In the last few weeks Israel’s newly-developed natural gas industry has taken several leaps forward in export proposals.
In an ironic twist, Israel has begun pitching a massive natural gas pipeline to Europe – ironic because Europe is the center for the BDS movement promoting boycotts of Israel:
Israel has proposed that EU countries invest in a multi-billion euro pipeline to carry its natural gas to the continent, noting that the supply from Israel would reduce Europe’s current dependence on natural gas from Russia.
A proposal for the “massive” project was introduced by Israel’s Energy Minister Silvan Shalom to energy ministers from Euro-Mediterranean countries who met in Rome earlier this week, Israel’s Channel 2 reported on Thursday.
It said the project would require a multi-billion euro investment from Europe to build a pipeline from Israel’s Mediterranean cost to Cyprus, from where the gas would be carried on to Greece and Italy.
The TV report said Cyprus, Greece and Italy were all supportive of the idea, and that Israel would make a formal presentation of the project to European representatives in Brussels in three weeks’ time.
Whether this proposal will fall victim to the politicking engendered by the new elections remains to be seen. I sincerely hope such an important issue is above politics and that the proposal will be carried through.
The benefit for the Europeans lies in Israel’s stability, with the rest of the Middle East in meltdown and Russia remaining highly volatile due to the Ukrainian crisis:
It would be cheaper for Europe to work on a supply route with Egypt, but this could expose the Europeans to instability because of the unpredictable political developments in Egypt, the report noted. Similarly, a pipeline from Israel to Turkey would be less expensive, but bilateral relations rule this out so long as Recep Tayyip Erdogan, a prominent critic of Israel, holds power there.
In September, Israel signed a deal to supply Jordan with $15 billion worth of natural gas from its Leviathan energy field over 15 years. The deal was Israel’s largest collaboration with Jordan to date, and will make Israel its chief supplier. Representatives of the gas companies involved, Delek Group Ltd. and Nobel Energy Inc., were in Jordan to sign the agreement.
And a reminder of the size of Israel’s gas fields:
Israel decided last year to export 40 percent of the country’s offshore gas finds, and has since also signed a 20-year, $1.2 billion deal with a Palestinian firm. In June it signed a letter of intent to supply energy to an Egyptian facility as well.
Israel began pumping natural gas in March 2013 from the Tamar deposit — discovered in 2009 and located some 90 kilometers (56 miles) west of Haifa — which holds an estimated 8.5 trillion cubic feet of natural gas.
In addition to Tamar, in 2010 an even larger deposit, Leviathan — which boasts an estimated 16-18 trillion cubic feet of gas — was discovered 130 kilometers (81 miles) west of Haifa. It is expected to become operational in 2016.
Globes adds another interesting detail:
Shalom’s proposal comes a few weeks after the EU announced that it would contribute €1.32 million to an electrical cable between Israel and Cyprus. The cable is part of the Connecting Europe Facility (CEF) plan, which will facilitate transmission of electricity in either direction. Its capacity will be 2,000 megawatts at a distance of 1,518 kilometers: 329 kilometers from Israel to Cyprus, 879 kilometers from Cyprus to Crete, and 1,310 kilometers from Crete to Athens.
Meanwhile, closer to home, Israel is in talks with Egypt to supply them with natural gas – yet another ironic twist of history when recalling the dozens of times that Egypt’s gas pipeline to Israel was blown up by Jihadi terrorists, and also the time that Egypt canceled its contract to supply Israel with gas. From the Globes link above:
Delek Group Ltd. (TASE: DLEKG) and Noble Energy Inc. (NYSE: NBL) are in talks over a contract worth billions of dollars of natural gas, which would be sold to the Egyptian market, sources inform “Globes.”
The gas would be supplied from both Israel’s offshore Leviathan field and Cyprus’s Block 12 (Aphrodite). Delek recently reported that the estimated amount of gas in the Cypriot field had been revised upwards from 4.1 TCF to 4.5 TCF.
This would not be Noble and Delek’s first deal with Egypt. As Tamar partners they have signed a Memorandum of Understanding (MOU) to export 7 BCM annually of natural gas to the liquefying plant of Spanish company Union Fenosa at Damietta. In addition, the Leviathan partners are in advanced talks with British Gas (BG) to export 7 BCM annually to their liquefying plant in Sinai.
The Tamar partners are also in advanced talks with Dolphinus to immediately supply gas for Egyptian industry by using the pipeline set up by EMG, which formerly imported gas to Israel from Egypt.
This is all excellent news for Israel’s natural gas industry as well as for her foreign currency reserves. Who knows, with the way alliances are shifting throughout the Middle East, Israel might yet become an active member of OPEC!