The American Vacuum the Russians Rushed to Fill in the Eastern Mediterranean
The prospect of Israel importing natural gas to Turkey is unlikely, according to natural gas and geopolitical consultant George D. Papadopoulos. He offered the opinion at a conference entitled "2015 Business and Energy Convention" which recently took place in Israel, during which he described the new geopolitical landscape in the Eastern Mediterranean region.
His opinion could likely rub investors the wrong way: Turkey is reportedly the destination to which Noble Energy and, in particular, Delek Group, believe its gas should go, as both regard the Turkish market as the most lucrative one.
"As you know, Cyprus, Israel Jordan, and Iraq are all planning on sending gas to Egypt," said Mr. Papadopoulos in an exclusive interview with Natural Gas Europe. "These plans will be expanded [to] the idle LNG plants [in Egypt] that everybody talks about. There is burgeoning demand in Egypt. Why risk building a pipeline to a very problematic country that is not only occupying Cyprus right now, which has no relationship with the island, but with whom Israel has no ambassador, no political relationship, except at the minimum?"
He continued, "Given that there is an alignment that is emerging between Cyprus, Greece, Israel and Egypt and Jordan, why force a pipeline into Turkey instead of looking at what you have in front of your eyes? And that is the Egyptian market, with which you anchor yourself to the Middle East. For the first time in history, you would feed a burgeoning demand in Egypt, and you can export to global markets, at the same time stabilising the [Egyptian President Abdel Fattah] el-Sisi regime, which for the entire region must survive."
NGE: Would Sisi like to see Israeli support? And will Israel subsidise natural gas for Egypt?
Mr. Papadopolus: El-Sisi means business. [The investment needed to develop Leviathan] will be $6-7 billion. It will be hard to export gas to Europe. The Egyptian market is very economic.
NGE: How do you see the developing axis between Israel, Cyprus and Greece in relation to Turkey?
Mr. Papadopoulos: This is an unintended consequence of Turkey's foreign policy, which went from having no problems with its neighbours to now having problems with all her neighbours. When the Muslim Brotherhood were in office, Turkey was the Muslim Brotherhood's no. 1 ally. The Muslim Brotherhood in 2013 wanted to cancel the peace agreement with Israel and to nullify the EEZ with Cyprus, because both [those agreements] are against Turkey's interests. All of a sudden, the Muslim Brotherhood was overthrown and Turkey lost Egypt.
That is why when el-Sisi came to power Erdogan said it is a coup, it is illegal, we should restore Morsi [the deposed president] and now Muslim Brotherhood is based in Istanbul. Regional events would argue that Israel and Cyprus needed alternative partners because Turkey can no longer be relied upon. So who do they immediately go to? Egypt, Greece, Europe, and the pro-western Arab regimes and the region.
NGE: So is Israel in alliance with Greece and Cyprus against Turkey?
Mr. Papadopoulos: Since 2010 the Greek Greece, not Cyprus, has been conducting military activity with Israel. Israel has replaced Turkey with both Cyprus and Greece as a prominent military partner in the eastern Mediterranean. That is a very important shift. That is very under the radar. Two to three years ago, there were discussions of sending gas [from Israeli natural gas fields] to Vasilikos, Southern Cyprus. The security question that emerged from that was that Israeli military [has to] protect the facility in Cyprus, considering Cyprus has no real military, and the answer was "no". Cyprus, from my meeting with them--I am speaking with the president and his people--I think they see Russia as more of a security guarantee than any other country in the world. Of course, they have very good ties with Israel, and Greece, of course, dictates many things that happen in Cyprus. So when it comes to security I would rank it Greece first with Russia, and then Israel.
NGE: Does that mean that Israel and Russia are coordinated in their activities in the region?
Mr. Papadopoulos: They have to be.
NGE: So does Israel prefer an alliance with Russia over the one with the U.S.?
Mr. Papadopoulos: No. Of course, Israel and the United States are close allies. Russia, though, due to regional events in Egypt, due to many things that people don’t realise, when the Egyptian Muslim Brotherhood were overthrown by el-Sisi, over the last year and a half Russia filled the vacuum when the United States did not know whether to support the coup or not.
Russia just finalised last month an agreement to build nuclear power plants in Egypt. This was deemed the most robust energy deal and economic deal since the Soviet Union financed the Aswan dam in the 1960s. It is a tremendous achievement in just one year in what happened between Russia and Egypt. Russia is now incredibly active in Syria and in Lebanon. Whether Israel likes it or not, they will have to deal with Russia for their own security because the facts on the ground have changed so fast and Russia exerted so much influence so quickly that Israel left no other choice but to cooperate over Syria and Lebanon and potentially Egypt. And this is all a result of U.S. policy leaving the vacuum and leading from behind [which] unfortunately the Obama administration advocated for.
NGE: So do we see a new block here: Israel, Cyprus, Egypt and Greece and with Russia in the background?
Mr. Papadopoulos: I don’t think Russia is in the background. I think Russia is very active now and I think it comes so fast. People are trying to understand what this means for politics, the security, and the energy picture in the region.
Ya'acov Zalel