Israel: Natural Gas Will Exceed Domestic Consumption

The Houston-based explorer Noble Energy Inc., the Israeli Delek Group Ltd. and other explorers have discovered enough gas under the Mediterranean Sea to supply Israel’s needs for 150 years. To profit from the finds sooner, the companies want to export the gas by pipeline or ship. As the Israeli Ministry of Energy prepares to publish a blueprint for developing the fields later this month, officials say the country’s economy and security must come first and shipments abroad should be limited. The companies have discovered about 760 billion cubic meters (28 trillion cubic feet) of gas, which worth about USD 240 billion, equal to Israel’s annual economic output.

Today, Israel imports gas by LNG tanker, but now the Jewish state securing resources for domestic use through 2040 and allowing some exports. The energy industry said it creates uncertainty because gas exports will only be allowed at the government’s discretion.

Noble and Delek have held preliminary talks with South Korea’s Daewoo Shipbuilding & Marine Engineering Co. and Russia’s OAO Gazprom about building a floating LNG unit. Critics expressed their concern that such a facility could be vulnerable to an attack.

Giant Gazprom, which supplies about a quarter of gas consumed in Europe, signed a preliminary deal in March to buy gas from Levant LNG Marketing Corp., set up to sell the fuel from the Tamar and Dalit fields using a floating LNG plant. The duration of the deal is estimated to be for some 15-20 years and its value seems to be in the range of 12-15 billion dollars.

Export proposals also include building a pipeline all the way to Greece or combining the gas from discoveries off Cyprus and Israel at a joint LNG plant as soon as 2018. Another option is to build a plant in Jordan to ship the fuel to Asia through the Red Sea. Critics have observed that the pipeline to Greece is so expensive it won’t be economically viable. In any case, the Mediterranean gas discoveries have changed not only the Israeli energy scene but the perspectives of the whole economy, and of course of its fertilizer industry.

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