The likely discovery of a large natural gas reservoir off Egypt’s shores must serve as a wake-up call for Israel – a reminder that further delays in the sector could cause the economy undue harm, experts warned on Monday.
On Sunday, the Italian energy giant Eni announced that it had identified the Mediterranean’s largest known gas field off the Egyptian coast, the 30 trillion cubic feet (849 billion cubic meter) Zohr field. If the estimates are correct, the Zohr gas field would be significantly larger than Israel’s biggest field, Leviathan, which is approximately 621 b.cu.m.
While Eni company executives celebrated the find as a potential solution for Egypt’s gas needs for decades to come, Israeli officials and energy analysts viewed the discovery through a more cautionary lens.
National Infrastructure, Energy and Water Minister Yuval Steinitz stressed the need to urgently finalize the country’s natural gas compromise outline, to end the freeze that has overtaken the sector at home.
Following the December announcement of outgoing Antitrust Commissioner David Gilo – who completed his term on Monday – that he intended to review whether the market dominance of Delek Group and Noble Energy constituted an illegal “restrictive agreement,” nearly eight months of negotiations among the companies and government officials ensued. Although the cabinet approved a compromise outline two weeks ago, numerous bureaucratic and regulatory hurdles are still preventing the outline from receiving final authorization. As a result, development has yet to begin at the Leviathan and several smaller gas reservoirs.
On Sunday night, Steinitz described Israel as “standing still and taking its time” with the outline, while “the world is changing before our eyes.” Such procrastination, he explained, could impact Israel’s export possibilities.
Among such export opportunities are the possible sales of gas from Israel to Egypt. Last year, the natural gas companies operating in Israel’s waters signed letters of intent for the provision of 71 b.cu.m. of Tamar reservoir gas to Spanish Union Fenosa’s Egyptian liquefied natural gas plant and the supply of 105 b.cu.m. of Leviathan gas to the British Gas LNG plant, also in Egypt. Another letter of intent was signed with Jordan’s National Electric Power Company for the provision of 45 b.cu.m. of gas from the Leviathan reservoir.
“People ignore timetables. Timetables are crucial,” Miki Korner, a private energy consultant and former chief economist for the Natural Gas Authority, told The Jerusalem Post on Monday. Continue reading…