Turkey could be anchor customer for Israeli gas

Energy Ministry director general Shaul Tzemach says the option of gas exports to Turkey is practical, despite the political tensions.

Israeli-Turkish relations are warming up over natural gas exports. Ministry of Energy and Water director general Shaul Tzemach today hinted that Turkey could be an anchor customer for Israeli gas, and that there is room to consider including foreign powers and multinationals in a project to export Israeli gas to Turkey. He told a cleantech conference, "Among the companies in east Mediterranean basin, there is at least one anchor customer big enough to receive gas from Israel."

Tzemach added that the option of gas exports to Turkey was practical, despite the political tensions between Turkey and Israel. "This isn't out of the question," he said. "There are quite a few geopolitical barriers, but if we know how to create the right conditions, it is possible. Gas should be used as a stabilizing factor which leads to cooperation between countries and includes multinationals and international parties with an interest in regional stability." He said that international cooperation on natural gas would also demonstrate the Israeli economy's ability to flourish and thrive.

Although Tzemach did not mention Turkey by name, his remarks are the first by a senior Israeli official in response to recent signals by Turkey. A Turkish diplomat said that Turkey believes that an undersea gas pipeline to Turkey might be the most economical way for Israel to export gas.

Reports about a possible warming in Israeli-Turkish relations is of great interest to Cyprus, where Turkey controls 40% of its territory. Cyprus wants to cooperate with Israel on gas exports via the liquefied natural gas (LNG) facility that it is building on its southern coast. Cyprus's own offshore gas discoveries do not justify the facility, which will cost $10 billion.

In a separate development, sources inform ''Globes'' that Turkish conglomerate Zorlu Endustriyal ve Enerji Tesisleri Insaat Tie AT, a partner in independent power producer Dorad Energy Ltd., is behind the recruitment of an Israeli team to promote an Israel-Turkey gas pipeline, at a cost of $6 billion. The team is currently working at Dorad, in which Zorlu owns a 25% stake. Zorlu also owns 40% of Adeltech Ltd., which is building two smaller power stations.

Dorad said in response, "The company is building a power station, and is not involved in gas exports."

Published by Globes [online], Israel business news - www.globes-online.com - on January 29, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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