JERUSALEM: Aug 16 Israel’s cabinet on Sunday approved a deal with a U.S.-Israel consortium that would move forward development of the huge Leviathan natural gas field off Israel’s Mediterranean coast.
The controversial deal reached late last week, which Prime Minister Benjamin Netanyahu believes will bring Israel billions of shekels in the coming years from the development of Leviathan and two smaller fields, still needs parliamentary approval.
“I would like us to pass the decision by a large majority, and rightly so,” Netanyahu implored ministers before the cabinet’s 17-1 approval was announced.
“This process will not be stopped. The gas will be extracted from the bottom of the sea and will reach Israeli citizens, Israeli industry and the Israeli economy – for the benefit of the citizens of Israel,” Netanyahu said.
After weeks of talks over the government’s initial proposal in June, the deal will allow Texas-based Noble Energy and Israel’s Delek Group to keep ownership of the largest offshore field, Leviathan. They are required to sell off other assets, including stakes in another large deposit called Tamar.
Netanyahu had been adamant in seeking a deal that would allow Leviathan – one of the world’s largest offshore discoveries of the past decade – to be developed.
Critics of the plan said the government gave into most of the companies’ demands and left Noble and Delek with too much power through their control of most of Israel’s gas reserves.
Israel, which has gone from an energy dependent country to a potential exporter, currently receives its gas for electricity generation from Tamar, which began production in 2013.
Leviathan, with estimated reserves of 22 trillion cubic feet (tcf) or 622 billion cubic metres, is slated to begin production in 2018 or 2019 and expected to supply billions of dollars of gas to Egypt and Jordan in addition to supplying Israel.
One change to the initial plan is that the price of gas in the new agreements will be lower, while the developers will also commit to invest $1.5 billion in developing Leviathan in the next two years.