Israel finds vast gas fields — but can it celebrate?

THE DISCOVERY of more giant natural gas fields off Israel’s Mediterranean coast has highlighted both the potential for further offshore energy exploration and the problems underlying Israel’s natural gas industry.

The initial excitement that the Yisramco-Modiin partnership had found potential gas reserves of around 250bcm (billion cubic metres) 60 miles west of Tel Aviv — one of the three largest fields discovered in Israel’s economic waters — was quickly tempered by the details. The Daniel East and Daniel West are actually 10 separate deposits, only two of which, with a combined potential of around 120bcm, may be commercially viable.

The discovery has bolstered the gov- ernment’s claims that further offshore exploration will yield more energy resources. However, plummeting global energy prices and the new national framework for the gas industry makes it more difficult for competitors of the Tshuva-Nobel Energy group — which hold the licenses for the largest proven fields — to access the local market.

Prime Minister Benjamin Netanyahu and Energy Minister Yuval Steinitz argued forcefully that the framework was necessary to ensure “the gas doesn’t stay in the ground”, to spur further exploration and enhance Israel’s energy independence and revenues.

The new discoveries give hope that this can happen, but it will take more large, viable finds and higher prices to ensure that outcome. Israel’s energy fortunes remain in the balance.