Published in the Jerusalem Post, 31 October 2023
From October 17-19 the Energy Intelligence Forum held a three-day conference in the heart of London. The agenda –“to debate and shape sustainable solutions to the energy challenges of the 21st century” –added to the 5-star hotel location, attracted nearly 100 energy leaders from around the world.
The forum was addressed on its first day by Russell Hardy, CEO
(chief executive officer) of Vitol, the world's top
independent energy trader. He told the
forum that despite its war with Hamas, Israel is managing to maintain a
steady supply of gas both domestically and to its international customers.
Israel’s Tamar gas field, with estimated reserves of around 315 bcm (billion cubic meters), usually meets around 70% of Israel's energy needs for power generation. Two days after the Hamas attack on Israel, however, Chevron – a major partner in the consortium operating Tamar – was instructed by Israel’s energy ministry to shut down production. Reports indicate that the consortium was given to understand that this would be a temporary measure, and production would be resumed when the security situation stabilized. Tamar is located some 25 kilometers (15.5 miles) off the city of Ashdod along Israel's southern Mediterranean coast. The platform, which can been seen from the northern Gaza Strip on a clear day, is within range of rocket fire from Gaza.
Meanwhile, the energy ministry announced, “the economy’s energy needs will be supplied by alternative fuels…The electricity industry is preparing to use alternative fuels to power its stations.” Hardy informed the forum of the situation. Israel is managing "to backfill from some of the other fields,” he said, “so my understanding is gas is still transferring to their customers and their international customers as well, largely in an intact way.” During his address, perhaps with something of a wink and a nudge, he remarked: “I think they probably have a little bit of spare capacity in the system.”
Three major Israel
fields are currently in production – Tamar, Leviathan and Karish, Between them they have total estimated reserves of a trillion
cubic meters. Leviathan, Israel's largest offshore gas field,
continues to operate normally. Four more
fields have already been discovered, and are awaiting exploitation – Zeus,
Athena, Hermes and Kallan – which taken together amount to an estimated further
108 bcm of natural gas.
Egypt imports Israeli
gas from both the Tamar and Leviathan gas fields, located in the Mediterranean
Sea off the coast of Israel, to help meet its domestic demand and for LNG
exports from its two liquefaction plants.
The International Energy
Agency (IEA) took a ess optimistic view than Israel’s energy ministry. Its gas analyst, Gergely Molnar, speaking in
a webinar on October 10, said that Tamar was a "very important" field
when it came to Israel and the region's gas supply-demand balance.
"Closing the field
temporarily,” he said, “can have impacts both on gas deliveries to the domestic
market in Israel, but also on the country's export capability…When we are
looking at the upstream sector in Egypt, we have already seen that it is
struggling to keep up pace with rapidly rising domestic consumption as well as liquid
natural gas ( LNG) exports. If we take out Israeli pipe gas imports from that
equation, it will harm the ability of Egypt to export LNG over the coming
months."
Reported data showed Egypt
exporting only one LNG cargo in August and none in September due to high summer
domestic gas demand. Egyptian LNG
exports so far this year have reached just less than half the total for the
whole of 2022.
In June 2022, the
European Commission, Israel and Egypt signed a trilateral memorandum of
understanding on the supply of Israeli gas via Egypt's LNG export
infrastructure to the EU.
Because Egypt’s own gas production had been declining for some time, Egypt negotiated a deal with Israel which was ratified on August 23. Israel announced an increase in its natural gas sales to Egypt.
"This step will
increase the state's revenue and strengthen diplomatic ties between Israel and
Egypt," said Katz.
In a separate statement,
the energy ministry said that prime minister Benjamin Netanyahu's government
has authorized Katz to order a state of emergency for Israel's energy sector if
deemed necessary. Such a move, it said, would
allow the government to allocate natural gas to consumers should supply
shortages emerge.
Israel is expected to
roughly double its gas output over the coming years, but Yogev Gardos, Israel's
budget director, in a letter to the director-general of the Energy Ministry,
said that exporting too much "could endanger Israel's energy
security" and lead to higher electricity prices. Katz responded to
the letter in a robust X or Twitter post: "Decisions on the gas sector
take into account broad policy considerations, such as Israel's standing, and
the one who will make the decisions is me - the minister elected by the people.
Not the professional echelon."
He could afford to respond straight from the shoulder, for he already knew that Israel’s fourth offshore bidding round, launched in December 2022, had been an outstanding success. Four groups of companies, amounting to nine companies in all, have bid to explore for additional offshore natural gas fields in Israeli waters. With the forthcoming exploration in the pipeline, Israel’s future, both as regards satisfying its own gas needs and as a remunerative gas exporting nation, seems assured.
Published in the Jerusalem Post, and in the Jerusalem Post online titled: "How can Israel maintaion its gas flow during the war?", 31 October 2023:
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