Landau: New Ashkelon plant to run on gas

By RON FRIEDMAN
June 8, 2010 13:26

Tshuva opposes higher royalties, "you can't change rules in mid-game."

2 minute read.



Landau: New Ashkelon plant to run on gas

natural gas rig 248.88. (photo credit: Courtesy)

National Infrastructures Minister Uzi Landau (Israel Beiteinu) held a celebratory toast with leaders of the natural- gas industry in Tel Aviv on Monday, to congratulate them on discovering what appears to be a massive natural-gas deposit at the Leviathan site off Israel’s coast.

“I want to congratulate [Delek Energy owner] Yitzhak Tshuva and the people of Noble Energy,” Landau said. “Assuming that the gas deposits that were found prove to be correct, we are talking about a geopolitical breakthrough. Israel may become a gas exporter. This is an issue with important political ramifications.”

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“If Israel becomes an exporter of natural gas to southern Europe, Europe will become less dependent on North Africa, strengthening Israel’s position with the Europeans,” he said.

In light of the recent encouraging seismic survey, the National Infrastructures Ministry and Israel Electric were reconsidering their plans for a coal-operated power plant in Ashkelon and would make it suitable for processing natural gas, too, Landau said. The plant would operate on gas and only switch to coal if problems arose, he said.

Delek Energy and Noble Energy jointly own the drilling rights for the Leviathan deposit, which is said to have 453 billion cubic meters of natural gas

“With great satisfaction, we have transformed Israel into a powerful player in the international energy market,” Tshuva said. “Israel will gain economic security and political clout.”

“We will continue to strengthen Israel’s infrastructures and become an international force,” he said. “Already many countries have approached us with requests to provide them with energy.”

Regarding the issue of state royalties, which the Finance Ministry recently suggested be increased from the existing rate of 12.5 percent, Tshuva said: “More than 100,000 investors put money into searching for gas in Israel and off its shores. Five hundred of them were dry, translating into billions going down the drain. Did anyone reimburse them?”

Logic demanded that those who had taken the risks should enjoy the fruits of their labor, he said, adding that Israel was not Cuba.

“If you want to change the rules of the game, do it for future projects, not for existing ones,” Tshuva said.

Landau said the investors were entitled to benefit from having risked their money.

“The moment we signed agreements with the investors, we agreed to certain royalties and we have to honor the agreement,” he said.

“Rights that were given and finds that were discovered, including Leviathan, should be credited to the discoverers,” he added. “True, the people of Israel deserve to benefit from Israel’s natural resources, but it only possesses those resources because entrepreneurs went out and looked for them and invested a lot of money in finding them. We have to keep an incentive in place so that people continue searching here.”

Landau’s spokesman denied media reports that the ministry had demanded that Delek and Noble return 10 natural-gas drilling licenses.National Infrastructures Minister Uzi Landau (Israel Beiteinu) held a celebratory toast with leaders of the natural- gas industry in Tel Aviv on Monday, to congratulate them on discovering what appears to be a massive natural-gas deposit at the Leviathan site off Israel’s coast.


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