Reducing reliance on Russia, Poland considers purchase of Israeli gas

The discovery of more major natural gas fields in Israel since 2009 has transformed the Jewish state from an energy-dependent country into an energy supplier.

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April 29, 2019 18:56
2 minute read.
AN AERIAL VIEW shows a foundation platform of Leviathan natural gas field, in the Mediterranean Sea

AN AERIAL VIEW shows a foundation platform of Leviathan natural gas field, in the Mediterranean Sea, off the coast of Haifa. (photo credit: MARC ISRAEL SELLEM/POOL VIA REUTERS)

 
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Polish state-controlled energy company PGNiG is considering the purchase of Israeli natural gas as it seeks to reduce its dependence on key Russian supplier, Gazprom.

“We want to be the company at the crossroads of North-South and East-West... we need something to the south,” PGNiG chief executive Piotr Wozniak told Reuters last week.

“So we are looking at all those places to the south of Poland very carefully... So yes, we are interested in Israel,” Wozniak said.

PGNiG currently sources over half of the natural gas that it resells from Moscow-headquartered energy giant Gazprom, majority owned by the Russian government, in a 22-year take or pay deal set to expire in 2022.

Polish authorities have declared that they will not extend the deal, with PGNiG accusing Gazprom of abusing its dominant position in the central European and Baltic markets.

Ahead of the conclusion of the Gazprom deal, PGNiG has sought to diversify its gas purchases, increasing imports of liquefied natural gas from Qatar, Norway and the United States. PGNiG is also preparing to supply the Polish market with gas produced on the Norwegian Continental Shelf, via the Baltic Pipe interconnection through the North Sea, Denmark and the Baltic Sea at the end of 2022.

“Our operations still are exposed to the risk of unexpected interruption of supply from the East, as we have already experienced on several occasions,” said Maciej Wozniak, PGNiG’s Vice-President for Commercial Affairs, earlier this year.

“Therefore, our current priority is to build an alternative, long-term portfolio of secure supplies from 2023 onwards, based on market principles and prices.”


Until large discoveries of natural gas were made off Israel’s coastline in recent years, few perceived historically natural resource-poor Israel to be a significant source of energy.

This perception started to change with the discovery of the Noa gas field off the shores of Ashkelon in 1999.

The discovery of more major natural gas fields in Israel since 2009 – including Tamar and Leviathan – has transformed the Jewish state from an energy-dependent country into an energy supplier, both domestically and abroad.

Israel is currently planning to supply former adversaries Jordan and Egypt with natural gas valued at $26 billion and plans to construct a 2,000 km. pipeline to supply Eastern Mediterranean gas to Europe.

In January, seven countries hoping to benefit from the regions newly discovered resources, including Israel, established the Cairo-based Eastern Mediterranean Gas Forum.

Several major energy firms, including American oil and gas giant ExxonMobil, are reportedly considering competing for a new round of offshore exploration rights, the second auction of its kind in Israel, with bids due to be submitted by June 17.

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