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Netanyahu Says Common Pipeline With Cyprus Being ‘Studied’

February 17, 2012

(Updates with Netanyahu Iran comment in sixth paragraph.)

Feb. 16 (Bloomberg) -- Israeli Prime Minister Benjamin Netanyahu said that Cyprus and Israel are studying the possibility of a common pipeline that could help export natural gas to Europe and Asia.

Netanyahu, making the first visit to Cyprus by an Israeli prime minister, said today that he and President Demetris Christofias discussed a variety of ways that the two countries can work together in energy exploration, agriculture, tourism and science. Both leaders declined to speak publicly about proposals for military cooperation.

“We are looking at the possibility -- we haven’t taken a decision -- about a 40-kilometer pipeline between the two findings” off the coast of Israel and Cyprus, Netanyahu said at a press conference with Christofias at the Presidential Palace in Nicosia. He said gas could be liquefied in either Cyprus or Israel and exported to Europe or Asia.

The two countries have discovered quantities of offshore gas in the past two years estimated to be worth billions of dollars in exports. Turkey and Lebanon are demanding pieces of the natural gas bonanza that a group led by Houston, Texas-based Noble Energy Inc. discovered off the coasts. Israeli Energy Minister Uzi Landau, who accompanied Netanyahu to Cyprus, has said his nation is willing to use force to protect its gas field from outside claims.

Iran Sanctions

Netanyahu also said today that sanctions imposed on Iran so far have not been effective. He said Iranian President Mahmoud Ahmadinejad’s tour of centrifuges at a Tehran research reactor yesterday was proof that sanctions haven’t hurt Iran’s efforts to develop nuclear capabilities.

“If anyone needed a reminder that sanctions so far have not stopped Iran’s nuclear program, it was the guided tour by Iran’s president,” Netanyahu said. “I hope that sanctions work but so far they haven’t worked.”

Israeli leaders have treated relations with Cyprus carefully for years out of concern it could harm Israel’s military alliance with Turkey. The growing antipathy of Turkish Prime Minister Recep Tayyip Erdogan as well as the recent gas discoveries have led Netanyahu to cultivate ties with Cyprus, said Emanuel Gutmann, an emeritus professor of political science at Hebrew University in Jerusalem.

“It really wasn’t important enough for us and there were good reasons not to offend Turkey,” Gutmann, who has studied Cyprus since the 1940s, said in a phone interview. “Now everything has changed.”

Traded Barbs

The visit comes as Turkey and Cyprus trade barbs over drilling rights. Cyprus on Feb. 13 started a tender for oil and gas licenses for 12 blocks in its exclusive economic zone.

Turkey says some of the areas are within Turkish territory and called the move “irresponsible and provocative.”

Turkey “will take all necessary measures to protect its rights and interests,” the Turkish Foreign Ministry said in a statement last night.

Christofias condemned Turkey’s “provocative and aggressive stance.” He called on “the international community and especially the European Union to send a strong message to Turkey that it must stop violating and start respecting international law.”

Netanyahu’s trip follows the Cypriot leader’s visit to Israel in March and Israeli President Shimon Peres’s tour of Cyprus in November.

Gas Findings

Cyprus has been split since 1974 when Turkey invaded the island in response to a coup by supporters of union with Greece. The European Union, which only recognizes the Greek Cypriot-run Republic of Cyprus, has called on Turkey to recognize Cyprus and help resolve the ethnic division on the island.

Noble Energy, which holds the license to explore and exploit gas in Block 12 of the island’s offshore territory, said on Dec. 28 that it discovered as much as 8 trillion cubic feet of gas off the island’s southern coast, Cyprus’s first discovery. Israel’s Leviathan field may hold as much as 20 trillion cubic feet of gas, Noble said in a Dec. 19 statement.

The U.S. Geological Survey estimates that the Levant Basin, a triangular slice of the Mediterranean lying between Cyprus and Israel, may hold 122 trillion cubic feet of gas. Noble Energy discovered the Tamar field in 2009 and the Leviathan field in 2010, both off the coast of Israel.

Lebanon has asked the United Nations to adopt measures to prevent a conflict with Israel over energy exploration in areas that may fall within Lebanese territorial waters. Lebanon, which signed an agreement with Cyprus demarcating their respective offshore territories in January 2007, has failed so far to ratify it.

Lebanon’s militant group Hezbollah, which fought a war with Israel in 2006, has repeatedly pledged to protect the country’s offshore resources. Erdogan sent fighter jets and frigates to escort a Turkish seismic research ship planning east Mediterranean exploration last year.

--With assistance from Emre Peker in Ankara, Nayla Razzouk in Dubai and Massoud A. Derhally in Beirut. Editors: Louis Meixler, Alan Crawford, Karl Maier.

To contact the reporters on this story: Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net; Stelios Orphanides in Nicosia at sorphanides@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net


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