Italy seeks Israeli-Italian-Egyptian natural gas development & export union

 

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Exclusive: Representatives of the Italian energy company Eni, that recently discovered gas fields off the Egyptian coast, are expected to meet with Israel’s PM this week on preliminary talks on a tri-national energy accord. 

By Tal Shalev

 

Italy has proposed a joint Italian-Israeli-Egypt cooperation on natural gas, i24news has learned. Representatives of the Italian energy company Eni are expected to arrive in Israel this week and will be meeting with Israeli Prime Minister Benjamin Netanyahu and Energy Minister Yuval Steinitz to discuss ideas for joining forces on gas exports to Europe.

The issue was first discussed by Netanyahu and Italian Prime Minister Matteo Renzi in their August 30 meeting in Florence, which took place hours after Cairo announced the historic discovery of a natural gas field off the coast of Egypt.

The enormous discovery, described as the largest ever natural gas resource found in the Mediterranean Sea, was considered a significant blow to Israel’s own hopes of achieving energy independence by becoming a natural gas export powerhouse. According to a well informed source, Renzi raised the prospect of Israel joining forces with Eni, the Italian energy giant developing Egypt’s gas reserves, and connecting subsea fields in Israel to Egypt’s pipeline network, enabling export to Europe.

Want to know more about the Israeli natural-gas fields? Read: Israel’s Offshore Gas Fields

 

An Israeli official confirmed that Eni representatives will be arriving in Israel this week, though stressed that discussions are only in “very initial stages.”

The field discovered by Eni, Zohr, is considered a game changer in the Mediterranean energy play. The field can hold a potential of 30 trillion cubic feet of gas – thirty percent larger than the Israeli Leviathan field which held the title until today. The discovery came amid a serious Israeli delay in production from its own natural gas fields, Tamar and Leviathan, due to political disputes over price export and profits with the companies developing the fields, Delek Drilling and Noble Energy.

Israel was expecting Egypt to be the key customer for the gas exports, but potential deals came into doubt following the Zohr discovery.

“The discovery of the Egyptian gas field is a painful reminder that while Israel has been asleep at the wheel and delaying final approval of the gas deal and additional exploration, the world is changing before our very eyes with implications for export possibilities,” Steinitz said at the time.

Meanwhile, the Egyptian field discovery has prompted Eni, which is partially owned by the Italian government, to explore the potential of “an east Mediterranean gas hub” which will receive gas from various Middle East countries and send it on to Europe, mainly the southern part of the continent, Italy and Spain. “We can create an Eastern Mediterranean hub that can reduce the development costs for Cyprus and Israel, using the existing Egyptian facilities,” Eni’s chief executive, Claudio Descalzi, said in a September interview with Politico.

In a speech to the European parliament last month Descalzi stressed that his company’s work will provide an outlet for Cyprus’s Aphrodite, also developed by Noble Energy and Delek, and the Tamar field as well. The new geopolitical energy battleground which emerged in recent years has already created enhanced Egyptian-Israeli-Cyprus cooperation, and Eni is hoping to continue that trend.

An Israeli official told i24news that “it is Jerusalem’s dream to place a pipeline that will enable export to Europe, and it makes sense geographically to do it through Italy.” However, he added, “such a cooperation entails a very complicated and detailed agreement with many states and business actors, so this is just a very preliminary discussion.”

 

Tal Shalev is the diplomatic correspondent at i24news.

View original i24news publication at:
http://www.i24news.tv/en/news/international/90257-151025-exclusive-italy-seeking-israeli-egyptian-italian-natural-gas-export-cooperation

 

 

 

 

 

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