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Israel Weighs Natural Gas Suitors

Israel Gas

Israel is already drilling for natural gas offshore in the Mediterranean, but in the coming years it is expected to ramp up production of the more than 40 trillion cubic feet (tcf) of natural gas in the region’s Levant basin. So is Cyprus, which discovered its own field in 2011 with an estimated 7 tcf of technically recoverable natural gas, though it isn’t expected to hit commercial production until 2017. Israel lays claim to the lion’s share of the basin’s hydrocarbons, with 9 different fields containing over 33 tcf. The biggest offshore play, appropriately named the Leviathan, contains a whopping 18 tcf.

Israel has indicated that it will keep approximately three-fifths of the offshore gas for domestic use—enough to meet the country’s gas needs for the next two decades. But the big question is what it will do with the remaining gas. Cyprus is already working on building a liquefied natural gas (LNG) export terminal, and has invited Israel to send its gas to the island nation for the expensive liquefaction process. Israel hasn’t seemed too keen on that idea, and as the Energy Information Administration (EIA) reports, is eying three other options:

  A new pipeline from the eastern Mediterranean to Crete (where the volumes could flow into the European grid)

  A new pipeline from the eastern Mediterranean to Turkey

  Use of existing infrastructure to send volumes to Egypt for export via its LNG facilities

Given its reluctance to send its gas to a Cypriot LNG terminal, it’s hard to imagine Israel choosing an increasingly unstable Egypt as a partner. That leaves pipelines, either through Turkey or the Mediterranean. The over-land route is the cheaper option, but while a pipeline would be beneficial for both countries, some big sticking points remain.

Israel still has time to figure out which option to choose; the Leviathan field won’t be fully operational for another three years. A lot can happen in that time, but with Jews the scapegoat du jour in Ankara these days, a gas pipeline could be just the thing to warm Israel-Turkey relations.

[Israeli natural gas rig image courtesy of Albatross via Getty Images]

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  • Jacksonian_Libertarian

    It’s obvious that Israel is going to build their own gas liquefaction plant.
    There are strategic problems with all the other solutions, you don’t give potential enemies the power to shut off or steal your exports, with the turning of a valve.

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