Israel aims to hook up to Azeri-Turkish pipelines

BAKU (Reuters) - Israel said on Thursday it wanted pipelines carrying oil and gas from Azerbaijan to Turkey to run as far as its territory to help it meet domestic demand as well as an opportunity for exports to Asia.

Azeri oil and gas exports are due to flow to Turkey via the Baku-Ceyhan and Baku-Erzurum pipelines respectively. Israeli National Infrastructure Minister Benjamin Ben-Eliezer said Israel wanted both extended to Israel.

"We and the Azeris are interested in transporting Azeri oil from Ceyhan through the Israeli Ashkelon-Eilat pipeline, and from there to big markets like India and China," he told a news conference in Baku.

He said Israel's 254 km (158 mile) Eilat-Ashkelon pipeline running between the Mediterranean and the Red Sea was "the cheapest and shortest route" between the two bodies of water.

The $4 billion Baku-Ceyhan pipeline, a project led by Britain's BP Plc, is scheduled to be officially launched in July after repeated delays, and will eventually export more than 1 million barrels of oil per day from the Caspian.

Ben-Eliezer said Azerbaijan already supplied 2 million tonnes of oil a year (40,000 barrels per day) to Israel but he wanted it to supply half of the 12 million tonne annual demand.

To meet its gas needs, Israel wanted Azerbaijan to offer a similar deal to one already signed with Egypt, he said, under which it will pay $2.5 billion to buy 1.7 billion cubic metres of gas over 15 years, with an option for a further five years.

"Our government wants to interest Azerbaijan and Turkey in extending the gas pipeline from Erzurum as far as Ceyhan and we will buy as much gas as Azerbaijan can offer us," he said.

"I have discussed this with Turkey's prime minister and our discussions will continue."

Later this year the Baku-Erzurum pipeline is due to start pumping about 400-500 million cubic metres of gas annually from the Caspian Shakh-Deniz field.

Ben-Eliezer said he was also considering Russia as a source.

"We are now holding talks on buying gas from Gazprom," he said.

Russian export monopoly Gazprom has a pipeline, jointly owned with Italy's Eni, which runs under the Black Sea to Turkey.

Russian President Vladimir Putin has said the pipeline, known as Blue Stream, could be extended through Europe, but Turkish Energy Ministry official Salih Pashaoglu told reporters in Baku on Wednesday that it could be extended to the south coast of Turkey.

That would allow exports to Israel or gasification for transport of the gas to India as liquefied natural gas (LNG).

Ben-Eliezer said Israel wanted it.

"We would like Blue Stream to be extended to the south of Turkey and then connected to Israel by an undersea pipeline," he said. "But whatever the outcome of talks with Gazprom we are prepared to buy Azeri gas."

Azerbaijan has said that like Gazprom it also sees good prospects for its gas to be shipped to southern Europe via Turkey to compete with Russian supplies amid increased European concerns about heavy energy reliance on Moscow.

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