Steinitz: Egypt gas find is wake-up call for Israel

Energy minister slams Israel’s procrastination over its own gas deal after discovery of Mediterranean’s largest offshore reserve

An aerial view of the Tamar gas-processing rig off the southern coastal city of Ashkelon, June 23, 2014. (Moshe Shai/Flash90)
An aerial view of the Tamar gas-processing rig off the southern coastal city of Ashkelon, June 23, 2014. (Moshe Shai/Flash90)

The large natural gas field found offshore from Egypt should be a wake-up call for Israel to finalize an agreement on its own sizable reserves in the Mediterranean Sea, Energy Minister Yuval Steinitz said Sunday.

“The discovery of the massive gas field in Egypt is a painful reminder that while Israel sleepwalks and dallies with the final approval for the gas road map, and delays further prospecting, the world is changing in front of us, including ramifications for [Israeli] export options,” Steinitz said, referring to the ongoing regulatory dispute that has stalled the finalizing of the deal.

“We must pass the gas road map and forward the Israeli gas industry,” he said of a cabinet-backed deal to develop Israel’s Tamar and Leviathan reserves, Army Radio reported.

The American Noble Energy and the locally based Delek Group have faced opposition to their proposed deal with the government to develop a number of natural gas reserves discovered offshore Israel in recent years.

Energy Minister Energy Yuval Steinitz attends a Likud faction meeting at the Knesset on July 27, 2015 (Yonatan Sindel/Flash90)
Energy Minister Energy Yuval Steinitz at the Knesset, July 27, 2015 (Yonatan Sindel/Flash90)

The deal has been controversial in Israel, with critics, including former antitrust commissioner David Gilo, fearing the deal’s regulations would overly favor the companies involved.

The high-stakes deal was thrown into the spotlight when Gilo said last year that the Noble-Delek partnership resembled a monopoly, and called for opening Israel’s natural gas market to increased competition.

Prime Minister Benjamin Netanyahu, however, has maintained that the deal would pump billions of shekels into the economy. He pushed the disputed deal between the government and the US-Israeli energy consortium through the cabinet earlier this month.

Italian energy group Eni announced earlier Sunday that it has discovered a “super-giant” natural gas field off Egypt, describing it as the “largest ever” found in the Mediterranean Sea.

Eni said the discovery — made in its Zohr prospect “in the deep waters of Egypt” — could hold a potential 30 trillion cubic feet of gas over an area of 100 square kilometers (38.6 square miles).

Israel’s Leviathan gas field, which is estimated at 16 trillion cubic feet, has so far been thought to be the largest in the Mediterranean.

The Noble-Delek group has been producing gas from the Tamar field off the Israeli coast since 2013, and has also teamed up to develop Leviathan by 2019.

Tamar’s stakeholders signed a contract earlier this year with a private Egyptian concern to sell as much as five billion cubic meters of gas to Egyptian companies over the next three years. This gas will be flowing through an old pipeline that once transported gas in the opposite direction, from Egypt to Israel.

In March, the Wall Street Journal reported that the Egypt government may import natural gas from Israel if its price were low enough and if one of the drilling companies dropped a legal action against the Egyptian government.

Jordan has also signed a $15-billion, 15-year letter of intent to import Israeli natural gas.

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