Israel's Export Options

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:

  • Jordan - Industrial facilities at the Dead Sea (1.9 BCM from Tamar). Export permit granted in April 2015.
  • Jordan – The National Electric Power Company NEPCO (45 BCM from Leviathan). Export permit granted in February 2017.
  • Egypt – Dolphinus Holdings Ltd. (5 BCM from Tamar). Export permit granted in December 2015.

Agreements being negotiated:

  • 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).

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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.

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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.

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 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. 
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  3.      Turkey

Turkey 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).
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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.
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5.      EU 28 – Gas demand by sector

The 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.
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 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. 

 

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