For Cyprus, a Sudden Need to Play Nice With Turkey
For its part, Israel had been turning to Cyprus as a regional partner, signing defense and cooperation agreements partly aimed at protecting their overlapping gas fields, since the raid on the aid vessel, the Mavi Marmara. Then, on Friday, in a dramatic overture, and apparently with a push from the United States, the Israeli prime minister, Benjamin Netanyahu, apologized for the loss of life, a move immediately welcomed by the Turkish prime minister, Recep Tayyip Erdogan.
The thaw is mainly aimed at containing the conflict in Syria. Rebuilding trust still could take time. But the move already looks like a game-changer for the region’s energy politics.
“Détente between Israel and Turkey could make the export of Israeli gas to and through Turkey feasible,” said Michael Leigh, a senior adviser with the German Marshall Fund of the United States. “This is among Israel’s most commercially viable export options.”
Cyprus’s diminished stature makes “a new Israel-Cyprus-Greece Mediterranean energy corridor or political alignment unlikely,” he said. “All three countries should seek ways to cooperate with Turkey in developing the region’s resources.”
Focusing on hydrocarbons would be a smart move for the Cypriots, who need to diversify their “economy away from dependence on offshore banking
” and should “like the Israelis and the Norwegians, develop energy-related high-tech industries,” Mr. Leigh added.
A key player is Noble Energy, based in Houston, which is leading the drilling in Cypriot waters, along with Israeli partners, giving both the United States and Israel huge stakes in the find.
Noble has announced finds of 35 trillion cubic feet and said last year that about 20 percent of it is in Cypriot waters. Noble has been working with Israeli partners under license from Greek Cypriot leaders, many of whom regard the undersea area as theirs to exploit as they please.
A “potential” scenario is to build an L.N.G. plant in Cyprus, but cost estimates and a timeline for the project still need to developed, Ben Dillon, a spokesman for Noble, wrote in an e-mail Wednesday. The main alternative — a pipeline from Israel or Cyprus to Turkey — “would need to be studied carefully in the light of the difficult physical terrain,” Mr. Dillon wrote.
Significant investment is still needed to begin extracting the gas and get it to market. Exports also may not begin until 2019.
But with its bailed-out and bombed-out economy, the goal of building a liquefied natural gas plant on Cyprus now looks like an insurmountable financial challenge, leaving the Cypriots with little choice but to pipe gas to Turkey.
“You get higher and faster revenues — I estimated €15 billion more — if you export gas via a pipeline to Turkey rather than pour money into a costly and energy-intensive L.N.G. plant that will initially not create jobs for Cypriots,” said Ms. Mullen, of Sapienta.