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As the prospects of another war in the Middle East increase, one country is looking to cut its energy ties with the region and manage its own needs, thanks to newly discovered gas riches.
Indeed, the recent discovery that Israel’s offshore natural gas reserves are far larger than previously thought has the potential to revolutionize the country’s economic fortunes. The find could save Israel tens of billions of dollars in energy imports from Egypt and other places, and see it positioned as a new natural gas source for Europe, one of the world’s largest LNG markets.
According to the U.S. Geological Survey, recoverable natural gas in the Levant Basin located in Israeli and Cypriot waters of the eastern Mediterranean Sea, amounts to a massive 18.9 trillion cubic feet. One industry CEO called the finding “a once-in-a-decade opportunity.”
The Leviathan Field, 130 kilometres off the Israeli coast and under 5,000 feet of water, is a potential game changer not just for the country’s economy – the third-largest in the Middle East – but in shaping broader regional dynamics.
Houston-based Noble Energy along with Israeli conglomerate Delek Group and subsidiary Avner Oil Exploration are behind the exploitation of the field expected to produce initial volumes of 750 million cubic feet per day when it opens in 2016.
For Israel, a country once with little or no domestic energy resources, natural gas is set to become the beating heart of future energy plans.
Experts say gas from the nearby Tamar field, which opened this year, will meet domestic demand for the next 25 years, acting as Israel’s “safety net” and leaving Leviathan free for export markets.
Israel’s energy minister said in June the Jewish state would keep more than half its estimated natural gas reserves for domestic production and there’s an ongoing national debate over whether the US$300-billion expected to be generated from recovered gas should be exported or used to safeguard the country’s descendants.
The argument for cashing in is a convincing one. This month, Israel signed a memorandum of understanding with Greek Cyprus and Greece to cooperate on energy, binding Israel and Cyprus together over Leviathan, a section of which is located in Cypriot waters. Israel also began talks this week with other regional interests, including Turkey, about constructing a pipeline to pump gas to Europe.
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