Cabinet okays ambitious energy plan

Hopes international tender for liquefied natural gas will meet demand for decades.

Ash power station 88 224 (photo credit: Ariel Jerozolimski)
Ash power station 88 224
(photo credit: Ariel Jerozolimski)
The government's socioeconomic cabinet on Wednesday approved a plan for expanding natural gas supplies. It includes an international tender for importing liquefied natural gas, which its proponents say will guarantee the country's energy supply for the next 30 years. "The cabinet's approval is one of the most important decisions the government has taken in years with the aim of securing the country's energy supply in the future," National Infrastructures Minister Binyamin Ben-Eliezer said. "The international tender marks the largest tender in the country's history. It is expected to reach $40 billion, securing the liquefied natural gas supply for a period of up to 30 years." The Infrastructures Ministry's two main goals were providing energy security and energy efficiency, he said, since the country's energy supplies currently are dependent on two providers, Yam Thetis and EMG. "Diversification of natural gas suppliers is a strategic goal of the government's energy policy and will reduce the dependence on current gas suppliers, while boosting competition in the market," said Finance Minister Ronnie Bar-On, who heads the socioeconomic cabinet. Liquefied natural gas, or LNG, is natural gas that has been converted to liquid form for ease of storage or transport. It has been processed to remove either valuable components, such as helium, or impurities, and then is condensed into a liquid at almost atmospheric pressure by cooling it to approximately minus 163 degrees. LNG must be transported by specially designed ships and trucks. It is stored in specially designed tanks and is about 1⁄614 the volume of natural gas at standard temperature and pressure, making it much more cost-efficient to transport over long distances where pipelines do not exist. The publication of the tender for private companies to build a facility for handling LNG on the country's shorelines will enable the import of natural gas in a condensed liquid by ship. Under the terms of the plan, the facility is expected to operate starting in 2015. The cabinet has asked Finance Ministry Accountant-General Shuki Oren to be in charge of the tender. Publication of the tender is expected to be finalized by July 1, 2009. It will be for a BOT contract - build, operate, transfer - in which the winner would build the facility, operate it for a given number of years and then give it to the state. The IDB Group has been mentioned as one of the interested companies for this tender. To find ways to secure energy supply in light of the drastic increase in fuel prices and worldwide shortage of oil supplies, the government has in recent years been focused on the integration of natural gas into the electrical and industrial economy, as an alternative to polluting and expensive fuels such as gasoline and diesel. The socioeconomic cabinet also decided to take a number of steps to implement an energy efficiency policy in an effort to cut rising electricity consumption by at least 20 percent of the expected consumption in 2020. As part of this effort, the cabinet approved the launch of an interministerial committee headed by Ben-Eliezer, which includes Oren, the chairman of the Israel Securities Authority and the directors-general of the Environmental Affairs and Interior ministries. The committee has been charged with presenting its recommendations to the government by the end of June.