Israel ramps up gas output, looks to supply Europe

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• Israel is on track to double natural gas production
• Energy Ministry hopes to sign framework deal with Europe this summer
• Supply might be exported via liquefaction plants in Egypt

Israel is boosting its offshore natural gas output and aims to reach a supply agreement with Europe in the next few months.

The country is on track to double production to about 40 billion cubic metres in the next few years as it expands current projects and brings new fields online, according to industry officials.

Israel currently supplies its own market and exports to neighbours Egypt and Jordan through a local network of pipelines. Much of the additional gas is earmarked for Europe, as the continent seeks to replace Russian supply.

“The hope is to create a relatively fast working process and already during the summer to reach a framework agreement,” said Lior Schillat, director general of Israel’s Energy Ministry, during a recent visit to the drill ship at Karish, a gas field some 90km off Israel’s coast scheduled to come on line later this year.

Its owner, London-based Energean, recently discovered more deposits nearby.

“At the beginning it will be small amounts and slowly, as production and delivery capacities rise, [the amounts] will increase,” Schillat said.

These agreements are usually reached between governments first and then deals are finalised in the private sector, he said. Realistically this would help Europe no sooner than 2024, Schillat added, but he did not specify which countries or groups could be involved.

Choosing a supply route requires navigating the region’s politics, but one option would be to export to Europe via liquefaction plants in Egypt and then pipe the gas north via pipelines that are in various planning stages.

A floating liquefied natural gas facility also being discussed would allow shipments to Europe directly from Israel.

Other possibilities include the proposed Eastmed pipeline, an ambitious and costly project that would connect the gas fields to mainland Europe, or a shorter pipeline to Turkey.

According to gas consultant Gina Cohen, who presented a report on the options to Israel’s Foreign Ministry and the European parliament, Egypt would provide the quickest route to Europe, a floating facility would offer independence from any transit country, while a direct pipeline would provide the cheapest end-consumer price but take longer to build.

“Israel must act as quickly as possible as the window to sign contracts and become a significant gas supplier to Europe will only be opened for a limited time,” Cohen concluded.

Israel, Cyprus and Greece have already signed an agreement to build an underwater power cable linking their electricity grids and offer back-up power during emergencies.

Europe is looking to halt supply from Russia, provider of about 40 percent of its natural gas, because of the war in Ukraine. Russian deliveries totalled around 155 billion cubic metres in 2021.

Israeli gas would help Europe diversify, along with supply from Qatar and the United States.