John Reed Financial Times
A leading investor in Israel’s natural gas sector said initial talks were under way on exporting some of the country’s abundant offshore reserves to Turkey, Jordan, Egypt, and a proposed power plant in the West Bank.
Yossi Abu, chief executive of Delek Drilling, said the sector was poised to take part in a “new geopolitical opportunity” and was looking at possibilities to export gas via pipelines from offshore fields such as the big, unexploited Leviathan reserve to Israel’s regional neighbours and possibly – via Turkey – to Europe.
“There is a significant commercial basis to supply gas from Leviathan and other discoveries offshore Israel to Turkey, Jordan, the Palestinian Authority, and even Egypt,” Mr Abu told the Financial Times in an interview.
He added: “We have discussions – I cannot give you names – with potential customers in our region.”
Mr Abu’s remarks add weight to those from Israeli, Turkish and other government and private-sector figures recently, suggesting that talks on regional gas projects that would re-shape the Middle Eastern energy map are advancing quickly.
Israel apologised to Turkey last month for a fatal 2010 storming of a boat off Gaza, and the political rapprochement has raised the prospect of a thaw in trading relations between two of the Middle East’s biggest economies.
“We believe that there is a real opportunity to supply gas to the Turkish market, and maybe through the Turkish market to the European market,” Mr Abu said. “Also, there’s a real opportunity to supply gas to Jordan.”
A potential pipeline to Turkey might go undersea via Cypriot waters, he said, and would not need to pass through Syrian or Lebanese territory. A pipeline to Jordan would require “a very modest investment [in] a few kilometres of on-shore pipeline,” he added.
The talks with the Palestinian Authority concerned a private project for a gas-fired plant planned in the northern West Bank city of Jenin, Mr Abu said. The Palestinian Authority currently gets its power from the state-owned Israel Electric Corporation, but “both sides would benefit” from independent power projects, he said.
Mr Abu declined to discuss potential gas projects with Egypt, but said that the existing pipeline for natural gas from that country – which has been sabotaged frequently since the Arab Spring revolts – might in future pump gas from Israel in the opposite direction.
Mr Abu said that commercial considerations were driving the talks, not geopolitics, but added: “Obviously the government is taking part to encourage the development of relations with our neighbours.”
He paid tribute to Silvan Shalom, the new energy minister in Benjamin Netanyahu’s government, whom he said had “vast experience” as a former minister of foreign affairs and finance. “We are taking this as a serious opportunity,” he said.
Israel began gas production at the $3bn Tamar offshore field last month. Delek and Noble are waiting for a decision by the cabinet on gas exports, and a decision by Israel’s competition watchdog, which is examining a complaint that the two companies between them control too much of the sector, before moving ahead with plans to develop Leviathan.
Delek Drilling and Avner Oil Exploration, both owned by Israel’s Delek Group, own 31.25 per cent of Tamar and 45.3 per cent of Leviathan.