Israel vs. Turkey, Round Three: Natural Gas

This week, Israel signed an agreement with Italy regarding the construction of a gas line in order to prevent a shortage of natural gas amid threats from Turkey and Lebanon.

Israel Natural Gas Lines reported this week that a gas terminal would be built near the city of Hadera by the Italian contractor Micoperi for $140 million.  The terminal is expected handle 87.25 million cubic feet of gas per year when construction finishes in 2012.The rapid construction comes in the wake of the Arab Spring, which led to uprisings in Egypt, Israel’s main supplier of oil and gas.  Since the revolution in Egypt, gas deliveries have been sabotaged and interrupted by terrorists and anti-Israel activists who have sabotaged the gas lines.  In addition, the new Egyptian government recently decided to halt all deliveries of oil to Israel until a new price was figured out.  Until last year, Israel was purchasing gas at a higher rate than other countries, but less than that the price is likely to be in the future.

Because of this, Prime Minister Benjamin Netanyahu ordered gas drilling companies to get to work on the Leviathan and Tamar fields as soon as possible.  According to infrastructure minister Uzi Landau, time is of the essence as he estimates there could be a shortages as soon as the end of 2012.  According to him, the planned terminal is "of the utmost strategic importance for the country's ability to ensure a continuous supply to its power stations and to safeguard its energy security”.

In addition to the agreement with Italy, Israel has also signed agreement and agreement with Cyprus to share the gas fields and send some of it to Europe as an export.  That treaty came in the wake of the Palmer Report and Turkish Prime Minister Recep Tayyip Ergodan’s extreme reaction to it in which all ties with Israel were cut.  Turkey is incensed by that agreement because it occupies northern Cyprus and wants some of the gas for itself.

Turkey and Lebanon have not commented on the agreement at this time although they are likely to object in the near future.