Israel consortium signs ‘historic’ 15-year, $10b gas deal with Jordan

An Israeli gas consortium on Monday signed what Israel called a “historic” $10 billion deal with the Jordan Electric Power Company to supply the Hashemite Kingdom with natural gas for 15 years.

The agreement will provide Jordan with a total of approximately 45 billion cubic meters of gas from the Leviathan offshore gas field, turning Israel into its largest gas supplier.

The Leviathan consortium, which includes the US-based Noble Energy and Israel’s Delek Group, aims to bring the massive Leviathan oilfield online in 2019. The field is thought to contain over 500 billion cubic feet of gas and is expected to transform Israel into a regional energy powerhouse.

Energy Minister Yuval Steinitz (Likud) on Monday praised the deal as “an extremely important national achievement.”

“This is an important milestone in strengthening the ties and strategic partnerships between Israel and Jordan and the entire region,” he said, according to Channel 10.

Delek Drilling CEO Yossi Abu said the deal marked “a historic day,” according to the Hebrew-language NRG website. The agreement “establishes the Leviathan oilfield as a serious player on the energy map,” he said.

“Supplying natural gas to Jordan will enable our neighbors in Jordan to benefit from efficient, clean and cheap energy, just like the citizens of Israel,” he said. “It will contribute to the prosperity of Israel and Jordan and will strengthen ties and active partnerships between the two.”

“The Leviathan consortium will continue to push forward additional deals including with Egypt, Turkey and the Palestinian Authority,” he added.

One of the sticking points of the deal had been who would build the pipeline between the two countries, according to the Financial Times. The 26-kilometer (16 mile) pipeline is expected to cost around $70 million. It was not immediately clear whether the issue was resolved.

In 2014, Israel signed a separate deal with Jordan to supply $500 million worth of gas to the Hashemite Kingdom from the Tamar natural gas field in the Mediterranean.

Leviathan, discovered in 2010, is estimated to hold 18.9 trillion cubic feet (535 billion cubic meters) of natural gas, along with 34.1 million barrels of condensate.

Development of its own energy resources is seen as a major strategic asset for Israel, which has no oil and little water.

Noble-Delek’s proposed deal to develop Leviathan and number of other natural gas reserves discovered offshore Israel in recent years has faced persistent opposition from critics who say the partnership would create a monopoly in the gas market and lead to higher prices for Israeli consumers.

Over the last year, Prime Minister Benjamin Netanyahu has performed political cartwheels to override Knesset and public opposition to the consortium’s proposal before finally pushing an amended deal through the cabinet in May.

Netanyahu touts the gas deal as having the potential to bring would bring energy self-sufficiency and billions of dollars in tax revenues and transform Israel into a regional energy powerhouse.

Israel is reportedly in gas exportation talks with Turkey, Egypt, the Palestinians and the European Union.

Tamar Pileggi and AFP contributed to this report.