Israel to Invest in Market Development

Israel's energy minister Yuval Steinitz will bring the government a NIS100mn ($25.7mn) investment proposal in order to promote competition in the gas market. He says it will support and enable development of small gas reservoirs, such as Tanin and Karish, and thus create a competitive domestic marketplace.

According to the new proposals, NIS100mn will be invested in a gathering and transportation system from a hub 10 km offshore to the shoreline. The system will be shared by small gas producers. However, at least for now, its only potential customer is Energean, the Greek upstream company who bought last year Karish and Tanin from Delek Group. In order to encourage competition, the government would incentivize customers whom will purchase gas from small reservoirs.

"The government NIS100mn investment would incentivize the reservoirs owners [to develop them]," The ministry said in a statement. Energean has to submit its development plan to the ministry by July this year and is expecting to take a  final investment decision by the end of the year.

Energean's areas of activity

(Credit: Energean)

The new plan would also support wider use of natural gas in other sectors in the Israeli economy. NIS10mn would be earmarked for the promotion of natural gas in transportation.

Energean in mid-February brought in partner Kerogen to split the costs of the fields' development. And last week in Greece, it brought in Repsol to operate and jointly develop the onshore blocks at Ioannina and Aitoloakarnania in western Greece.

Ya'acov Zalel