Israel signs $15 billion gas deal with Jordan

//Israel signs $15 billion gas deal with Jordan

Israel signs $15 billion gas deal with Jordan

By | 2014-09-04T06:02:49+00:00 September 4th, 2014|Israel|0 Comments

Israel signed a memorandum of understanding with Jordan Wednesday, under which it will supply the Hashemite Kingdom with $15 billion worth of natural gas from its Leviathan energy field over 15 years.

The new deal is the largest collaboration with Jordan to date, and will make Israel its chief supplier, according to the Globes business news website.

The final agreement will be subject to the approval of Energy and Water Minister Silvan Shalom, who is expected to confirm it. According to Globes, the US was involved in the negotiations. US envoy Amos Hochstein was said to attend the signing of the memorandum.
Representatives of the Delek Group Ltd. and Nobel Energy Inc. were in Jordan to sign the agreement.

Shalom hailed the agreement, and referred to it as “a historic act that will strengthen the economic and diplomatic ties between Israel and Jordan.”

“At this time, Israel is becoming an energy superpower, which will supply the energy needs of its neighbors and strengthen its standing as a central source of energy supply in the region, and I welcome it,” he said in a statement.

In February, Israel signed a deal with Jordan to supply $500 million worth of gas to the Hashemite kingdom from the Tamar natural gas field in the Mediterranean.

The Jordanians turned to Israel because their supply of natural gas from Egypt had been halted by repeated terrorist attacks on the gas pipeline from Egypt, a Channel 2 report said.

Israel decided last year to export 40 percent of the country’s offshore gas finds, and has since signed a 20-year, $1.2 billion deal with a Palestinian firm, and in June signed a letter of intent to supply energy to an Egyptian facility as well.

In March 2013, Israel began pumping natural gas from the Tamar deposit — discovered in 2009 and located some 90 kilometers (56 miles) west of Haifa — which holds an estimated 8.5 trillion cubic feet of natural gas.

In addition to Tamar, in 2010 an even larger deposit, Leviathan — which boasts an estimated 16-18 trillion cubic feet of gas — was discovered 130 kilometers (81 miles) west of Haifa. It is expected to become operational in 2016.

The finds are expected to transform Israel from an energy importer to a major world player in the gas market.

The decision on gas exports grew out of conclusions published by the Tzemach Committee headed by former Water and Energy Ministry director general Shaul Tzemach. The committee, formed in late 2011, had called on Israel to keep the first 450 billion cubic meters for domestic use, and allow the export of up to half of any additional amount extracted from the proven reserves.

The latest deal to date comes after Prime Minister Benjamin Netanyahu promised a “new diplomatic horizon,” and improved regional ties, in the aftermath of the recent military campaign in the Gaza Strip.

On Wednesday, the prime minister ordered police to dismantle a newly-erected bridge from the Western Wall to the Temple Mount due to Jordanian pressure, Haaretz reported. A senior official said the construction of the bridge did not receive official governmental approval, and the prime minister was informed of the project through Jordanian diplomats, who lambasted the move.

Yifa Yaakov and Times of Israel staff contributed to this report.