Prime Minister Netanyahu to Review Gas Export Quota
Prime Minister Benjamin Netanyahu is working on upping the export quota to allow additional exports from Israel’s 10 trillion cubic feet Tamar field to Egypt’s liquefied natural gas plant. Exporting to Egypt’s export terminal would allow Israeli gas to reach the European market. In 2013, a fierce debate divided the political class and the Israelis alike between those who fought for gas to be reserved for domestic consumption and those who believed exports would generate a healthy inflow of gas revenues and encourage further exploration activities off the Israeli coast. In June 2013, the Israeli cabinet approved to export 40% of Israel’s natural gas reserves and to retain 60% of the discovered gas for domestic use. The decision was contested before the Supreme Court but the appeal was rejected and the High Court of Justice ratified the cabinet decision.
Netanyahu’s efforts to up the export ceiling and review the natural gas framework are motivated by his plan to seal a deal with Spanish Union Fenosa Gas which owns together with Italian ENI a liquefied natural gas plant in Damietta Egypt. The Tamar partners have been engaged in talks with the Spanish company and signed a memorandum of understanding to sell 67.5 billion cubic meters of gas over the next 15 years. Israel’s ambition expands beyond the regional market as it plans to use Egypt’s unused export terminals to access European markets.
Israel is also looking to export gas to neighbouring Jordan undergoing a severe energy crisis. Talks with neighbouring Cyprus are also underway as the two newly gas producing Eastern Mediterranean countries are discussing potential ways to merge export infrastructures including a pipeline to Europe via Greece. The discovery of natural gas fields in the Levant basin is likely to significantly strengthen the energy security of the countries directly involved. Their entry into the export market will however require important efforts to end domestic deadlocks and overcome geopolitical hurdles.
Karen Ayat is an analyst and Associate Partner at Natural Gas Europe focused on energy geopolitics. Karen is also a co-founder of the Lebanese Oil and Gas Initiative (LOGI). 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