enclave. For Israel, a partial lifting of the Gaza blockade under NATO supervision, together with a long-term ceasefire agreement with Hamas, might be worth it – depending, of course, on the terms of such an arrangement.

Turkey’s recent diplomatic efforts to obtain a partial lifting of the Gaza blockade must therefore be understood in the wider context of Israel’s emergence as a major natural gas exporter and of Turkey’s energy needs. Turkey needs Israel’s gas, but it also needs to save face vis-à-vis Hamas. Israel’s huge natural gas reserves constitute a new and unprecedented asset for Israel’s foreign policy. Relations between Israel and Turkey might never be fully mended, but the mutual interests created by Israel’s natural gas resources are likely to stabilize bilateral relations to the benefit of the two countries and of the region.