Now that the government has cemented its decision to export much of the nation’s
offshore natural gas, the country’s leaders must take care to diversify the
modes of export chosen, an industry expert told The Jerusalem Post.
trying to convince the parties that indeed they should not put all [Israel’s]
export eggs in one basket,” Dr.
Amit Mor, CEO of the Herzliya
Pituah-based financial and strategic consulting firm Eco Energy, said on
The cabinet decided on June 23 that 540 billion cubic meters of
Israel’s eastern Mediterranean natural gas must be kept at home, limiting export
quantities to 40 percent of the estimate reserves. The High Court of Justice
upheld this determination on October 21, after opposition leader Shelly
Yacimovich and other colleagues filed a petition demanding that a decision of
such financial and social magnitude should be made by the Knesset.
still needs to decide how and to where it will export its gas. To discuss this,
Mor will preside over the Israel Energy and Business Convention 2013 this
Tuesday and Wednesday at the Kfar Hamaccabiah convention center in Ramat
“What I’m trying to do is put on the stage, bring to the audience,
the participants, the full story as possible – from the upstream, the dilemmas
and the various options to exports,” Mor said.
While Mor recommends that
the government choose a combination of several export options, he says there are
just a few viable choices.
One of the most economically beneficial
options would be exporting to Turkey, either through a pipeline or through
compressed natural gas (CNG) tankers, he explained.
Israel would find a
“thriving Turkish market,” in which the demand for gas is expected to jump from
42 b.cu.m. annually in 2012 to 60 b.cu.m. in 2020, Mor said. Turkey aims to
decrease its dependency on Russian gas, and is already importing gas from Iran,
with plans to increase imports from Azerbaijan and begin receiving the resource
from Turkmenistan, he added.
“There is a major will [to import Israel
gas] on behalf of the Turkish private sector,” members of which are already
negotiating with Israel’s Leviathan reservoir partners, Mor said.
problem in this project is of course political,” he said.
Turkey would use Israeli gas solely to meet its domestic needs, Mor
Later, gas could go through Turkey to Europe, after completion of
the Trans-Anatolian Pipeline – running from Azerbaijan through Turkey to Europe,
and the Trans-Adriatic Pipeline – slated to connect to the Trans-Anatolian
Pipeline and go through Greece, Albania, the Adriatic Sea and then to
The Trans-Adriatic Pipeline should be delivering gas to southern
Europe by the end of the decade, Mor said.
Another idea is to run a
pipeline from Israel’s Leviathan reservoir, 130 km.
west of Haifa, to the
southern coast of Cyprus, where the Cypriot government plans to build a plant to
generate liquefied natural gas. This would be relatively simple, as Houston-
based Noble Energy operates drilling sites in the exclusive economic zones of
both Israel and Cyprus, Mor explained.
The inclusion of Israeli gas in
the LNG facility would help justify the construction of the project for the
Cypriot government, as the island nation does not have enough gas of its own to
do so, he continued.
From Cyprus, Israeli LNG could be exported to Asian
countries, such as China and India.
A third export option for Israel is
the Floating LNG (FLNG) system, the first example of which Royal Dutch Shell is
developing off Australia. In small, densely populated countries such as Israel,
the FLNG option could satisfy members of the “not in my backyard” (“NIMBY”)
camp, who would oppose having an onshore LNG processing facility, Mor
“It’s a new technology, but the Israeli project would not be
the first,” Mor said, stressing that production costs at offshore LNG facilities
will be competitive with those onshore.
“Although there is a need to
protect offshore facilities, the advantage here is that we reduce the political
risk,” he continued. “The advantage is that there is no need for any bilateral
Yet a fourth export option for Israel is to export gas
through onshore pipelines in the region, in Jordan, Egypt and the Palestinian
“Jordan suffered a lot from its dependency on Egyptian gas,
which was interrupted [by terrorists in Sinai],” Mor said.
that Jordan is experiencing a “major economic crisis” and has switched to using
fuel oil and diesel, at an additional cost of billions of dollars, he said that
pipelines could be constructed to bring gas from the Israeli Tamar and Leviathan
reservoirs to Jordan within three years.
“This could be very beneficial
to Jordan, because the Israeli gas price is relatively low,” Mor said. “The
problem here is again geopolitical in nature. A decision by King Abdullah is
Israel will likely supply small amounts of gas to the PA for
two natural gas-based power plants that are being planned in the West Bank, Mor
The most economical regional solution would be to supply natural
gas to Egypt by reversing the flow in the existing infrastructure, according to
Mor. Egypt has developed a severe natural gas shortage despite its huge
reservoirs, because foreign companies are not investing in exploration there, he
explained. Meanwhile, the country’s two LNG liquefaction plants sit
As for which of the export options Israel will choose, Mor said
that he is confident that the government “will respond to the request of the
“The exporting of natural gas from Israel in the east
Mediterranean can enhance stability in the region and might bring economic and
political cooperation between rivals for the benefit of the people in the
region,” he said.