Israel ramping up gas output, looks to help supply Europe

Israel is boosting offshore natural gas output and aims to reach a supply agreement with Europe in the coming months as the continent looks to replace Russian supply. The country is on track in the next few years to double production to about 40 billion cubic metres (bcm) from about 20 bcm as it expands current projects and brings new fields online, industry officials say.


Reuters | Updated: 16-05-2022 17:48 IST | Created: 16-05-2022 17:41 IST
Israel ramping up gas output, looks to help supply Europe
Representative image Image Credit: Piqsels

Israel is boosting offshore natural gas output and aims to reach a supply agreement with Europe in the coming months as the continent looks to replace the Russian supply.

The country is on track in the next few years to double production to about 40 billion cubic meters (bcm) from about 20 bcm as it expands current projects and brings new fields online, industry officials say. Israel currently supplies its market and through a local network of pipelines exports to neighbors Egypt and Jordan, while much of the additional gas is earmarked for Europe.

"The hope is to create a relatively fast working process and already during the summer to reach a framework agreement," said Lior Schillat, director-general of Israel's Energy Ministry, during a recent visit to the drillship at Karish, a gas field some 90 km off Israel's coast due to come online later this year. Its owner, London-based Energean, recently discovered more deposits nearby.

"At the beginning, it will be small amounts and slowly, as production and delivery capacities rise, (the amounts) will increase," Schiller said. Agreements like this, he said, are usually first reached between governments, and deals are then finalized in the private sector. Realistically this would help Europe no sooner than 2024, he said, without specifying which countries or groups would potentially be involved.

ROUTE Choosing a supply route is a challenge that requires navigating the region's politics, but one option would be to export to Europe via liquefaction plants in Egypt and then pipe it north via pipelines which are in various planning stages.

A floating liquefied natural gas (FLNG) facility also being discussed would allow shipments to Europe directly from Israel. Other possibilities include the proposed Eastmed pipeline, an ambitious and costly project that would connect the gas fields to mainland Europe, or a shorter pipeline to Turkey. {nL8N2971OL}

Egypt is the quickest route to Europe, an FLNG would offer independence from any transit country, while a direct pipeline would provide the cheapest end-consumer price but take longer to build, gas consultant Gina Cohen said in a report presented to both Israel's Foreign Ministry and the European Parliament. "Israel must act as quickly as possible as the window to sign contracts and become a significant gas supplier to Europe will only be opened for a limited time," Cohen said.

Israel, Cyprus, and Greece have already signed an agreement to build an underwater power cable linking their electricity grids and offer backup power during emergencies. Europe due to the war in Ukraine is looking to halt supply from Russia, the provider of about 40% of its natural gas. Russian deliveries last year totaled around 155 bcm.

Israeli gas would help Europe diversify, along with supply from others such as the United States and Qatar.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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