Israel's Natural Gas Challenges

Simon HENDERSON*        The Washington Institute    PolicyWatch 1978

A top-level Israeli government committee has produced a blueprint for exploitation of substantial natural gas reserves, but solutions must still be devised for a range of technical, commercial, and political problems.

In October 2011, following the discovery of large quantities of natural gas off Israel's Mediterranean coast, Prime Minister Binyamin Netanyahu appointed an interministerial committee to formulate policies for development of the new resources. Last week, the so-called Zemach Committee -- after chair Shaul Zemach, director-general of the Ministry of Energy and Water -- offered its recommendations. The panel's mandate was to offer suggestions on ensuring Israel's energy security, facilitating competition in its emerging domestic natural gas market, leveraging the environmental benefits of natural gas compared with other fuels, and maximizing the economic and political benefits.

BACKGROUND

Natural gas was first found in Israel's waters in 1999, when the Noa field was discovered off the coast of Ashdod. It was judged too small for commercial development, but in 2000, the Mari-B field was found nearby and has been supplying gas to Israeli power plants since 2004. In addition, Egypt began exporting gas to Israel in 2008, though it canceled that contract earlier this year after the pipeline was repeatedly sabotaged in Sinai. In January 2009, the Tamar field was discovered eighty miles off Haifa, with enough gas to supply Israel's domestic needs for fifteen years. And in December 2010, an even larger discovery was made in the Leviathan field west of Tamar. Although its full size has yet to be confirmed by further exploratory drilling, the finding led Israel to begin seeing itself as a significant gas exporter. Further small gas fields have since been discovered.

Kurdish oil trade with Turkey rising, more to come

REUTERS - Iraq    by Pec Mackey


Kurdistan is taking its first steps towards gaining independence from Baghdad in the sale of its oil and gas with a convoy of trucks taking the condensate liquid fuel bi-products of a remote gas field directly into Turkey.

At least 15 trucks a day are loading up with high quality condensate at Khor Mor's gas plant and then trundling down a bumpy road to start the two-day journey to Mersin on the Turkish Mediterranean.
In return, Turkey is trucking back small quantities of diesel fuel and kerosene to use in the autonomous region's power plants.

"It's a very simple but symbolic start to direct oil trade between the Kurdistan Regional Government (KRG) and Turkey - and there will be more to come," said an official familiar with the barter-type operation between private companies.

"Neither side is thinking about stopping."

But Baghdad wants them to. It believes Iraq's central government has the sole right to export oil and gas produced throughout Iraq and says deliveries by truck from Kurdistan across the border into Turkey are illegal.

Ankara is meanwhile encouraging the swap, which kicked off with five tankers in July. And Turkish Energy Minister Taner Yildiz says the volume could gradually build up to 200 trucks a day - roughly 40,000 barrels per day (bpd).