Bank of Israel Governor Supports Government’s Gas Plans, Despite Not Being Perfect

Israeli leaders keep sending message in support of gas projects in the country, with Bank of Israel Governor Karnit Flug backing the government’s plans for economic reasons. 

“The Bank of Israel’s position is that under the circumstances created, the new outline provides a reasonable response to the needs of the economy, particularly for the purpose of speeding up the connection of an additional natural gas pipeline and the promotion of development of the Leviathan and Karish and Tanin reservoirs” Flug said in Jerusalem on Thursday, as reported by a note published on Monday.  

The Governor said that, by the nature of negotiations, the outline does not achieve the ideal result, but it can still positively contribute to the economy of the country. 

“As such, the Bank of Israel supports the main points of the outline and progress toward its implementation” he said. 

He also supported the Government in its attempt to pave the way to export contracts with Egypt and Jordan for both economic and diplomatic reasons. All in all, though, the major target of the Israeli gas should be the domestic market and the creation of a framework that can protect local consumers.  

“It is important that if a delay in development prevents the creation of a more competitive structure than is currently the case in the natural gas market, alternative steps be defined that will advance the connection of the gas reservoirs to the Israeli economy in the most rapidly possible manner, alongside a mechanism that will protect Israeli consumers from monopolistic pricing." 

Earlier this month, Noble Energy wrote that the Israeli government will soon ratify a regulatory framework for natural gas development in the country, adding that the company remains committed to operations in the Eastern Mediterranean.

In June, Tel Aviv revealed an outline agreement that lets US-based Noble Energy and Israel's Delek Group keep ownership of the largest offshore field, Leviathan. They are asked to sell off other assets, including stakes in another large deposit called Tamar.