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Turkish company in talks with Israel on gas transportation

1 November 2013

Turkish company, Zorlu Energy is in talks with Israeli companies about the possibility of constructing a pipeline to transport Israeli gas to Turkey.

However, the potential for the deal is being delayed by the ongoing political rift between Turkey and Israel.

Israel will be exporting its gas in the future following discoveries of huge quantities in its offshore fields – Leviathan and Tamar and has already signed an energy cooperation agreement with Greece earlier this month.

Currently Turkey, is highly dependent on imports for most of its energy; in particular gas from Russia which is costly. If an agreement could be reached between Turkey and Israel, Turkey could become a customer of Israel as well as transit route to other markets, including the EU.

“Turkey is a very suitable route for Israeli gas. I can even say it is the most suitable,” said Omer Yungul, chief executive of Zorlu Holding, the owner of Zorlu Enerji.

Currently relations between Turkey and Israel remain fractured by the Mavi Mara incident in 2010 which saw a Turkish peace convoy stormed by Israel commandos. Nine Turkish peace activists died in the raid while they were attempting to break an Israeli naval blockade of Gaza. Despite offering a formal apology to Turkey, there remain outstanding issues of financial compensation for the families of the Turkish nationals who were killed the raid.

Zorlu Group, which already holds an indirect stake in an Israeli power plant, is in talks with private Israeli companies over a possible pipeline deal. Yungul did not confirm the talks, but said Zorlu Energy’s existing investments in Israel have given it a head start. Zorlu Energy holds a 25 percent stake in Dorad Energy, which is building an 875 megawatt (MW) gas-fired power plant in Ashkelon on the Israeli coast. Yungul said the first unit of the plant would come on line by February 2014.

Other Turkish companies including Turcas Petrol are also interested in a pipeline project, officials on both sides have said. Such a project could be worth USD3.5 billion, according to Amit Mor, an Israel-based consultant.

 

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