The Most Coveted Spoils in the Middle East: Gas Pipelines
In celebratory mood, Israel began pumping its first offshore natural gas from the Tamar gas field last week, with the prospect of full capacity within weeks. It took 24 hours to reach the onshore terminal at Ashdod port through a 90-km pipeline.
The Bank of Israel estimates that the Tamar field will boost by one percentage point the country's gross domestic product growth, raising it this year to an estimated 3.8 percent. This is even before the larger, undeveloped Leviathan well goes on stream and makes Israel’s offshore gas finds among the world’s biggest in the past decade.
Former Finance Minister Yuval Steinitz, Minister for Intelligence and Strategic Affairs in the current government, calculates Israeli earnings from gas will total $450 billion over the next 25 years.
In its annual report, the Bank of Israel has recommended considering additional taxation on natural gas lest low prices encourage the development of a gas-based industry that could accelerate the depletion of the gas reservoirs.
The central bank also criticized the Tzemach Committee’s recommendations against exporting a large portion of the gas and urged the Treasury to save export revenues in a reserve fund as a cushion for the economy in the coming 25 years.
The choice between Russia and Turkey as energy allies
Conflicting recommendations over the gas bonanza have presented Prime Minister Binyamin Netanyahu with a dilemma: He must choose between –
1. Accepting the recommendations of the Tzemach Committee to export just a small portion of the natural gas to clients in the immediate vicinity;
2. Exporting 30 percent of the gas reservoirs’ product;
3. And if so, then to whom – to Europe or to Egypt, Jordan and the Palestinians?
4. Turning down once and for all Moscow's insistent bid for the concession to Russian national Gazprom corporation for channeling Israeli gas exports to Europe?
Or, bringing Turkey in as Israel’s partner in the export of gas to Europe from the big Leviathan reservoir when it comes on stream?
Assigning Ankara a share in conveying Israeli natural gas to Europe through a pipeline running from the offshore field across Turkey could be the bedrock for a US-backed energy alliance stronger than the Turkish-Israel military cooperation pact which governed relations for decades until it was suspended by Prime Minister Tayyip Erdogan three years ago.
In effect, DEBKA-Net-Weekly reports, the die has been cast.
Unbeknownst to the Israeli public, the United States took a hand in the choice through Noble Energy of Texas, one of the two biggest shareholders in Tamar and Leviathan alongside the Israeli Delek Group.
Erdogan eager for Israel to join his energy deal with Iraqi Kurdistan
Netanyahu was persuaded to finally reject President Vladimir Putin's offer of Russian financing for production development and a pipeline network from the Israeli gas reservoirs to European markets.
Acceptance of the Putin offer would have made Europe more dependent on Russia for its gas. This Washington was resolved to forestall.
But Putin doesn’t give up easily – especially when Russia’s near-monopoly over Europe’s sources of natural gas is affected. He now aims to purchase at least 30 percent of Israel’s export product and so, over Netahyahu’s head, become an important player in Israel’s burgeoning gas industry.
The Russian president is soliciting aid for his scheme from Israeli billionaire Yitzhak Tshuva, owner of the Delek Group.
While Tshuva tends to eye the megabucks potential of a deal with Moscow, Netanyahu is looking at the strategic potential offered by a strong partnership with Turkey approved by Washington.
Prime Minister Erdogan continues to abuse Netanyahu and policies in public. But in private conversation, he shows his eagerness for an energy alliance with Israel.
His plans are far-reaching: They are to draw Israel into an ambitious partnership with the Kurdish Regional Government of Iraq for Turkey’s Genel Energy to build a multiple gas and oil pipeline infrastructure to bring Kurdish hydrocarbons from Kirkuk to Europe via Turkey.
The first step was taken when KRG Prime Minister Necirvan Barzani visited Ankara last week.
Using energy to power a Turkish-Israeli-Kurdish alliance
This scheme would leave the Baghdad government headed by the Shiite Nuri al-Maliki out in the cold and be intensely disapproved by Tehran.
By carrying it forward, Erdogan would also provide an extra push for Kurdish independence in Iraq and Syria. This would mesh well with the Turkish leaders’ current peace moves with the Turkish Kurdish underground leader Abdullah Ocalan and his historic reconciliation with the Kurdish minority in his own country.
Joining the Turkish-KRG energy partnership would also fit in with the strong strategic, military and intelligence ties Israel has cultivated with the Kurds of Iraq. It would pave the way for the formation of a Turkish-Israeli-Kurdish Middle East Crescent, that would be grounded in an energy partnership which uses Turkey as the highway for exporting gas from the region to Europe.
The Turkish and Israeli armies, navies and air forces would need to restructure for their new mission of defending the gas and oil fields and their pipelines. They would also have to work together and share these duties.
DEBKA-Net-Weekly's intelligence sources report that in recent private conversations with US Secretary of State John Kerry, Erdogan promised repeatedly not to act on his harsh verbal assaults on Cyprus regarding the gas issue, or press his claim for the Turkish Cypriot Republic’s right to a share. Ankara, he said, would not force its will on this issue by military means – partly because of its present focus on transactions with Israel and, even more, on cutting down Russia’s share in Europe’s gas supply to a minimum.