Israel’s huge gas discoveries opens ‘gas for peace’ strategy

Some Israeli leaders have suggested the country should adopt a “gas for peace” strategy, offering its energy resources to neighbors at discounted prices to cement peace ties.


TEL AVIV – Israel’s newfound natural gas reserves will boost its regional clout and could help it improve ties with neighboring states in need of new energy sources, Energy Minister Silvan Shalom said.

Tamar natural gas rig.

Tamar natural gas rig. – Photo: Albatross

Once totally dependent on fuel imports, Israel has made the largest gas discoveries in the world over the past decade off its Mediterranean coastline, and is expected to become an exporter by the end of the decade.

“Gas gives you much more power than you had. It is something that is very helpful in the geopolitical arena and helps to narrow the gaps,” Shalom, who also serves as Israel’s minister for regional development, told Reuters in an interview.

“It is a tool we can use in a sensitive and very clever way to enable us to develop relations … and to have better relations with many other countries,” he added when asked if future gas trade could warm up chilly Israeli-Turkish ties.

Encouraged by the United States, the two countries announced in March they were working to improve relations that were thrown into the deep freeze when Israeli commandos boarded a Gaza-bound Turkish ship in 2010, killing nine Turks in the fracas.

The diplomatic detente has raised speculation that a pipeline could one day be built to carry Israeli gas across Turkey and on to eastern Europe, which depends heavily on Russia for gas supplies at present.

Shalom, a former foreign minister and veteran member of Prime Minister Binyamin Netanyahu’s ruling Likud party, declined to discuss the issue. But he revealed that Russian President Vladimir Putin had raised the question of Israel’s gas projects only last week.

“President Putin and Prime Minister Netanyahu talked about it. It was a first discussion they have held, but it is not something we are dealing with these days,” he said, giving no further details.

Russian energy group Gazprom said in February it was in exclusive talks to buy liquefied natural gas from Israel’s Tamar field and has also made clear it wants to buy from the larger, nearby Leviathan field.


Some Israeli leaders have suggested the country should adopt a “gas for peace” strategy, offering its energy resources to neighbors at discounted prices to cement peace ties.

Shalom appeared to dismiss the idea of one day selling gas to Egypt, saying its southern neighbor had more reserves than Israel, but he did not rule out deals with Jordan to the east.

The Israeli government will soon announce how much future production it will allow companies to export, looking to weigh up the needs of the domestic market with the demands of major energy firms that are unwilling to spend huge sums developing deep water fields if they cannot reap instant export reward.

“I believe we need a balanced attitude, something that will keep gas for the next generations to come and to enable more exploring in future for foreign companies,” Shalom said.

An interministerial committee last year suggested that some 53 percent of Israel’s gas resources should be offered to export once a 25-year supply for the domestic market was secured.

Shalom said his ministry was still studying the report and would present its recommendations to the cabinet within “a few weeks, or one month”. Asked if he would endorse the findings, he said: “I have said that anything can be changed by a human being except the bible.”

The Tamar field, which came online in March with an estimated 10 trillion cubic feet (tcf) of gas, can meet Israel’s needs for decades. The nearby Leviathan field, which is expected to begin production in 2016, is estimated to hold 19 tcf.

A US-Israeli group announced earlier this month that it had discovered positive signs of another natural gas field off Israel’s coast that could contain 2 tcf of gas.


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