CERAWeek `17: Israel’s energy minister discusses prospects for Levant basin
HOUSTON – Israel’s Energy Minister, Dr. Yuval Steinitz, outlined the changing regional dynamics, and his country’s emerging role as a natural gas producer and exporter, during a strategic dialogue held Wednesday at the 2017 CERAWeek conference in Houston.
Steinitz said during a breakfast session, that the Levant find was unexpected, because conventional wisdom had suggested that only Arab-held lands in the Middle East contained hydrocarbons. But after development drilling and subsequent evaluation, it appears the offshore natural gas field is “a bigger find than first thought, and contains substantial reserves.”
Levant’s daily production is clearly more than Israel can consume, and Steinitz said that “Israel is working to become an energy exporter and regional gas player, with plans to supply Egypt and Turkey with gas, and eventually pipe product to Italy and western Europe.” Construction of a subsea pipeline to Italy is being discussed with Italian authorities. Steinitz said the pipeline option is a better fit than LNG, because it is less susceptible to sabotage and, in the long run, will be less costly than building docking/unloading stations and supporting LNG transportation vessels.
Once a pipeline infrastructure is established, and the field becomes fully developed in 5-10 years, Steinitz envisions the field competing with North Sea producers for customers in that region.
Governmental role. The Israeli government takes a 20% royalty on the production and intends to use the proceeds to improve public health, while reducing pollution by using less coal for power generation. Israeli officials intend to provide gas to external customers with no pricing constraints, and no government interference in the transfer of hydrocarbon resources.
Investment strategy. Israel believes that fields similar to Levant exist nearby and is seeking outside investment. The offering of licensing rights is open to international competition, and several offshore acreage blocks have been acquired by major companies based in the U.S. and Latin America. The lease terms are for six years initially, with three-year extensions available, if required.
Steinitz also stated that “Israel is a good and safe place to do business, and international companies in the country are happy with their investments.” Israel is a strong global hub with multiple technological start-up companies. Finally, “it is our hope that this development will lead to cooperation and increased understanding within the region."
