Anyone following the again-deteriorating relations between Israel and Turkey will not be surprised by its negative impact on prospects for a bilateral natural gas deal.
Turkey’s Minister of Energy Taner Yildiz said on Tuesday that the plan to buy gas from Israel’s Leviathan field had been suspended in the wake of the war with Hamas.
Speaking at a press conference with his Maltese counterpart, Yildiz denounced Israel’s military offensive, the first time a senior Turkish official has publicly linked the Gaza situation with a gas deal.
Noble Energy, the principal partner of Delek Group in the rights to the Leviathan field, has delayed taking the final decision on developing the field with an investment of $6 billion.
Noble attributed the delay to regulatory uncertainties regarding the imposition of natural gas price controls and approving the regulator’s antitrust arrangements, but geopolitical considerations cannot be ignored.
“Since Jordan has also suspended signing an agreement to buy gas from Leviathan because of the fighting in Gaza, the field’s future becomes even more dependent on the deal which is forming to sell gas to BG and its LNG installation in Egypt,” Globes wrote.
But the seriousness of BG’s interest has been questioned. Analysts say that BG is not really interested in a long term deal but is using the talks to put pressure on the Egyptian government to remove regulatory restrictions on gas prices and the scale of the company’s operations in Egypt.