Export

 

Israel's gas export policy is based on government decision no. 442 from June 23, 2013, and it's amendments under government decision no. 476 and government decision stating that out of the total amount of natural gas found in the offshore gas fields, 540 BCM (2P+2C, SPE-PRMS) will be secured for the domestic market, while the remaining amount, estimated at about 340 BCM will be available for export to the neighboring countries, Europe and other parts of the world. 

During 2018, an inter-ministerial team re-examined the gas export policy under the above mentioned government decision. The interim recommendations of the 2018 inter-ministerial team include recommendations to set the amount of natural gas secured for the domestic market at about 500 BCM, this does not change the substantial amount of natural gas still available for export. The final recommendations of the 2018 inter-ministerial team are expected to be published in December 2018.


 There are several export agreements that have been signed or being negotiated:

Signed agreements

  • Jordan - Industrial facilities at the Dead Sea (TCQ of 1.9 BCM from Tamar field). Export permit granted in April 2015.
  • Jordan – The National Electric Power Company NEPCO (TCQ of 45 BCM from Leviathan field). Export permit granted in February 2017.
  • Egypt (domestic market)– Dolphinus Holdings Ltd. (TCQ of 64 BCM from Tamar & Leviathan- yet to be approved).

    Other export options:
  • Egypt - LOI with Shell (formerly BG) as a shareholder of the Idku LNG facility (106 BCM from Leviathan).
  • Egypt - LOI with Union Fenosa Gas as a shareholder of the Damietta LNG facility (70 BCM from Tamar).


The Ministry of Energy is engaged in supporting efforts to create export options for offshore natural gas, including building the ambitious "EastMed" pipeline from Israel's and Cyprus's offshore gas fields to Europe (specifically to Italy via Greece), and transporting gas to Egypt's idle liquefied natural gas (LNG) facilities in Damietta and Idku, or for supply to the Egyptian domestic market.


Gas Export Options from Israel Through Pipelines:

ללא רקע מפה2 a4.jpg 

Israel – an East Mediterranean Gas Hub Providing Energy Supply Security to Neighbours, Europe and Global Consumers

Neighbouring countries are already enhancing their energy supply security through the purchase of Israeli gas exports

The gas resources of Israel's economic waters in the East Mediterranean are helping to cement the country as a key regional energy player, with gas exports already underway or agreed with Jordan and Egypt totalling over 110 BCM (3.9 TCF), as shown below.

CountryStart-up YearSourceQuantity, BCM
Jordan2015Tamar2
Jordan2019Leviathan45
Egypt2019Leviathan & Tamar64

 

With these new gas supplies beginning to flow to Jordan and Egypt from Israel, there is a clear potential for additional gas sales in the future to these two countries.

As Egyptians officials declared several times, Egypt's goal is to become a leading regional hub for oil and gas. Although large discoveries were found offshore Egypt, there is still a demand for gas due to the growing domestic market and the available capacity in the two LNG plants of Demietta (7.56 BCM per year) and Idku (10 BCM per year).  

 

Israeli gas exports from the East Mediterranean to Europe are a natural solution to help the EU diversify its energy imports

A subsea pipeline between Israel, Cyprus, Greece and onward to Italy is in the advanced stages of planning, to supply natural gas from the East Mediterranean to markets in Southern Europe.  The Eastern Mediterranean (EastMed) Pipeline Project is anticipated to start offshore in Israeli economic waters and run 1,900 km offshore and onshore to reach the Greek mainland, via Cyprus and Crete, where it will connect with the Poseidon pipeline linking Greece with Italy.

 

Linking the East Mediterranean's Levant Basin Natural Gas Resources with Southern Europe[1]

pipe to europe.png

For the EastMed pipeline system, developers IGI Poseidon (a 50%-50% joint venture between Greece's DEPA S.A. and Italy's Edison S.p.A.) envisage the following pipeline sections:

  • 200 km offshore, from Eastern Mediterranean sources (Israel, Cyprus) to Cyprus;
  • 700 km offshore, connecting Cyprus to the Greek island of Crete;
  • 400 km offshore, from Crete to mainland Greece (Peloponnese); and
  • 600 km onshore, crossing Peloponnese and West Greece, to connect with the planned Poseidon pipeline linking Greece to Oranto in Italy.

While initially set to transport up to 10 BCM p.a. (circa 970 MMCFD) from 2025, the pipeline ultimately will have the capacity to move up to 20 BCM p.a. (circa 1.93 BCFD) of natural gas.

Pre-FEED studies for the pipeline were carried out during 2015-16 by international engineering (Intecsea/C&M consortium) and consultancy (IHS CERA) companies, which concluded that the pipeline was both technically feasible and economically viable, at an expected capital cost on the order of US$7.4 billion. The studies also confirmed that the pipeline would be complementary to other gas export options from the region.  More recent EastMed pipeline development activities have focused on carrying out marine surveys along the route, in order to improve routing accuracy and to finalize tender packages. FEED tender notices for the offshore pipeline and for compressor/metering stations were issued in June, 2018.

Delivery of East Mediterranean gas supplies to Europe will fully support the European Union's (EU's) goals for gas security of supply, by diversifying gas sources, import routes and market counterparts. To this end, in 2015, the pipeline was confirmed as a Project of Common Interest (PCI[1]), and is included by the EU Commission in the third PCI list. In addition, direct EU support has also been in evidence, assistance with financing being made from EU funds through the Connecting Europe Facility (CEF) program.

Commitment to realise development of the pipeline is strong, as evidenced by the Joint Declaration signed in 2017 by the Energy Ministers of Italy, Greece, Cyprus and Israel that reaffirmed support for the swift implementation of the pipeline project.  Such commitment has been reiterated throughout 2018 via trilateral meetings in Cyprus and Israel, with the leaders of Cyprus, Israel and Greece continuing to place focus on moving ahead with the pipeline's development.  In parallel, working agreements with European governments interested in buying gas from the East Mediterranean are being targeted for signature by the end of 2018.  

Certainly there is a desire and drive from the EU and the respective governments involved to realise the EastMed pipeline, with all parties being serious about its development.  The prospect of multiple offtake points, the proximity of sizeable gas resources in the Levantine Basin to Europe's southern markets, a potential for European gas imports to rise significantly in the coming years due to declining domestic production, and an EU desire to enhance energy security through supply diversity all suggest the gas export pipeline project is an ideal fit. Within this, Israel's current and future world-class gas resources highlight the country as a key player to underpin the project's eventual success.​


[1] EU PCIs are key cross border infrastructure projects that link the energy systems of EU countries. They are intended to help the EU achieve its energy policy and climate objectives: affordable, secure and sustainable energy for all citizens, and the long-term decarbonisation of the economy in accordance with the Paris Agreement. PCIs may benefit from accelerated planning and permit granting, a single national authority for obtaining permits, improved regulatory conditions, lower administrative costs due to streamlined environmental assessment processes, increased public participation via consultations, and increased visibility to investors. They also have the right to apply for funding from €5.35 B of the EU's €30 B Connecting Europe Facility (CEF). This is a fund provided to boost energy, transport and digital infrastructure between 2014 and 2020, and intended to speed up projects and help attract investors. The third PCI list includes the EastMed pipeline within the EU's Southern Gas Corridor (SGC) priority corridor. 

[1] Source of graphic: IGI Poseidon web site.