Israel to Sell Gas from the Tamar Field to Jordan
Israel's Prime Minister and Minister of Energy approved gas exports from the Tamar field to Israel's immediate neighbour, Jordan.
Since its discovery of substantial amounts of natural gas in the Tamar and Leviathan fields holding respectively 10 and 22 trillion cubic feet of gas, Israel has been studying various export options to monetise its offshore resources. Talks to ship a total gross quantity of 66 billion cubic feet from Israel's offshore field to Jordanian companies Arab Potash and Jordan Bromine led to an agreement signed in 2014. A final deal was pending relevant regulatory approvals from both countries.
Like Israel, Jordan suffered heavily from the disruption in the flow of Egyptian gas. Egypt was historically the main natural gas supplier to both Israel and Jordan before severe attacks to the Arab Gas Pipeline in 2011 stopped the gas from being delivered. Jordan has been undergoing a severe energy crisis as the Kingdom was forced to import expensive fuels to make up for the shortfall. Importing gas from Israel would bring significant relief to Jordan's spiking energy bill. The deal has however received the opposition of the Jordanian public sensitive to any dealing with the Israeli neighbour.
Egypt is also a potential customer for Israeli gas. A flat natural gas production, a growing consumption and ongoing export obligations have turned the once net natural gas exporter into an importer of the hydrocarbon. Egypt is currently in talks with Israel and Cyprus to import natural gas via pipeline. Egypt's underused export terminals could also allow Israel and Cyprus to reach far-reaching customers.
Israel has been facing internal challenges at home. A dispute between the Antitrust Authority and the partners to the Tamar field Noble and Delek is still pending and threatening regional deals. Israel's competition regulator accused Delek and Noble of constituting a cartel and distorting the market. The outcome of the dispute will be key in deciding Israel's successful entry into the export market and its standing as an Eastern Mediterranean energy hub.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. She holds an LLM in Commercial Law from City University London and a Bachelor of Laws from Université Saint Joseph in Beirut. Email Karen karen@minoils.com Follow her on Twitter: @karenayat