Gaza Field Development in Israel's Interest, Say Experts in Tel Aviv
There is so much news that there is almost no news coming from the East Med. Instead of shedding light on the region, the rapid developments and the changes of heart further complicate the situation. In general, though, it seems that Israel is growing aware of its own interest in developing the Gaza Marine field. That was the only real novelty emerging from a conference that took place in Tel Aviv on Thursday.
Gas from Gaza could help diversify energy supplies to Israel, help the country enhance its reputation vis-a-vis Arab countries, and eventually increase gas trade in the region, three Israeli expert said.
In this sense, the decision to give its green light to the project is not about Palestinians - or at least not only. Gas from the 1 Tcf Gaza field, which is also relatively convenient for geological and other technical reasons, could come in handy for Israel. Being in relatively shallow waters, it could be a cheap alternative, a perfect bridge between the 10 Tcf Tamar field and the 21/22 Tcf Leviathan field.
First commercial gas delivery from the Tamar field occurred in April 2013, while the development of the Leviathan remains a question mark.
The point here is simple. Companies could wait also till 2025 to develop the major field discovered so far offshore Israel, putting it on hold till better market conditions, and a more suitable environment will make it more attractive from a commercial perspective.
“2017 is not viable. We have to decide when to develop the Leviathan field: 2020, 2022 or 2025” Shaul Zemach, Former Director General of Israel's Ministry of Energy and Water Resources, said.
At the same time, Israeli officials acknowledged the fast changes occurring in the East Mediterranean, explaining that it is highly unlikely that any U-turns over the export quotas will occur any time soon.
“The general framework will not be changed in the near future in terms of policy decisions. In terms of future options, speaking about commercial contracts and commercial conditions, we have more flexibility, but again it is a very sensitive issue. All in all, it is better not to start the entire quota process again” Zemach commented.
He is not the only one to think so.
“I don’t think there will be any change” Amit Mor, CEO of consultancy Eco Energy, agreed.
WAY FORWARD?
“The government and the private sector should set their priorities. They have to understand that they cannot make it all” Zemach said during the conference.
In conclusion, the international aspirations are just a dream, simple fantasy, the experts conceded.
Against this backdrop, it seems clear that Israeli gas will not play any significant role in international markets, and it will target regional markets. For this purpose, the development of the Gaza field will probably be the best way to go forward.
Sergio Matalucci
Sergio Matalucci is an Associate Partner at Natural Gas Europe. Follow him on Twitter: @SergioMatalucci