Israel gas developments are finally moving forward after a slow start earlier this year, with Ministers meeting on Thursday.
Their decision is expected to be welcomed by Israel’s current gas giants, Noble Energy and Delek Group. Government are trying to make the market-place more competitive by capping gas prices. Here are the other proposals that will be put in place:
- Leviathan stakes remain
- Tamar Delek stakes to be sold, Noble stakes to reduce
- Tanin and Karish to be sold
- Fair pricing
- Opportunity is now
What does this mean for Israel’s gas fields?
Leviathan Field = a keeper
- Noble and Delek can keep their stakes of Leviathan
- Development of the Leviathan has to be completed by 2019
- Estimated reserves: 22 Trillion Cubic Feet of Gas (22 TCF) with the majority to be used for export over the next 3 years
- The largest offshore deepwater discovery of the previous decade
Tamar Field = Delek to sell all, Noble to reduce
- Delek to sell all of its 31.25% holdings in the next 6 years
- Noble to reduce its stake from 36% to 25%
- Estimated reserves: 10 Trillion Cubic Feet of Gas (22 TCF) with production for domestic market starting in 2013
Karish and Tanin Fields = sell sell sell (within 18 months)
- Delek and Noble will both have to sell all of their holdings within 18 months
- Estimated reserves: 3 trillion cubic feet of gas combined
Ministers treated Israel’s gas resources as a national security issue in order to move the new natural gas proposals through more quickly.
How does the agreement affect gas pricing?
Prices would also be capped for sales to the local market. This would enable competition.
In addition, the price of gas will not be subject to supervision, but rather a “temporary ceiling” will be set and the inflated Tamar contracts that were signed will not be opened up.
These new proposals will generate competition and allow more companies to enter the market place. The plan will be voted on in July after a public hearing.
Eugene Kendel, Chief of Israel’s Economic Council, called it a ‘win-win’ proposal.
Kendel has been urging the fast development of Israel’s gas fields so there is sufficient supply at ‘fair’ prices and additional investment.
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