Israel approves expansion of natural gas exports to Egypt from Tamar field

Energy Minister Israel Katz says additional natural gas exports will boost state revenue and improve ties with Egypt, while domestic energy needs will not be affected

Sharon Wrobel is a tech reporter for The Times of Israel.

Illustrative: The Tamar gas field. (NewMed Energy/Delek Drilling)
Illustrative: The Tamar gas field. (NewMed Energy/Delek Drilling)

Israel on Wednesday gave approval for the expansion of natural gas exports to Egypt from the Tamar reservoir off the country’s Mediterranean coast.

“The step will increase the state’s revenues and strengthen the diplomatic relationship between Israel and Egypt,” said Energy Minister Israel Katz.

Katz said he authorized the expansion of gas exports to Egypt from the Tamar reservoir following the recommendation by Petroleum Commissioner Chen Bar Yosef and after ensuring that the supply of gas to the Israeli economy is guaranteed and meets the country’s energy security needs.

Katz signed a permit to allow for additional natural gas exports of about 3.5 billion cubic meters (bcm) annually over the next 11 years from the Tamar gas reservoir located some 90 kilometers (55 miles) west of Haifa in northern Israel. About one-third of the additional natural gas produced from the Tamar rig will be allocated to the domestic market, according to the ministry.

Overall, natural gas production from the Tamar field from 2026 will increase by 60%, or 6 bcm annually.

US energy giant Chevron operates and holds a 25% stake in the Tamar gas field. Other partners in the Israeli gas reservoir include Isramco, which holds 28.75% of the rights in Tamar; Abu Dhabi’s Mubadala Energy, which holds 22%; Tamar Petroleum, which holds 16.75%; Dor Gas with 4%; and Everest with 3.5%.

Both Israel and Egypt have emerged as gas exporters following major offshore discoveries over the past 15 years, as Europe is determined to wean itself off dependence on Russian gas imports, while domestic demand for energy supply has been growing.

Energy Minister Israel Katz signs off on the expansion of natural gas exports to Egypt, August 23, 2023 (via Twitter)

In Israel, growing domestic energy needs have sparked heated discussions over the allowance of natural gas exports. Back in June, Israel’s budget director, Yogev Gardos, said there was an “immediate need for the examination” of export policy and warned that exporting too much “could endanger Israel’s energy security” and lead to higher electricity prices, according to a letter he sent to the Energy Ministry’s director-general.

Israel’s natural gas operations have in recent years put the country on a path to energy independence — and have shielded it from the worst of the energy crisis sparked by the Russian war on Ukraine — in a region with few natural resources.

The Leviathan natural gas field, the nation’s largest, started pumping on December 31, 2019, after natural gas started to flow in 2013 at the nearby Tamar, the second largest, which holds some 10 trillion cubic feet (tcf) of natural gas, half of the amount held in Leviathan.

Israel has been exporting gas from the Tamar field to Jordan since January 2017, and the Leviathan field started exports to Egypt in January 2020. The Leviathan deals are considered to be bigger and more significant for the economy.

In June 2022, Israel, Egypt and the European Union signed a memorandum of understanding that will see Israel export its natural gas to the bloc for the first time. According to the agreement, Israeli gas will be supplied via Egypt’s liquefied natural gas (LNG) plants to the EU.

Chevron last year signed a memorandum of understanding with state-owned Egyptian Gas Holding Company (EGAS) to explore cooperation on the transport, import, liquefication and export of natural gas from the East Mediterranean to Egypt.

Earlier this month, Katz visited visited the Leviathan natural gas production platform expressing his intention to support more natural gas exports.

“Everyone in the region and the world are interested in contacts with Israel because of the natural gas,” said Katz. “Our ability to export natural gas in a controlled way constitutes a powerful geopolitical instrument which bolsters the State of Israel’s status in the region and the world.”

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