Thursday, April 04, 2013
The Day The Middle East Changed - Israel Starts Pumping It's Natural Gas
Today definitely marks a major change in the Middle East, as Israel's natural gas from the offshore Tamar field began flowing for the first time into the port of Ashdod. The gas came online months ahead of schedule.
The Tamar field was discovered in 2009 off the coast of Haifa and holds an estimated 8.5 trillion cubic feet of natural gas.And that's just the beginning. The much larger Leviathan field is estimated to hold well over 16 trillion cubic feet of gas ( as well as 600 million plus barrels of oil) and is expected to go online in 2016. Indications are that Leviathan will go online ahead of schedule as well.
And then, there's the substantial shale oil deposits Israel has discovered near Beit Shamesh in a place called the Shfela Basin. It contains an estimated 250 billion barrels of shale oil.
This is a game changer for a number of reasons.
Right now, Russia pretty much has a monopoly on gas sales to Europe, because it controls the pipelines from Central Asia. Part of the EU's hostility towards Israel involves the need to keep both Arab oil producers and Iran mollified, as well as their Russian sponsors.
Being able avoid Russian energy blackmail and buy directly from Israel at cheaper prices (because of the shorter transit difference) might very well change the anti-Israel tune of some EU members.Not to mention avoiding the political volatility of a number of oil producers in the Muslim world.
For that matter, since these new discoveries, Russia's tone towards Israel has warmed considerably. And that's even more true of energy hungry China, whose tone has always been relatively friendly and was only constrained by the need to placate Muslim oil producers. Both Russia's Gazprom and a number of Chinese companies have a role in Israel's energy development.
In fact, as I reported previously, China and Israel have not only had top level conferences on joint security but have particularly warm commercial relations and are engaged in a number of joint development projects...including revamping Israel Red Sea port Eilat to handle major container traffic and building a commercial railway between Eilat and Israel's Mediterranean ports. The railroad is designed to bypass the Suez Canal and cut both the distance and expense for shippers between Asia and the Mediterranean.
As an added bonus, Israel has conducted itself for years as a nation dependent on foreign energy, so conservation and alternatives like solar are well advanced. The new energy wealth will not only change the geopolitical climate but add significantly to Israel's GDP.
A game changer indeed.