Israel, Jordan in historic gas deal
04 April 2015
Israel has approved a landmark deal with neighbouring energy-deficient Jordan to export natural gas from its Tamar gas field to two Jordanian companies.
The agreement endorsed by Israeli prime minister Benjamin Netanyahu and energy and water minister Silvan Shalom calls for Israel's Tamar partnership to export up to 2.2 billion cubic metres (bcm) of natural gas to Jordan Bromine Co Ltd and Arab Potash Co. The $500-million deal is expected to be valid for 15 years.
Tamar, located 80km off Israel's northern coastal city of Haifa, was the first large-scale hydrocarbon resource discovered in the Mediterranean Sea. First commercial production from the field began in 2013.
This is the first time Israel has approved a gas export contract that would help strengthen relations with neighbouring countries, reports said.
Commenting on the deal, Shalom said: ''This is a historic agreement for Israel's foreign relations and it opens the doors to additional agreements that are advancing with other nations in the region.''
"The deal is part of Israel's natural gas export strategy, and I am hopeful that it will soon be implemented despite the difficulties of these past few months. This is a first, but very significant, deal that will bolster Israel's international standing as an energy power," the minister said.
''The natural gas agreement comes following the Red Sea-Dead Sea canal project and the water agreements signed recently, all of which are evidence of strong relationship being formed between the two countries,'' he further stated.
About a fortnight ago, Tamar group signed a letter of intent with Egypt's Dolphinus Holdings Ltd to export at least 5 bcm of natural gas valued at around $1.2 billion to energy-starving Egypt for an initial period of 3 years.
Jordan, the Middle East's smallest economy after Bahrain, meets all its energy needs through imports. The country, which has a peace agreement with Israel, is looking for a secured energy source after regular disruptions in its gas supplies from Egypt due to pipeline bombings in Sinai.
Tamar and the adjacent Leviathan gas fields are the biggest natural gas discoveries in the last decade, together holding an estimated 29 trillion cubic feet of gas and is expected to provide Israel with greater energy independence.
US energy major Noble Energy and Israel's Delek Group through its subsidiaries, are the two biggest stake holders in Tamar with 36 per cent and 31.25 per cent interests. Isramco holds 28.75 per cent and Dor Gas owns the remaining 4 per cent.
In Leviathan, Noble Energy has a 39.66 per cent stake, Delek Group 45.34 per cent and Ratio Oil Exploration 15 per cent.
However, competition authorities in Israel consider the ownerships of Noble and Delek in the country's gas resources constituted a cartel and recommended breaking up of the control over the two gas fields. A final resolution on the matter is yet to come.