Zorlu Enerji, Turcas Petrol shares jump following Turkey, Israel signing deal

Published 27.06.2016 22:11
Updated 27.06.2016 22:12
Zorlu Group’s third energy facility in Israel is the 120-megawatt Ramat Negev natural gas power plant, which started its operations on Dec. 31.
Zorlu Group’s third energy facility in Israel is the 120-megawatt Ramat Negev natural gas power plant, which started its operations on Dec. 31.

Following an agreement signed over the weekend between Turkey and Israel regarding the normalization of bilateral relations, the shares of Zorlu Enerji, carrying out business operations in Israel, and Turcas Petrol, interested in purchasing natural gas from Israel, saw considerable rises on Borsa Istanbul, increasing by 11.9 percent to TL 1.91 ($0.65) per share and by 2.11 percent to TL 1.45 per share, respectively.

Turkish and Israeli delegations met in Rome over the weekend to finalize the reconciliation deal between the two countries, and after six years of diplomatic struggle, Ankara succeeded in receiving an apology from Israeli Prime Minister Benjamin Netanyahu, compensation for the Mavi Marmara raid victims and the lifting of the Gaza blockade. As Turkey-Israel relations were officially normalized with this agreement, investors set their eyes on Zorlu Enerji and Turcas Petrol, both of which have business ties in Israel.

Upon the signing of this deal, it is expected that negotiations regarding a natural gas deal between the two countries will gain momentum towards an agreement, which may result in the transportation of between eight to 10 billion cubic meters to Turkey in 2020. Zorlu Enerji and the Turcas-Enerjisa consortium are Turkish companies which have expressed an interest.

In December, Turcas Petrol, which develops projects to export reserves from the Leviathan offshore gas field to Turkey, released a statement in which CEO Batu Aksoy underlined that bringing eastern Mediterranean gas to Turkey serves the country's strategy towards becoming an energy hub. They recalled their intention to carry Israeli gas to Turkey and will handle sales in Turkish and European markets.

Zorlu Group, one of the biggest corporate groups in Turkey, has carried out investments and operations in Israel. The second energy plant in Israel built by Zorlu Holding started operating in Ashdod on Dec. 20. According to a written statement released by the company, the Ashdod natural gas power plant was built by the Ezotech Electric Limited Company, 42.15 percent of which is held by Zorlu Holding, and produces 55-megawatts of power. The power plant, which is located in the Northern region of the Ashdod province of Israel, cost about $110 million. In addition to the 55-megawatt Ashdod, the group also has other investments in Israel, such as the 120-megawatt Ramat Negev natural gas power plant, Zorlu's third energy facility in Israel. The Ramat Negev natural gas power plant started operating on Dec. 31. Zorlu Energy made their initial investment in Israel in 2003, taking a 25 percent share in Dorad to undertake investment, contracting, operational and maintenance services for a natural gas power plant project in Ashkelon, Israel. By the time all these projects are complete, Zorlu Holding will supply seven percent of Israel's energy.

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