Israel will increase gas production: wants to compete for the European market

The main problem will be the choice of the gas supply route from Israel to Europe. Several options are being considered.

Israel will increase gas production on the shelf / photo ua.depositphotos.com
Israel will increase gas production on the shelf / photo ua.depositphotos.com

Israel is ramping up offshore natural gas production and aims to reach an agreement on supplies to Europe in the coming months.

Over the next few years, the country intends to double production to about 40 billion cubic meters, expanding current projects and launching new fields, Reuters reports .

Now Israel provides gas to its own market and exports it through a local pipeline network to neighboring Egypt and Jordan, while most of the additional gas will be destined for Europe.

“We hope to create a relatively fast workflow and reach the Framework Agreement in the summer … At first it will be small volumes, and slowly, as production and delivery volumes increase, (volumes) will increase,” Israeli Energy Minister Lior Shillat said during the recent visit to a drilling ship in Karishi, a gas field 90 km off the coast of Israel, due to come online this year.

Its owner, London-based Energean, recently discovered more deposits nearby.

Such agreements are usually negotiated between governments first, and then the deals are finalized in the private sector, Schillat said. In reality, this will help Europe no earlier than 2024, he said, without specifying which countries would potentially be involved.

Gas supply routes

It is noted that the problem will be the choice of the gas supply route, for the solution of which it is necessary to focus on the policy of the region. One option could be to export to Europe via liquefaction plants in Egypt and then north via pipelines, which are in various stages of planning. Also under discussion is a floating liquefied natural gas (FLNG) plant that will allow supplies to Europe directly from Israel.

Other options include the Eastmed gas pipeline. It is an ambitious and costly project that will connect gas fields to mainland Europe, or a shorter pipeline to Turkey.

Transportation through Egypt is the fastest route to Europe, FLNG will provide independence from any transit country, and a direct pipeline will provide the lowest price for the end user, but it will take longer to build, gas consultant Gina Cohen said in a report presented to the Israeli Foreign Ministry and European Parliament.

“Israel must act as quickly as possible, as the window to sign contracts and become a major gas supplier to Europe is only open for a limited time,” Cohen said.

Recall that the European Union, because of the war between Russia and Ukraine, wants to stop gas supplies from the Russian Federation, which make up about 40% of blue fuel. Russia delivered about 155 billion cubic meters of gas to Europe last year.

(C)UNIAN 2022

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