Minister of National Infrastructures, Energy and Water Resources Yuval Steinitz will meet his Turkish opposite number, Minister of Energy and Natural Resources Berat Albayrak, this Thursday, on the last day of an international energy conference that starts in Istanbul today. Steinitz's bureau said that this would be the first Israeli-Turkish meeting at ministerial level since the rapprochement agreement between the two countries, and that the two ministers "will discuss the export of gas from Israel to Turkey, and cooperation on energy matters between the two countries." The energy conference is being run by the World Energy Council, on which 90 countries are represented.
Steinitz's bureau refused to state whether the minister had been officially invited to meet Albayrak, and would only say that the meeting was a result of contacts conducted over a long period of time. The wording of the announcement, as though "the export of gas to Turkey" is almost a fait accompli, is something of an exaggeration, since this is only an initial meeting, and there is doubt over the economic viability of exporting gas from the Leviathan reserve to Turkey.
Turkey currently imports gas at $5-7 per thermal unit, whereas the proposed price of a thermal unit in Israel, published last week, is $5.12. Laying a pipeline from Leviathan to Turkey involves diplomatic complications, since Cyprus opposes it, and is a technological challenge, since it means laying a 500 kilometer pipeline in deep water on a rocky seabed. Laying a pipeline would add at least $2 to the price of a thermal unit in Turkey.
On the positive side, three weeks ago, Turkish president Recep Tayyip Erdo?an discussed Turkey-Israel business ties with Jewish-American businesspeople, while he was attending the UN General Assembly in New York. Erdo?an spoke in favorable terms at the meeting, which was also attended by the Turkish energy minister. A few days later, at his palace in Ankara, Erdo?an briefed journalists on a host of matters, and among other things he mentioned the planned meeting between Steinitz and Albayrak. 'This meeting has been postponed several times," Erdo?an said, "I believe that it will take place, and only after it will we know what steps will be taken going forward."
Another point strengthening the prospect of Turkey wishing to buy gas from Israel is its low level of energy security. Earlier this year, the Institute for 21st Century Energy graded the energy security of the 25 OECD countries, placing Turkey 23rd in the list. Turkey buys 55% of the gas it consumes from Russia, and relations between the two countries have undergone crises. It imports 16% of its gas from Iran, 13% from Azerbaijan, and in addition it imports liquefied gas from Algeria and Nigeria. The OECD recommended Turkey to diversify its energy sources as much as possible, since 35% of power production in the country relies on natural gas, and Turkey itself produces less than 0.5 BCM of natural gas on its own territory.
Published by Globes [online], Israel business news - www.globes-online.com - on October 9, 2016
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