Middle East Forum: Will Egypt's Zohr Gas Field Sink Israel's Leviathan?

The discovery of the Italian energy company ENI of a giant gas field off the coast of Egypt has transformed the East Mediterranean energy play overnight. The newly discovered field called Zohr could hold a potential of 30 trillion cubic feet of gas – the largest discovery in the region, thirty percent larger than the Israeli Leviathan field, which held the title until today.

Zohr's entry into the scene is a true game changer. It delivers a painful blow to both the Israeli and Cypriot economies, and more specifically to the gas partners, Delek Drilling and Noble Energy, which until now have held the only discoveries in the region: Tamar, Leviathan, Karish, and Tanin in Israel and Aphrodite in Cyprus. The finding will essentially annul the MOUs Israel and Cyprus recently signed with Egypt to supply gas to the domestic Egyptian market.

It will also kill any near-term hope for Israeli and Cypriot gas to feed the two idle LNG terminals in Egypt, which are craving for gas supply. Much shallower than Leviathan, Zohr would be easier to develop, and ENI, which has been operating in Egypt for decades, is not likely to face any of the regulatory obstacles Noble and Delek have faced in Israel. ENI believes it can begin to develop the field as early as next year whereas the current timing for the development of Leviathan is still unknown. MORE