Israel sets export sights into Europe’s natural gas market

Israel’s energy minister Yuval Steinitz recently kicked off a road show for energy investors at the Cop thorne Tara Hotel in London, speaking to a few dozen oil executives, contractors and analysts about the country’s natural gas prospects.

The country is courting international money as it tries to nurture a fledgling gas industry and evolve into an energy exporter. Israel is offering drilling leases in the Mediterranean waters off its coast for the first time, testing investors’ appetite and its own energy ambitions.

They are also looking to establish at least two export routes to Western Europe.

According to the energy minister, Israeli waters could hold 75 trillion cubic feet of gas. If they find that amount of extractable gas, Israel’s reserves would be in the same level as those of energy powerhouses like Norway and Canada.

Two major finds by Noble Energy and its Israeli partners have proved the existence of substantial resources. One field, Tamar, now supplies the fuel for a sizable portion of Israeli electricity production.

“We are not selling garbage here,” said Nati Birenboim of the Tamuz Group, based in Tel Aviv, which advises investors on Israeli energy projects. “We totally believe, following the last Israeli big discoveries, that the potential is huge.”

While Israel plans to initially export gas to neighboring Jordan, Egypt and Turkey, it is also examining three options to access the Western European market – via existing liquefied natural gas terminals in Egypt, a pipeline running to Turkey or a pipeline to Greece through Cyprus.

“All of them are under serious examination and we already have some dialogue. At the end of the day I want to establish at least two, if not all three options. If we discover new fields those projects will be justified,” Steinitz said.