Steinitz, energy companies reach deal on natural gas

Energy Minister Yuval Steinitz and representatives from the companies developing Israel’s offshore natural gas fields have reached a new agreement, Israeli media reported Wednesday night.

Talks between the two sides were renewed Wednesday afternoon, a day after US officials from Noble Energy were said to have left the country without finalizing a deal.

“If there are no last-minute setbacks, the revised agreement… will be reviewed Thursday and will be brought for government approval on Sunday,” Steinitz’s office said in a statement.

Under the agreed terms, Israel’s Delek Group owned by Yitzhak Tshuva will sell its holdings in the Tamar, Karish and Tanin gas fields within six years and Noble Energy will gradually reduce its holdings in Tamar to no more than 25% within that same time frame. During these six years, prices for natural gas will be regulated. The companies also agreed to begin developing Leviathan, Israel’s largest gas field, by 2019, Ynet reported.

The sides also agreed that while the government will be bound to the agreement for ten years, the Knesset will not be, and may vote on changes to it in the future.

On Tuesday, Steinitz said the energy companies “presented demands that we can’t accept,” primarily on the issue of an Israeli guarantee of “regulatory stability.” Any terms reached under the new framework being advanced by Prime Minister Benjamin Netanyahu must not change for at least a decade, the companies had demanded.

“Development of the gas reserves is of critical economic and strategic importance to Israel,” Steinitz said on Tuesday

Israel Radio reported Tuesday that Kulanu party member MK Rachel Azaria said she would oppose the current gas plan if it doesn’t include direct price controls, a cut in the volume of gas permitted for export, and the laying of a second pipeline to the Tamar field.

Azaria sits on the powerful Knesset Finance Committee, which must approve aspects of the deal.

Kulanu party leader Finance Minister Moshe Kahlon has also said in recent days that he would oppose the deal if it didn’t include more stringent price controls.

Critics of the gas deal, which effectively secures the Noble-Delek duopoly for as long as 15 years in exchange for the companies developing the fields, say it amounts to “robbery” of Israel’s natural resources and urge stronger regulation and greater transparency in the agreement.