Israeli gas, Iranian Missles, and the Russian Price Tag
by Rotem Sella
• Aug 17, 2012 at 7:08 am
|
Share:
   |
Be the first of your
friends to like this.
In the on-going debate over an Israeli attack on
Iran, attention has largely focused over the last few weeks on Israel and
America, for good reason. But what about Russia?
A very senior person in the Israeli gas industry tells me: "The
Russians have been poking around here for a while. Everyone knows about the
Russian interest in controlling the European energy market. Do they want to buy
from us, or delay our efforts? I don't know. But they are here."
In early July, the Israeli energy and infrastructure news website
"Thastiot" claimed that during Vladimir Putin's much publicized visit
to Israel, Putin and Israeli Prime Minister Netanyahu agreed to form a junior
company to Gazprom – the Russian oil and gas giant—which would help develop
Israel's biggest gas field, the recently discovered reserves in the eastern
Mediterranean, the so-called "Levyatan" (Leviathan) reserves.
"Eventually Israeli gas will be exported to the far east," Ohad
Marani, CEO of IDLC energy which is already drilling the Myra, said to me. For
him, the question is purely economic. "In the Far East we will see three
times what we see in Europe. While we won't be able to keep the whole margin,
it's surely better than any European option, which would involve an expensive
pipe."
The senior industry veteran with whom I spoke is not quite sure. Yes, the
Far East has unlimited demand ("The Japanese are lessening their reliance
on nuclear, and the Chinese can never have enough") but the European
market remains relevant and we have this massive amount of gas already
discovered or to be discovered. The US geological survey (USGC) estimates that
gas reserves in the eastern Mediterranean amount to 345 trillion cubic feet
while Russian gas reserves in Siberia are estimated at 643 tcf.
Big business! With lots of Russians having come and gone to Israel on this
question, one wonders about the relationship between the gas deal and Russian
involvement on the Iran question.
The same week Putin visited Netanyahu in Jerusalem, Eurasia
monitor published that:
"the government agency that oversees Russia's arms exports and imports…
confirmed that Iran is suing Russia for damages to the tune of some $4 billion
in the Court of Arbitration in Geneva for cancelling in 2010 a contract to sell
five divisions of the S-300 long-range antiaircraft missile system worth an
estimated $800 million to $1 billion."
By some estimates the worth of the Levayatan gas-field might be 15 billion
dollars say Gilad Alper, the gas industry analyst at the Excellence Investment
house. It trades today at a price of 3 billion dollars.
Another way to look at it: Levayatan contains 473 billion cubic meters of
gas. Gazprom exported 150 billion cubic meters of Gas to Europe in 2011, at a
price of 384$ per thousand cubic meters – revenue of 57.6 billion dollar—this
year Gazprom raised the price to 415$, an 8% increase that will generate
another 4.6 billion dollar of revenue to Gazprom. What would be the cost of
keeping Israeli competition neutralized? Would it be worth the cancellation of
an 800 million dollar deal? Could Russian action over the missile sale and
Israeli gas reserves indicate that they have come to terms with the Israeli
point of view?
Prominent Americans like David Petraeus have been saying non-stop that
Israel does not have the capability to destroy Iranian Nuclear capacities, and
surely not Iran's ambition to go nuclear. But if Israel can indeed delay the
project while in the meantime having taken out of the picture one of Iran's
most important allies, then things might look very different from the office of
Prime Minister Netanyahu. Everyone knows that Russia intends to play the
'spoiler' in the International arena. But this spoiler frequently has a price
tag.
Related Topics: Iran,
Israel, Russia
| Rotem
Sella
You
are subscribed to this list as vicky13@rogers.com.
To subscribe to the this mailing list, go to http://www.gatestoneinstitute.org/list_subscribe.php
To subscribe to the this mailing list, go to http://www.gatestoneinstitute.org/list_subscribe.php
Posts
No comments:
Post a Comment