Israel and Turkey on Thursday agreed to begin discussions on building a gas pipeline to pump Israeli gas to Europe, AFP reported.
The agreement came as Israeli Energy Minister Yuval Steinitz made the first ministerial visit to Turkey since a crisis in ties, meeting his Turkish counterpart Berat Albayrak in Istanbul.
The meeting was the highest level official meeting since the two countries normalized ties in June after a 2010 crisis.
Hailing his visit as the start of economic benefits of normalization, Steinitz said they agreed to start examining the feasibility of building an undersea gas pipeline to pump Israeli gas to Turkish consumers and on to Europe.
"What we decided is to establish immediately a dialogue between our two governments... in order to examine the possibility and the feasibility of such a project," he was quoted by AFP as having said.
Steinitz added that while Israel was also building regional energy cooperation links with Jordan, Egypt, Cyprus and Greece "the Turkish option is very important".
He noted that Israel "will also be glad to see Turkish companies involved in Israeli energy sector" including in the exploration of gas fields.
A fluent English speaker, Albayrak is President Recep Tayyip Erdogan's son-in-law and seen as one of the rising stars of the Turkish government, noted AFP.
The Turkish energy ministry said in a statement meanwhile that the two ministers had agreed "to establish dialogue on exporting natural gas."
Israel and Turkey signed a reconciliation agreement this past June, six years after their relations deteriorated after the 2010 Mavi Marmara incident.
In that incident, IDF soldiers boarded the Marmara after the Islamists on board, who claimed they were carrying humanitarian aid for Gaza, refused to reverse course and dock at the Ashdod Port.
Upon boarding the ship, the soldiers were attacked by the Islamists with clubs and knives, forcing the troops to open fire and killing 10 of the activists on board.
Under the reconciliation deal, Israel paid Turkey $20 million in compensation for the deaths of the 10 pro-Hamas Turkish assailants.
The agreement also provides for normalization of relations, the removal of sanctions the countries have imposed on one another, an increase in the level of diplomatic relations and an exchange of ambassadors.
Turkey, which is hugely dependent on Russia for its energy imports, is keen to diversify supplies and has a close eye on Israel's own developing resources.
Israel is searching for energy partners to develop its Leviathan natural gas field in a bid to make it economically feasible.
"I believe energy is a sweetener in normalizing Turkish-Israeli relations," energy expert Necdet Pamir of Bilkent University in Ankara told AFP.
"From Israel's perspective, shipping its gas to Europe through Turkey is the most profitable way," Pamir said. "Turkey is the most rational market for Israel."
Steinitz said on Thurday that Israel has discovered so far approximately 900 billion cubic meters (bcm) of natural gas but further exploration could raise the estimated reserves to around 3,000 bcm.
"This is a lot of gas -- much more than a little country like Israel can consume," he added.
The Israel-Turkey deal appeared to be part of a general recalibration of Turkish foreign policy under Prime Minister Binali Yildirim, who took over in May, to limit regional disputes that had multiplied under his predecessor Ahmet Davutoglu including with Russia.
Steinitz described his visit as "a token of this normalization process that has just started."
The minister also said he had discussed the involvement of Turkish companies in improving the lives of Palestinian Arabs in Gaza, insisting this was not against Israel's interests so long as its security was preserved.