Cypriot peace talks founder as Russia expands influence

Feb. 17, 2017
While talks founder over the reunification of Cyprus, Russia is using energy initiatives to gain influence in the eastern Mediterranean.

While talks founder over the reunification of Cyprus, Russia is using energy initiatives to gain influence in the eastern Mediterranean.

Peace talks under way for nearly 2 years between Turkish and Greek Cypriot officials took a hopeful turn in January when representatives of Turkey, Greece, and the UK joined the effort. Those countries are guarantors of the island nation, partitioned since 1974 between the Turkish north and Greek south.

Ankara wants agreement on Cypriot governance before it addresses a territorial dispute blocking development of a marine pipeline to carry gas from Israeli fields and possibly Aphrodite field off Cyprus to Turkey.

The pipeline could help meet Turkish gas needs and feed the Southern Gas Corridor under development to carry Caspian gas across Turkey to southern Europe.

The European Union supports that project—including the Trans Anatolian and Trans Adriatic pipelines—as an alternative to Russian gas.

With no pipeline connection to Turkey, Israel looks south to Egypt’s dormant liquefaction plants. But Egypt suddenly has new gas potential in deepwater Zohr field, the largest discovery so far in the Levantine basin. Unlike Israel’s giants, Zohr is under active development.

New Israeli production could supplement Zohr supplies in support of LNG exports.

But Egyptian officials recently hinted about large discoveries yet to be announced and about start-up of LNG exports in 2019. Egypt might not need Israeli gas.

Meanwhile, Russia is expanding in the region, at least partly to defend European gas markets. In December, state-owned Rosneft agreed to buy a 30% interest in Zohr field for $1.575 billion.

And in January, a high-ranking official of Gazprom said his company might bid for Southern Gas Corridor capacity under rules adopted by the EU to block Russia’s South Stream pipeline across the Black Sea.

A pipeline between the Israeli fields and Turkey looks possibly less complicated than alternatives on a map.

But talks over Cypriot reunification are reported to have all but collapsed Feb. 16, so disagreement remains over whose map to use.

(From the subscription area of www.ogj.com, posted Feb. 17, 2017; author’s e-mail: [email protected])