Israeli pipeline deal could be scrapped, Putin says

Both Turkey and Russia say the Blue Stream II gas project may not be extended to Israel, but for different reasons. While Russian Prime Minister Putin cites decreased Israeli demand for the energy, Ankara was already threatening to suspend energy cooperation in the wake of Israel's raid on an aid flotilla last week

The proposed Blue Stream II natural-gas pipeline may no longer extend to Israel – originally envisioned as a key customer – Russia’s prime minister said Tuesday, citing economic rather than political concerns.

Vladimir Putin’s remarks came after Turkey said it would shelve all energy-cooperation deals with Israel unless the country apologizes for the attack on a Gaza-bound aid ship that killed eight Turks and one American of Turkish descent.

“The problem is different,” Putin told a joint news conference with his Turkish counterpart, Recep Tayyip Erdoğan, on the sidelines of a regional security summit in Istanbul. “Israel, according to the data available, has found natural gas on its own continental shelf. Therefore I think Blue Stream [II] may not be extended to Israel because of economic concerns.”

Seemingly contradicting Ankara’s position, the Russian prime minister made clear Israel’s exclusion from the project would be unrelated to what he called “the tragic incidents” sparked by the deadly Israeli raid last week.

Putin, however, declined to speculate further on the issue, saying only, “The basic issue is Israel may not need this gas that much.”

“This issue is not on our agenda,” said Erdoğan, in response to the same request for additional information.

A senior Russian diplomat told the Hürriyet Daily News & Economic Review that Israel had been anticipated as a major recipient of the natural gas to be shipped from Blue Stream II.

“Under the current circumstances, it would not be rational to implement the project because there would be no big market for the gas supplies,” said the diplomat, who wished to remain anonymous.

In March 2009, Turkey and Russia agreed to establish a working group for the realization of the Blue Stream II project, which aims to transport Russian gas to the Middle East, including Israel, via Turkey. The project foresees the construction of a new pipeline in parallel to the current Black Sea route Blue Stream, through which Russian gas supplies are transported to Turkey.

Energy is one of the major areas of cooperation between Turkey and Russia. During a key visit in May by Russian President Dmitry Medvedev, Moscow agreed to $25 billion in mostly energy projects with Ankara, including Turkey’s first nuclear power plant.

Russia’s deputy prime minister, Igor Sechin, and Turkish Energy Minister Taner Yıldız signed a deal Tuesday on the exchange of information and expertise concerning the licensing of nuclear facilities and related activities.

Trilateral summit

The presidents of Turkey and Kazakhstan also met with Putin on the sidelines of the Istanbul summit. Abdullah Gül, Nursultan Nazarbayev and the Russian leader discussed the Samsun-Ceyhan project, which aims to diminish tanker traffic on the Bosphorus and the Dardanelles. Both Russian and Kazakh oil are expected to be shipped through the proposed pipeline.

Diplomatic sources said Gül pointed at passing tankers on the Bosphorus from the Çırağan Palace, where the international summit was taking place and said, “We need to shift them to the Samsun-Ceyhan [pipeline].”

http://www.hurriyetdailynews.com/n.php?n=gas-pipeline-may-not-be-extended-to-israel-for-economic-concerns-says-putin-2010-06-08