Cabinet approves Levianthan gas deal

By
May 22, 2016 15:31

During the weekly cabinet meeting, Prime Minister Benjamin Netanyahu said that the new outline "incorporates the comments that we received from the High Court."

2 minute read.



Hadera

A man points as he stands on a tanker carrying liquified natural gas, ten miles off the coast from Hadera. (photo credit:REUTERS)

Ministers on Sunday approved a revised version of the Leviathan natural gas outline on Sunday, which will allow future governments to have input in the natural gas policy.

“The important thing now is not to delay,” Prime Minister Benjamin Netanyahu said during the weekly cabinet meeting, calling approval of the plan “a very important – even historic – step for the Israeli economy and especially the Israeli people.”

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The version rejected by the High Court two months ago had called for a 10-year freeze on the country’s gas prices and regulations, meaning future governments would not be involved.

The consortium developing the 621-billion-cubic-meter offshore Leviathan reservoir has expressed hope that natural gas will begin flowing to consumers by 2019, but representatives have said a plan needed to be approved by the end of this year for that to happen.

The revised natural gas plan first came to light Wednesday after the national Infrastructure, Energy and Water Ministry announced that Noble Energy Inc. and Delek Group Ltd., Leviathan’s two biggest stakeholders, agreed to the revisions during a meeting with Infrastructure, Energy and Water Minister Yuval Steinitz.

Houston-based Noble Energy owns 39.66 percent of Leviathan, while Delek Group subsidiaries Delek Drilling and Avner Oil Exploration – each hold 22.67% and Ratio Oil Exploration has a 15% share.

“After six years of delays, the revised stability clause will not only allow for Leviathan’s development to progress, but will also open up the sea to searches for additional gas fields,” Steinitz said at the meeting.

Later, during a meeting with French Prime Minister Manuel Valls, who is on a three-day visit to Israel, Steinitz called on the French premier to “help encourage French energy companies to take part in natural gas and oil exploration in Israel’s territorial waters.”

Environmental Protection Minister Avi Gabbay, however, was one of several major figures opposed to the updated framework.

“The prices set according to the outline are too high and prevent natural gas from being used [as a means] to cut pollution,” he said.

Gabbay also cited a lack of price protection for consumers as a basis for his opposition.

“This outline gives authority over prices to the gas companies when there is no competition,” he said. “The companies will be able to raise prices and still receive government compensation if regulations change.”

Mor Gilboa, CEO of student environmental group Green Course, said Netanyahu and his government approved the plan “for the good of the tycoons” while hurting “the Israeli economy and our future.”

“Extremists have taken over the Israeli government,” she said. “They are dictating the country’s environmental, social and economic policy.”

Despite the cabinet’s approval, if another petition is filed to the Supreme Court, the gas deal will be up for judgment once again, according to a spokeswoman for Steinitz.

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