* Talks to import Israel's Leviathan gas likely to speed up
* Turkish officials say reaching a final deal wont take too
(Updates with comments from Turkish official, share price)
By Orhan Coskun and Dan Williams
ANKARA/JERUSALEM, Dec 18 Expectations that
Turkey and Israel will restore normal relations after a
five-year rift have raised hopes of speedy progress in talks to
import Israeli natural gas, potentially a multi-billion-dollar
Israel's once-strong ties to Turkey soured in 2010 when
Israeli commandoes killed 10 Turkish activists when storming the
Mavi Marmara, a ship in a convoy seeking to break an Israeli
naval blockade of the Palestinian territory of Gaza.
Turkey, largely dependent on imports for its energy needs,
has ramped up efforts to find new sources of natural gas due to
worsening tensions with Russia after Turkish forces shot down a
Russian warplane involved in bombing rebels in northern Syria
near the Turkish border last month.
Israeli officials said late on Thursday a deal to normalise
ties came after high-level bilateral talks in Switzerland.
Turkish officials said a final deal had yet to be sealed, but
given the progress on key topics, it would not be too long.
Even during the rift, plans to build a pipeline and import
natural gas from Israel's vast Leviathan field in the eastern
Mediterranean Sea were never shelved, a Turkish source close to
the talks told Reuters.
"Even the political authorities did not wish the talks to be
suspended. We knew that once the political issue was overcome,
the rest of the process would move swiftly," the source said.
Israeli officials largely welcomed the deal, but said Israel
should stick to its guns when it comes to security and limiting
of activity of some members of the Palestinian Islamist group
Hamas living in Turkey. Hamas controls the Gaza Strip.
"The expected agreement, which has yet to be concluded,
gives us, on the one hand, what we demanded - a heavy limitation
on Hamas activity in Turkey," Zev Elkin, an Israeli cabinet
minister, told Army Radio. "We should not fold. We should not
concede. We should stay firm on our interests."
Although the lifting of the Gaza blockade, one of Turkish
President Tayyip Erdogan's three conditions to normalise ties,
is unlikely given that Israel has said the policy is vital for
security against Islamist militants, a senior Turkish official
said progress has been made on the issue.
"There is a breakthrough regarding the blockade," the
Turkish official said. "We are nearing a final deal in talks
with Israel. We don't think it will be long."
Turkey's Humanitarian Relief Foundation (IHH), which
organised the 2010 aid convoy for Gaza that was stormed by
Israeli marines, issued a 13-point statement on Twitter that it
was not aware of any deal between Turkey and Israel.
"We think an agreement between Turkey and Israel will be
against Turkey, the Palestinian people and the peoples of the
Middle East," it said, adding there was no change in its
position on the Gaza blockade and Mavi Marmara.
The news of a potential restoration of ties between the two
countries came a day after Israeli Prime Minister Benjamin
Netanyahu signed a deal giving long-awaited approval for the
development of the offshore Leviathan project.
Leviathan, with estimated reserves of 622 billion cubic
meters, will cost at least $6 billion to develop. It is meant to
begin production in 2018-2020, although that timetable now looks
ambitious, and is to supply billions of dollars' worth of gas to
Egypt and Jordan, and possibly Turkey and Europe.
Israeli Energy Minister Yuval Steinitz said normalising ties
with Turkey had huge importance both to develop the Leviathan
stake and to bring international energy firms back to Israel to
look for new gas fields.
"I think that there is a serious, meaningful chance for
thawing and normalising relations between Israel and Turkey. I
also think that this is proof of the diplomatic value of the gas
and the gas plan," he said on Tel Aviv 102 FM radio.
Turkish firms have long been negotiating with Israeli
counterparts on a pipeline to carry Leviathan gas. Shares in
Zorlu Energy, one of those firms with energy assets in Israel,
rallied towards its upper daily trading limit. At 1426 GMT,
Zorlu Energy shares were 17.46 percent higher at 1.48 lira.
Both Zorlu Enerji and a consortium of Turkish firms Turcas
and Enerjisa have been in talks with Israel over the
price, potential route of a pipeline, partnership structure as
well as how to sell the gas, the Turkish source said.
"There's a potential of around 30 bcm gas resource there, of
which Turkey could buy 8 to 10 bcm," the industry source said,
adding that such a pipeline project would require up to $3
billion in investment.
(Additional reporting by Tulay Karadeniz; Writing by Humeyra
Pamuk; Editing by David Dolan)