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'Turkish-Cypriot conflict ultimate obstacle to Eastern Mediterranean energy development'
By SHARON UDASIN
02/27/2014
EU expert: Natural gas potentials of Cyprus, Israel could strengthen ties with neighboring countries by forging partnerships.
 
The question of Cypriot sovereignty presents an obstacle that inhibits energy advancements in the entire Eastern Mediterranean region, a Greek-German expert on European Union integration and enlargement issues said Wednesday.

Dr. Angelos Giannakopoulos, an adjunct professor of sociology at Germany’s University of Dortmund, was addressing a Tel Aviv University forum on energy cooperation in the Eastern Mediterranean and its potential impact upon EU integration and enlargement. He said that, although the natural gas potentials of both Cyprus and Israel could strengthen relations with neighboring countries by forging partnerships, the ongoing 40-year conflict between Turkey and Cyprus inhibits these collaborations from moving forward.

“Existing and future alliances, as well as cooperation potentials deriving from energy strategies of all countries concerned, will surely have an impact on still unsolved political conflicts,” Giannakopoulos said.

Giannakopoulos has for years conducted extensive research regarding European identity, relations between the EU and Turkey, modernization in southeast Europe, corruption and anti-corruption in the EU, and most recently, energy cooperation in the Eastern Mediterranean.

In addition to his position at Dortmund, Giannakopoulos is currently lecturing in Tel Aviv University’s European Studies Program.

Currently the natural gas reservoirs particularly of interest to potential export recipients are Israel’s approximately 535-billion cubic meter Leviathan basin and the Cypriot 198-b.cu.m.

Aphrodite reservoir, adjacent to Leviathan. The largest stakeholders in both of these reservoirs are Houston- based Noble Energy and the Israeli Delek Group.

Although the Israeli government approved a policy capping exports at 40% on June 23, 2013, the question remains to whom the Leviathan partners will export the gas that has not been reserved for the domestic market.

The CEO of Australian firm Woodside, which is likely to join the Leviathan partnership at the end of March, last week expressed a preference to construct a floating liquefied natural gas (F-LNG) facility off Israel’s shore for exports to Asia.

Nonetheless, a medley of other export options is still under exploration – such as a pipeline to Turkey with or without distribution to the European market, usage of a future Cypriot onshore LNG facility, usage of largely abandoned Egyptian LNG facilities, and various combinations of all of the above.

Despite the less-thanenormous quantities of gas discovered thus far in the Eastern Mediterranean compared to those in other parts of the world, Giannakopoulos argued that the region is “well placed to become the future natural gas supply of the EU, constituting an important alternative to Russian or Iranian gas, which will provide energy security to the EU.”

Although the gas discovered thus far in the Eastern Mediterranean belongs to Israel and Cyprus, both Greece and Turkey stand the chance to become important distribution hubs should the providers want to reach the European gas market, he argued.

“Israel, but also Greece and Cyprus as EU member states, can critically support the two pillars of EU energy policy – differentiation of energy sources and differentiation of energy routes,” Giannakopoulos said.

The Trans Adriatic Pipeline (TAP ), which will connect Greece via Albania to Italy and Western Europe, will transform the country into an important site for energy transfers to the EU, he explained. While politically, Greek hubs via Cyprus might be a feasible outlet for Israeli gas, a much more affordable export route would a pipeline to the shores of Turkey, Giannakopoulos stressed.

“Turkey may use its strategic position as an important transit country as well as its decisions regarding pipelines to achieve its wider aims in foreign policy,” he said, noting that a Turkish supplies could provide an attractive alternative to the EU over Russian and Iranian resources.

Yet at the moment, it is impossible to realize such a pipeline plan due to a number of political obstacles, such as the tense relationship between Israel and Turkey, he explained.

The first and foremost obstacle, however, is the dispute between Turkey and Cyprus over Cypriot sovereignty, according to Giannakopoulos.

Turkey does not recognize the existence of the Republic of Cyprus, and occupies the northern portion of the island. In return, the Republic of Cyprus has closed down all airports and seaports in the northern portion of the island.

In the current situation, Turkey would not accept Israeli gas that crosses through Cypriot waters, while the Cypriots would likewise prohibit Israel from funneling gas through their waters to Turkey, Giannakopoulos explained. However, there is no other path through which a pipeline carrying gas could convey the resource from Israel to Turkey.

In order for any energy cooperation in this sense to advance, Turkey would need to at the very minimum officially recognize the Republic of Cyprus, and the republic would need to open up the ports of the northern portion of the island, he explained. Ultimately, Giannakopoulos said, he envisions the eventual creation of two federal Greek and Turkish Cypriot states under one larger government, but that this longterm goal would not be a prerequisite for Eastern Mediterranean energy advancements.

Yet Giannakopoulos said he sees the recent relaunch of negotiations between Turkey and Cyprus, as well as simultaneous American pressure to solve the issue, as a positive sign.

“Settlement on Cyprus will greatly facilitate cooperation on energy matters among Israel, Cyprus, Turkey, and Greece,” Giannakopoulos said. “A settlement will significantly reduce security threats to gas exploitation exports, while at the same time reducing costs.”
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