HAIFA – Israel’s energy minister said on Wednesday that more of the country’s natural gas reserves should be earmarked for export, amid renewed interest in offshore exploration and an ongoing debate on whether the gas should be kept for domestic use.
Israeli Minister of Energy and Infrastructure Yisrael Katz sent a scathing letter to the Minister of Finance, Bezalel Smotrich, criticising the latter’s failure to promote natural gas exports to Egypt and Europe, Sama news agency reported citing Israeli media reports.
Within the next two weeks, Energy Minister Katz is expected to approve an increase in gas exports to Europe, Egypt and Jordan.
Finance Ministry officials have no authority in this matter, and it is appropriate that they deal with the areas they are responsible for, Katz wrote.
A source at the Ministry of Finance said that without a new policy and without a professional committee to discuss the issue of increasing natural gas exports and its repercussions on the economy, the economy may be damaged.
Sources close to the minister of energy claimed that the orders to increase exports, which are expected to be signed in the coming weeks, are in line with the previously approved export policy as the law stipulates that the policy-making committee must meet every five years.
The Ministry of Energy is working to form a committee to examine the natural gas export policy.
About 3.5 years after the start of production from Leviathan, the partners started exploring FLNG facility options, because the liquefaction process, makes it possible to transport gas by ship to Europe and Asia and thus increase revenue, in contrast to the current situation where Israel only transports gas to Jordan and Egypt through pipelines or bases itself on Egyptian liquefaction facilities. The FLNG facility would allow Leviathan to produce 7 BCM per year for 20 years – equivalent, for example, to the volume of gas supplied to Egypt today.
The likelihood of discovering more gas in Israel is high
Natural gas enhances Israel’s regional status, but not only. The increase in exports could also directly enhance the status of Prime Minister Benjamin Netanyahu and Minister of Energy and Infrastructure Israel Katz in particular. With the problematic relationship between Netanyahu and US President Joe Biden, Netanyahu is looking for creative ways to get closer to Saudi Arabia that would expand the Abraham Accords. One of the people closest to Egypt’s President al-Sisi is UAE leader Mohamed bin Zayed, who until recently was a close friend of Saudi Crown Prince Mohammed bin Salman. Netanyahu would have been happy for Emirati assistance in moving closer to Riyadh, but recently there has been tension between bin Zayed and bin Salman on issues, including OPEC oil production policy and the civil war in Yemen.
At the same time, Israel Katz and Minister of Foreign Affairs will swap jobs in December for two years, and it is likely that in the run-up to this change, Katz will want to build trust with Abbas Kamal, who is interested in increasing exports Therefore Katz is expected to change Israel’s gas export policy which has been in place since 2018 by increasing exports.
This decision is not only of great importance to the Leviathan and Tamar partners, but also other companies. Last week, the submission phase of the fourth competitive procedure for natural gas exploration in Israel’s economic waters ended. Of the nine companies that approached, five were new, among them BP and the Azerbaijani SOCAR. Without certain knowledge that finding gas would allow exports, companies will not want to search for gas in Israel – even though the probability of finding it is relatively high compared with other places.
The Ministry of Energy and Infrastructure said, “The Ministry of Energy and Infrastructure is in the process of examining requests for additional exports of natural gas, as stated in the government’s decisions and the minister’s policy. These decisions will take into account first and foremost the needs of the local economy, alongside economic and geopolitical considerations.”
