Israel’s first natural gas customers to be Palestinians

gas processing facility near Ashkelon

Israel’s Leviathan Partners natural gas production consortium has signed its first gas export agreement with a Palestinian power company.

The agreement, signed last Sunday in Jerusalem at the American Colony Hotel, involves the Palestine Power Generation Company (PPGC) which will purchase around 4.75 billion cubic meter of natural gas during a 20 year period.

The gas will  fuel a to be constructed power plant in the West Bank city Jenin that will have a 200-megawatt capacity.

Total estimated cost of the deal is said to be $1.2 billion USD, according to the Jerusalem Post.

The agreement was signed between Palestinian Energy Minister Dr. Omar Kittaneh and  executives from the gas field’s partners: the Delek Group, Noble Energy and Ratio Oil Exploration.

The agreement  is hailed as an “historic moment” for both Israel and the Palestinians, and is expected to have significant affect on the economies of both. The Leviathan gas field, located about 130 kilometers (about 100 miles) west of Haifa, is said to contain about 537 of natural gas.

This gas should begin flowing in 2017.

Israel’s natural gas fields, which includes the nearby Tamar gas field, have been the subject of high interest ever since Israeli tycoon Yitzhak Tshuva and his Delek Energy Company partnered with the American Noble Energy Company back in 2009.

Another significant factor was the continuous sabotage of the Egyptian gas pipeline, from which both Israel and Jordan had been receiving significant amounts of natural gas.

Other countries which have been rumored to receive Israel supplied natural gas include Turkey, and the EU, via pipelines that would run under the Mediterranean Sea.

“We believe that the potential for oil and gas exploration in the economic waters of Israel has not yet been fully realized. Therefore, we intend to continue, together with our partners and with the entire natural gas industry in Israel, with the energy exploration activity,” said Gidon Tadmor, chairman of Delek Drilling and CEO of Avner Oil Exploration, which is also involved in these projects.

It remains to be seen what the long-term outcome will be in this agreement, as the power company in Jenin, as well as the  required gas delivery and storage infrastructure in Palestine has yet to be built. The construction time for the Jenin power plant will be around 30 months, at a cost cost of around $300 million USD.

As for Tshuva, who has the controlling interest in Delek Energy, one of the Leviathan gas field projects major players: “I believe that a strong and stable economy between Israel and the Palestinians will lead to peace and stability in the entire region, with everyone benefiting from the resulting economic prosperity and growth.”

Not all the greens believe so. A tent protest is still up in north Tel Aviv near the Arlozorov train station to protest why the natural assets of the country are being controlled by so few people.

Read more on natural gas:

Will Israel’s Natural Gas Tap Flow to Turkey?
Israel’s Offshore Natural Gas good to Burn for 150 Years – If Handled Wisely
Israel and Cyprus Align on Natural Gas and Renewables

Photo of Natural Gas Facility by Moshe Shai/Flash 90

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One thought on “Israel’s first natural gas customers to be Palestinians”

  1. JTR says:

    Someday, all the oil, coal and natural gas will be used up and gone. Then what? Stop growing the economy and live in peace and balance? Long before that, money-growth-addicted humanity will probably pollute itself to extinction.

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