Save for later Print Download Share LinkedIn Twitter A new Israeli coalition government under Prime Minister Naftali Bennett has assumed office just as the country looks set to revise its gas export quota with profound implications for the prospects of East Mediterranean LNG (LNGI Jun.4'21). Karine Elharrar, a lawyer, will now oversee the energy ministry replacing long-term incumbent Yuval Steinitz while the public dialogue process over revising the gas export quota is now pushed back to early July, says an industry source. Israel is considering raising current levels for gas exports from 40% to 52% for producing and discovered fields and removing all export restrictions for future discoveries. Israeli producers currently flow 60% of their gas to the local market while 40% is allocated to exports. Operator US Chevron supplies gas from both its 22 trillion cubic foot Leviathan and the 11 Tcf Tamar gas fields to both Egypt and Jordan. Prospects for future East Med LNG exports increasingly hinge on further monetization of Israel’s 22 Tcf Leviathan field and commercialization of Cypriot gas reserves at the 4.1 Tcf Aphrodite field. Cairo Calling? Despite upstream successes in recent years, Egypt’s overall gas production picture is now more uncertain due to the maturity of its acreage and the complexity of some reservoirs. There will be no further development of the West Delta Deep Marine field, which feeds gas to Royal Dutch Shell’s Idku liquefaction plant. BP has faced increasing issues over water encroachment at its Libra, Giza and Fayoum gas fields, which make up part of the West Nile Delta concession. And Eni is now finding that production from the flagship 30 Tcf Zohr gas field is facing similar challenges of water encroachment, reducing the field's capacity. This means Chevron’s decision to monetize a Phase 2 of Leviathan will be closely watched by Cairo as a source of feed gas to its twin liquefaction plants at Idku and Damietta on the Mediterranean coast. Egypt still harbors ambitions to play a leading role as a hub for East Mediterranean LNG exports. Both Egypt and Israel are negotiating a potential new pipeline link from Leviathan to Idku or Damietta (LNGI Feb.22'21). Floating LNG at Leviathan was also previously touted by former operator Noble Energy before its takeover by Chevron. So, any increase in Israel’s export quota should improve Chevron’s options on further monetization (LNGI Aug.3'20). Yesh Atid Elharrar, a member of the centrist Yesh Atid party whose leader Yair Lapid helped form the new coalition, remains relatively unknown. “It is unclear what positions she takes on energy policy but she appears competent and rational at least,” says the source. Bennett is widely seen as sharing a liberal economic approach to the economy like his predecessor former Prime Minister Benjamin Netanyahu. “The energy ministry estimates it will take another week or two before the interministerial committee publishes a draft report for public comments,” says the source. The committee was due to publish the draft between Jun. 9-16. Tom Pepper, London
