Israel's Future as a Gas Exporter May Be Decided Next Week

October 15, 2013

It’s taken almost a year for a decision on how best to develop the Leviathan gas deposit off the coast of Israel but by this time next week an overdue legal finding should determine the future of one of the world’s most strategically located, and politically sensitive gas-fields, Forbes reported on October 14.

The High Court of Israel has been considering a question of who has the right to decide how much gas can be exported; the government, or the Israeli Parliament, the Knesset.

But, even if the government wins and 40% of the country’s gas is made available for export and 60% reserved for domestic consumption other questions have to be answered, such as the method of export, whether by pipeline or by conversion to liquefied natural gas (LNG).

For Israel, as well as the companies involved, there’s a lot riding on next week’s High Court decision which is scheduled to be handed down on October 20.

Israel is confident that its offshore gas-fields will generate windfall profits of as much as $60 billion over the next 20 years.

For the company’s most directly involved, Noble Energy of the U.S. and Delek of Israel, the High Court decision should clear the way for Leviathan development options to be finalized.

For a third possible commercial player in the game, Australia’s Woodside Petroleum, it will time to decide whether to maintain its interest and officially buy into the Leviathan project, if an LNG option is sanctioned.

From a political perspective Leviathan, and a number of other gas-field discovered in the eastern Mediterranean, have the potential to change the direction of economies and Middle East politics.

Copyright: Forbes, 2013