Israel: Gas Boom Hampered by Export Problems, Report Says

Israel: Gas Boom Hampered by Export Problems, Report Says

The discovery of huge reserves of gas will make Israel – a country once entirely dependent on imported fuel – self-sufficient in electricity production for the first time since its creation in 1948.

And the offshore gas fields could make the state a major player in the Mediterranean gas market, writes World Review author and energy economist Dr Carole Nakhle, University of Surrey, UK. But the increasing isolation of Israel in the Middle East may hamper any export potential.

Israel has been discovering gas in its waters since 1999. But the discoveries that substantially altered its energy outlook include: the Mari-B field (30 billion cubic metres – bcm); Tanin (31 bcm); Tamar (246 bcm); and Leviathan (480 bcm). Mari-B is now nearly depleted. Over the next 10 years, Tamar is expected to supply between 50 and 80 per cent of Israel’s gas consumption needs.

Israel will produce enough gas for its domestic market, and in theory, have enough surplus to export to foreign markets.

“However, the export potential is fraught with problems given the complex political make-up of the region,” she says.

“If Israel had a ‘normal’ relationship with its neighbours, an efficient option would have been to connect to the existing network of pipeline, sell the gas regionally and send the rest to Turkey and from there reach out to the European customer.”

“But because of the prevailing political climate, other more expensive and complex options such as an offshore floating liquified natural gas terminal (FLNG) need to be considered.”

The dispute with Lebanon over maritime boundaries is ongoing. The civil war in Syria shows no signs of abating and there is the added problem of potential spill-over to neighbouring countries.

Furthermore, the relationship between Israel and Turkey has been tense. Turkey opposes any hydrocarbon-related deal between Israel and Greek Cyprus until a settlement with Northern Cyprus is reached.

“Many would argue that Israel is not, politically, an attractive destination for international oil and gas capital.”


LNG World News Staff, June 21, 2013; Image: World Review