Israeli natural gas suppliers are closing in on a multi-billion dollar deal with Jordan, signing a letter of intent this week. The Wall Street Journal reports that the deal is said to be worth $15 billion:
The Israeli companies said they would supply 45 billion cubic meters of gas over 15 years from the offshore Leviathan field to Jordan’s state-owned National Electric Power Co. […]For Israel, the deal will help build its credentials as an energy supplier after making some significant gas discoveries off the Mediterranean coast in recent years. The Leviathan field, which was discovered in 2010, is estimated to contain about 22 trillion cubic feet of gas, enough to meet all of Israel’s gas demand for about 100 years. Production is expected to start later this decade, and Israel hopes to export most of its output.
And Egypt might not be far behind in benefiting from Israel’s bounty:
The Leviathan partners have already signed a nonbinding agreement with BG GroupBG.LN +0.04% PLC to supply its natural-gas facility in Egypt, while the operators of Israel’s Tamar field, the country’s other large gas reserve, have signed separate deals to supply companies in Jordan and Egypt. Many of these deals are still to be completed, pending regulatory and government approval.
As evidence of the extent of Israel’s underwater gas reserves has emerged over the last few years, we have begun to foresee a future in which the historically oil-poor Jewish state becomes an energy giant—and gains the geopolitical clout that goes with the role.The deal is another sign of the tacit Sunni Arab-Israeli alignment, as a chaotic geopolitical moment makes for strange bedfellows. Both the Sunni states and Israel now find themselves facing the same regional threats—the growth of jihadism, the destabilization of Syria and Iraq, and an ambitious Iran. The promise of Israel’s gas reserves only makes that alignment more profitable.