Turkey: Game Changer Discovery: Leviathan Gas Field And Turkey's Energy Projection

Last Updated: 5 June 2014

Current gas field discoveries covering Leviathan and Tamar gas fields induced Israel to scrutinize applied energy strategies in Mediterranean Sea. In the light of these regional developments Israel's imported natural gas dependency is expected to reduce whilst energy driven industries will be ignited by upward domestic natural gas resources. Leviathan gas field, which was explored in 2010 is housing 750 bcm natural gas along with 600 million barrels of oil reserves will set up rules of games in energy markets.

Political Pattern: Israel and Turkey Relations

The energy politics has already triggered a new found rapprochement between beleaguered former allies, Turkey and Israel, in which the Israeli Minister of Environment Amir Peretz has recently visited Turkey to join a multilateral conference on environmental issues concerning Mediterranean, the Israeli airlines El-Al announced that it is seriously considering to re-start its flights from Istanbul to Tel Aviv and the Israeli representations in Turkey cancelled their national day celebrations in Istanbul and Ankara in memory of the miners perished in the incident that has recently taken place in Soma which met with the appreciation of Turkish Prime Minister Recep Tayyip Erdoğan who thanked Israel for its sensitivity. On the part of the Turkish side, recent statements point to a possible agreement on the issue of indemnity to be paid by Israel to the victims of Mavi Marmara. Such developments clearly show that a normalization of diplomatic relations between two countries are on the horizon and a possible cooperation on the energy front in which Turkey is a net importer, is a quite plausible possibility.

Transportation Alternatives: New Turkey-Israel Pipeline Project Close At Hand

Netanyahu government aims to structure a multifunctional energy policy that will benefit from geopolitical position of Israel with the intent of risk diversification on transportation of descried natural gas. A hot button is construction an offshore or onshore LNG terminal that Israel government is laying emphasis on. In the first phase of the Leviathan gas field partnership, predominating shareholder is Texas based oil & gas company Noble Energy with 39.66% of total shares while two Israel companies Delek Drilling and Avner Oil &Gas, each of hold 22.67%. Notwithstanding current partnership structure, Woodside Petroleum Ltd. ("WPL"), Australia's second-biggest oil and gas manufacturer, opened up negotiations with existing shareholders in an attempt to purchase a quarter of Leviathan gas field. The mainstream about this new potential partnership is witnessing a cutting-edge technology which is based on liquefying gas on ships offshore. However, Woodside took steps backward from the deal and it disrupted construction floating LNG terminal in Mediterranean.

Another LNG terminal project may arise in Cyprus which is notably appealing either Israel or Cyprus. In the eye of Cyprus, such a LNG project for Leviathan gas will be remarkably cost effective in comparison with Aphrodite gas transportation which requires to construct a pipeline between Cyprus and Greece. According to feasibility studies, the cost of LNG terminal will cost one third to one half as much as Aphrodite gas export by pipeline for Cyprus. Besides, Capital expenditures ("CAPEX") of LNG terminal in Cyprus will be also lower thus it will be very attractive for the Leviathan investors which are also operate in Cyprus for Aphrodite gas export.

As regards to Turkey, sub-sea pipeline between Turkey and Israel will provide the cheapest option for transportation of Leviathan gas. Approximately 2.5 billion dollars investment on pipeline will be required which is blatantly less than LNG terminal construction in Cyprus. Additionally, providing that Trans-Adriatic Pipeline ("TAP") and Trans-Anatolian Pipeline ("TANAP") are linked to pipeline, Leviathan gas will find opportunity to transport European Union countries through the Southern Gas Corridor. As a consequence, Turkey is able to be the natural gas trading hub between Europe and Asia.

Legal Obstacles: Diplomatic Conflicts of Cyprus and Turkey

The United Nations Convention on the Law of the Sea ("UNCLOS ") was signed in 1982, defined rights over use and maintain of sea for the purpose of energy production by countries and restricted the distance from the shore with 200 nautical miles from coastal baseline by prescription of exclusive economic zone ("EEZ"). Pursuant to Article 79 of UNCLOS, All countries are subjected to permission of coastal state of continental shelf for the purpose of subsea pipeline construction. Hence, a breakthrough in Cyprus-Turkey relations is the essential issue standing against a projected pipeline project between Turkey and Israel.

Expert Opinion: Breakthrough Gas Price Falls May Soon Be Possible

Leviathan gas exploration has already changed the geopolitical importance of such countries Israel, Turkey and Cyprus. Apart from this, even though political risks are carrying on between Turkey and Cyprus, on condition that Turkish investors are willing to make investment on pipeline between Turkey and Israel, it will directly affect natural gas prices in Turkey which currently driven by Russia Most particularly publicly listed companies' share prices are forecasted to increase if they invest in Leviathan gas transportation due to the fact that it is very promising. As soon as pipeline commence on operations, Russian natural gas provider Gazprom will be enforced to reduce exported gas prices to Turkey. In the meantime, if the networking between Eastern Gas Corridor and Leviathan gas field is provided, European energy markets will also experience drop of the natural gas prices. On the other hand, legal amendments related to gas export and import contracts and licensing procedures shall be completed for the purpose of ensuring free pricing mechanism for prospective targets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
Tiryakioglu, Cakmakci, Kesmer
Herdem Attorneys at Law
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Tiryakioglu, Cakmakci, Kesmer
Herdem Attorneys at Law
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions