The Ministry of National Infrastructure, Energy and Water resources 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), building a pipeline for gas export from Israel's offshore fields to Turkey and transporting gas to Egypt's idle liquefied natural gas (LNG) facilities in Damietta and Idku, or for supply to the Egyptian domestic market.
Israel's gas export policy is based on government decision no. 442 from June 23, 2013 stating that out of the total amount of gas found in the offshore gas fields 540 BCM will be secured for the domestic market, while the remaining amount, estimated at about 300 BCM will be available for export to the neighboring countries, Europe and other parts of the world. There are several export agreements that have been signed or being negotiated:
Agreements being negotiated:
Economic analysis conducted for the Ministry by IHS Markit demonstrates the need for gas throughout the Eastern Mediterranean region, driven by growing demand and lack of sufficient local resources. Israel's unique geographic location allows various export options to be developed and the opportunity to access several rapidly growing gas markets such as in Egypt, Turkey, Jordan and Cyprus as well as the large existing market in Europe.
Export Options (updated to May 2017):
1. Egypt Due to strong and steady growth in domestic gas demand, Egypt stopped exporting natural gas through the Arab Gas Pipeline in 2012, and stopped exporting LNG in 2014. The gas supply has eased with the startup of LNG imports, but there has been no restart of Egyptian gas exports and none is currently planned. 2. Jordan The power generation sector dominates gas consumption in Jordan (when gas is available), with the National Electric Power Company of Jordan (NEPCO) the dominant consumer. 3. TurkeyTurkey is a large and well-established gas market which is seeking to diversify its sources of supply. Turkish gas demand is expected to grow from 47 BCM in 2016 to nearly 72 BCM by 2040 (Source: IEA). 4. Europe (Cyprus-Greece-Italy)—via proposed EastMed pipeline (source: IGI Poseidon) Gas demand in Cyprus will come mainly from the power sector. Italy is a large gas market that is part of the liquid European gas market that extends to northwestern Europe.
5. EU 28 – Gas demand by sectorThe European Union is the only potential target market for Israeli gas which can be considered a mature market. The rate of growth in EU gas demand is expected to be very low in the years ahead due to the expansion of renewable generation and continuing improvements in energy efficiency. Despite the lack of strong growth in the EU gas market, its need for natural gas imports will continue to grow because of the steady decline of gas production within the EU itself. This trend for increasing import dependence has prompted the EU to put an increasing priority on ensuring the diversity of its supply sources. Disclaimer:"The IHS reports and information referenced herein (the "IHS Materials") are the copyrighted property of IHS Inc. ("IHS") and represent data, research, opinions or viewpoints published by IHS, and are not representations of fact. IHS conducted this analysis and prepared the IHS Materials utilizing reasonable skill and care in applying methods of analysis consistent with normal industry practice. Forecasts are inherently uncertain because of events or combinations of events that cannot reasonably be foreseen including the actions of government, individuals, third parties and competitors. The IHS Materials speak as of the original publication date thereof (and not as of the date of this document). The information and opinions expressed in the IHS Materials are subject to change without notice and IHS has no duty or responsibility to update the IHS Materials. Moreover, while the IHS Materials reproduced herein are from sources considered reliable, the accuracy and completeness thereof are not warranted, nor are the opinions and analyses which are based upon it. To the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on the IHS Materials or any statement contained therein, or resulting from any omission. NO IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE SHALL APPLY. The IHS Materials are not to be construed as legal or financial advice, are supplied without obligation and on the understanding that any person who acts upon the IHS Materials or otherwise changes his/her position in reliance thereon does so entirely at his/her own risk. The IHS Materials were prepared for the sole benefit of IHS' client for IHS' client's internal business use. No portion of the IHS Materials may be reproduced, reused, or otherwise distributed in any form without the prior written consent of IHS. IHS Materials reproduced or redistributed with IHS' permission must display IHS' legal notices and attributions of authorship. IHS and the IHS globe design are trademarks of IHS. Other trademarks appearing in the IHS Materials are the property of IHS or their respective owners."