Netanyahu takes off for Athens natural gas summit

The gas pipeline deal between Israel, Greece and Cyprus is a step toward turning Israel into an energy superpower, Prime Minister Benjamin Netanyahu said on the tarmac en route to Athens on Thursday.

“The gas pipeline that we are now going to promote, which [Energy, Water and Infrastructure] Minister Yuval Steinitz has worked on for many years, will revolutionize Israel’s energy picture,” Netanyahu said.

The deal will also contribute to regional stability, the prime minister added.

Netanyahu, Greek Prime Minister Kyriakos Mitsotakis and Cypriot President Nicos Anastasiades are expected to sign an agreement allowing for the construction of an undersea natural gas pipeline from Israel to Europe.

The ambitious energy project will include the construction of a 1,900 kilometer offshore and onshore pipeline from Israeli economic waters to the western Greek mainland, via Cyprus and Crete.

In Greece, the Eastern Mediterranean supply is expected to connect to the planned Poseidon Pipeline, a major natural gas interconnector co-financed by the European Union, running from the Greek-Turkish border to Italy and linking European markets with diversified energy sources.

Turkey, however, could be an obstacle, in light of the agreement it signed with the Libyan government in Tripoli in November, dividing economic rights to the eastern Mediterranean between them. Greece and Cyprus view the agreement as an illegitimate expansion of authority. The Turkish Navy has already stopped an Israeli research ship near Cyprus, and Ankara has made it clear to Israel that any steps taken in the area should be cleared with Turkey.

The pipeline project has been included in the EU’s list of “Projects of Common Interest,” boosting energy market competition and fostering increased energy security for member states.The pipeline is initially expected to transport annual quantities of about 10 billion cubic meters (bcm) of natural gas from Israeli and Cypriot offshore gas fields by 2025; capacity is subsequently forecast to increase to 20 bcm.

According to a preliminary project-feasibility assessment concluded by international engineering firms in 2016, the construction of the pipeline, including offshore supply to Italy, is estimated to require an investment of 6.2 billion euros ($6.95b.).

In November, Israel Natural Gas Lines (INGL) signed a memorandum of understanding with IGI Poseidon – a Greek-Italian joint venture between DEPA S.A. and Edison S.p.A – to advance the development of the EastMed pipeline, assess the configuration of the project and utilize both existing and planned infrastructure in a coordinated manner.

Potentially lucrative exports of Israeli gas from offshore reservoirs follow deals struck with Jordan and Egypt to supply gas from the Leviathan and Tamar gas fields, worth a total of $25b. over the next 15 years. Jordan’s National Electricity Company (NEPCO) said it had received the first supply of gas from Leviathan field operator Noble Energy on Wednesday.

The largest discovered to date offshore Israel, Leviathan is estimated to contain up to 605 billion bcm of natural gas, equivalent to 65 years of Israeli gas consumption. Israel’s Petroleum Council, the national body tasked with advising the energy minister regarding petroleum rights, approved granting 12 new licenses for gas and oil exploration to two Israeli-British consortia in July 2019.

Seven natural gas fields have been discovered off the coast of Israel to date; a third tender process for exploration is expected to take place in 2021.