Israeli Prime Minister Signs Landmark Gas Deal

JERUSALEM, Dec 17 After years of political infighting, Israeli Prime Minister Benjamin Netanyahu signed a deal on Thursday giving long-awaited approval for the development of the Leviathan natural gas field off Israel’s coast.

Thousands have staged street protests against the agreement which they said amounted to a “gift” for the consortium.

Committee spokesman LiorRotem told AFP the vote was against Netanyahu’s plan to bypass usual antitrust oversight, on the grounds of diplomatic and security needs.

Israel’s monopolies commission has warned the agreement could give Noble and its Israeli partner Delek an effective monopoly. The companies agreed to sell some of their other assets as part of the deal. As minister of the economy, the prime minister officially invoked Antitrust law’s Clause 52 which allows him to approve a monopoly if it serves a national foreign or security interest.

Economy Minister Aryeh Deri resigned in November after refusing to overrule the anti-trust authorities. This is in order to supply gas from the Leviathan Field to customers in the Israeli market, to NEPCO in Jordan, customers in Egypt (mainly BG) and to the Palestinian Authority, in accordance with the letters of intent signed to date, the company said.

While extraction has begun in Tamar, the far larger Leviathan has been hit by a series of delays.

Earlier this week, the Delek Group confirmed the development for the Leviathan Field, which is meant to produce and handle a maximum daily output of natural gas of approximately 1.6-1.8 Bcf (maximum of 16 – 18 Bcm per annum) using various engineering alternatives.

Noble and Delek also control the Tamar field, which holds 250 bcm of natural gas, and lies 80 kilometres (40 nautical miles) west of the Israeli port of Haifa.

The consortium is already developing the Tamar offshore reserve, which is in production, but has held off proceeding with the much larger Leviathan site in the eastern Mediterranean Sea until the regulatory uncertainty regarding the project was clarified.

Sharply lower oil prices have slashed capital investments by global energy and exploration firms, and other liquefied natural gas projects are set to come online in the next three to five years, which could lead to an oversupply. Its failure to do so would allow the government to back out of a commitment not to alter fiscal and regulatory terms for the gas industry until 2025.

https://waltonian.com/2015/12/israeli-prime-minister-signs-landmark-gas-deal/