BIG GAS FIND FOR ISRAEL

Israeli Gas Find Tips Energy Balance; The discovery of a major natural gas field off the coast of Israel could help make the country an energy exporter
Neal Sandler, January 19, 2009 (BusinessWeek)

"A popular quip in Israel's energy industry has it that when Moses left Egypt, he took a wrong turn on his way to the Promised Land: The Biblical figure should have veered right to Saudi Arabia…Now it appears Moses might have had a better nose for energy than previously thought…just hours after a cease-fire began in the Gaza Strip, Israel announced the discovery of a major natural gas field off its northern Mediterranean coast...The news sent the Tel Aviv stock market sharply higher…

"…The find, located 90 kilometers due west of the port of Haifa, is the first large field discovered in the eastern Mediterranean and is significant even by global standards…The partners in the project—Noble, Delek Drilling, Avner Exploration, Isramco (ISRL), and Dorgas—will have to invest around $1 billion to develop the field, and gas could begin flowing within three to four years…[They] are hoping that Tamar-1 is only the tip of the iceberg…"

There are already challenges over ownership of the field. (click to enlarge)

"…the timing of the gas discovery couldn't have been better for Israel. The country is in the midst of switching its older oil-based power plants to cleaner natural gas, which is far more environmentally friendly. More than a dozen new gas-powered plants are in the works. But in the past year there has been growing concern that Israel would face a supply crunch within a few years…

"A much smaller field off Israel's southern Mediterranean coast…is expected to run dry in 2012. In May, Israel began importing gas from Egypt, but technical problems with the marine pipeline have led to constant disruptions. Making matters worse, there has been growing opposition in Egypt to the sale of gas to Israel at prices agreed to…

"…Unfortunately for the Israeli economy, the financial impact of the gas find won't likely trickle down for at least several years…The discovery is expected to sharply reduce Israel's expensive dependence on imported fuel…But in the short term, Israel's good fortune will do little to counter a deepening recession…"